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In addition to the health crisis with millions of patients and hundreds of thousands of deaths, the covid-19 pandemic has wreaked havoc on the global economy.
According to World Bank estimates, this negative impact is expected to drive extreme poverty for the first time in more than two decades.
In 2020 alone, an estimated 115 million people are being pushed into this situation, a number that could grow to 150 million in 2021.
According to the criteria of the World Bank, extreme poverty is characterized by a daily income of up to US $ 1.9 (approximately R $ 10).
This will be the first increase since 1998, when the Asian financial crisis shook the world economy.
With the increase, extreme poverty will affect the equivalent of between 9.1% and 9.4% of the world’s population this year, according to the Shared Poverty and Prosperity Report, in free translation), published every two years. Before the pandemic, the estimate was that poverty would drop to 7.9% by 2020.
Brazil has already experienced an increase in extreme poverty in the last five years. According to data from Pnad Continua, released by the Brazilian Institute of Geography and Statistics (IBGE), in 2019 13.88 million Brazilians lived in this condition, about 170,000 more than the previous year.
In 2020, however, the trend stopped thanks to the payment of emergency aid, which has cushioned the effect of the crisis, especially among low-income families.
A study by the Fundação Getulio Vargas (FGV) based on data from Pnad Covid-19 estimates that, between May and August, the proportion of the population below the poverty line fell from 4.18% to 2.29% .
Since April, the government has disbursed almost R $ 200 billion with the aid, which was recently reduced from R $ 600 to R $ 300.
The improvement, however, tends to be circumstantial. With the decrease in the value of the benefit, the poverty indicators can worsen again, warns the author of the estimates.
Brazil has already experienced an increase in extreme poverty in the last 5 years. – Photo: Getty Images via BBC
The World Bank had set itself, in 2013, the goal of reducing extreme poverty to a maximum level of 3% of the world’s population by 2030.
Now, the organization says the goal is unattainable without “rapid implementation of meaningful and substantial policies.”
The report indicates that poverty is expected to increase this and next year in countries that already have a high level of poverty; 82% of the estimated total would be in countries classified as middle income.
However, prior to the pandemic, the pace of global poverty reduction had slowed.
Between 2015 and 2017, 52 million people came out of this condition. In percentage terms, the reduction was less than half a percentage point each year, half of that observed between 1990 and 2015, when poverty fell by around one percentage point per year.
“The pandemic and the global recession could cause more than 1.4% of the planet’s population to fall into extreme poverty,” said World Bank President David Malpass.
He also said that, to reverse this “serious setback”, countries would need to move towards building a different economy in the post-pandemic, allowing capital, labor and innovation to irrigate new areas and sectors.
Malpass said, however, that developing countries will continue to have access to financial assistance from the bank, “while working towards a sustainable and inclusive recovery.”
The Washington-based institution has already provided around $ 160 billion in low-interest loans to more than 100 countries that have seen their economies affected by the pandemic.
At the other extreme, billionaires around the world have seen their fortunes grow during the pandemic.
Only between April and July of this year, according to an October report by the Swiss bank UBS, the increase was 27.5%, to 10.2 trillion dollars, a record figure. According to the study, the ultra-rich especially benefited from investing in the low stock market between March and April, when the world was quarantined, and then benefited from the recovery in the share price.
Emergency aid prevented 23.5 million Brazilians from falling below the poverty line
“Billionaires did extremely well during the COVID-19 crisis – they didn’t just benefit from the resumption,” said UBS’s Josef Stadler.
The number of billionaires has also reached a new record: 2,189, up from 2,158 in 2017.
Executives in the areas of technology, health and industry are among those who registered the highest increase in income in the period.
