-20% World GDP in Second Quarter Forces 500 Million Back into Extreme Poverty

The number of people living in poverty in the world could increase, in comparison to the status quo in 2018, by between 85–135 million under a 5 percent contraction, by between 180–280 million under a 10 percent contraction, and, startlingly, between 420–580 million people under a per capita income or consumption contraction of 20 percent.

This is from a UN Working Paper – “Estimates of the impact of COVID-19 on global poverty”.

A decade of progress against poverty could be wiped out.

The poverty will mainly be in South Saharan Africa and South Asia.

The COVID-19 pandemic is bad. However, there will likely be a lot more deaths from infant and maternal mortality, undernutrition and malnourishment, and educational achievement from a massive increase in global poverty. The severity of the effects will depend on how long the pandemic lasts, and on how the national governments and the international community reacts.

20 thoughts on “-20% World GDP in Second Quarter Forces 500 Million Back into Extreme Poverty”

  1. If people don’t feel it’s something that could happen to them, no, it isn’t.

    Alas, things that happened outside the period since you were born are ancient history for most people, and probably not even part of their mental landscape.

    Reply
  2. In the US, nationwide prohibition of alcohol started started in 1920 and ended in 1933. However, there were anti-alcohol movements as early as the time when the US was still under the Articles of Confederation, though the movements were not very strong until after 1870 or so. History seems not to be such a good teacher after all, does it?

    Reply
  3. According to the study I linked, it’d be 1.5 billion forced back into deep poverty by a 20% GDP reduction – 400M under $1.90/day, the rest in more developed nations where the absolute poverty bar is set higher.

    However, -20% global GDP seems unlikely, given economies now re-opening and unlikely to shut down again. The most reasonable current estimate is -5%, for which the study’s model indicated about 336M pushed back into deep poverty globally.

    Also, it should be noted that these projections are model based, and as far as I can understand, seem to assume equal impact across all levels of wealth. It also seems possible the very poorest might not be hit proportionally as hard, financially.

    E.g. a subsistence farmer who just barely feeds his own family but also sells part of his crop to buy a few essential things may not be much affected – less income if he has to sell his crop for less, but possibly lower prices for the things he needs to buy. Compare that to a well-above-poverty-level factory worker who is laid off for 2-3 months, who will fully feel that financial loss even if it is higher than the GDP loss might indicate. So a simple GDP-loss-proportional projection may not represent reality.

    Reply
  4. Are you blaming the poverty of people living in SubSaharan Africa on them spending too much time complaining about Fox news?

    Reply
  5. The attempts to ban large serve softdrinks and the multiple bans on types of alcoholic drinks didn’t teach you that already?

    Starting in what, the 1930s?

    Reply
  6. Poverty is 75% individual fault and 25% circumstance. Don’t want to be poor: stop having kids, prostrating yourself to the tribe, and following the flock. Individualism, self-reliance, and counter-culturalism is the start – many rich countries call it Entrepreneurialism, but it is simply self-reliance, opportunism, and resilience. Move away from your family. Ditch your job. Blow-off your victim-group and sulk-gang. Stop blaming politics, pandemics, police, Trump, and Fox news. I am not promoting Libertarianism as that is a worse crime than Socialism – just think for yourself.

    Reply
  7. On that, I agree.

    We could have managed this with mass face mask usage and more hygiene, as several countries showed.

    But most nations shut down their economy due to an influenza that almost everyone will get anyway.

    Reply
  8. Philippines is run by total morons. Still in oppressive lock-down, with on the order of 1000 deaths attributed to COVID19. There are 100E6 people in the country.

    Reply
  9. This is typically what happens when parties with only one perspective are allowed to make decisions.

    “I’ll protect you from the virus by shutting down the world!” Never mind the fact that far more will die from the economic shutdown.

    In other areas of the economy, we have seen the same thing for many decades. You can’t get a new gas hookup for a house in NY because the geniuses are protecting the climate, so people stick with burning oil for heat.

    Many places, we can’t build new power transmission lines because they might impact birds or tortoises or something, so old generators with their high emissions stay online and ruin local air quality.

    The world is a complicated place. Decisions made because of political or environmentalist pressure are often shortsighted and harmful.

    Reply
  10. Those are details. The important thing is we saved the people rotting in care homes. Now they can keep on rotting. We don’t do anything meaningful to tackle aging anyway.

    Reply
  11. The world has just redefined the meaning of over reaction. We have come to expect that we have the right to live in a world free of disasters and we have made things worse. Never let public health official run the world, not even for a minute, they don’t have a clue how it operates.

    Reply
  12. Sad. Didn’t need to happen though. I guess all those warnings from the GOP about the evil government were probably right all along.

    Reply
  13. and how many millions will die from starvation? Will there be daily panic porn on TV showing the number dead from starvation?

    Reply

Leave a Comment