Between 1.4m and 18.53m jobs have been lost and at least 10m people are feared to have slipped below the poverty line as a consequence of the coronavirus pandemic, raising the number of poor people to 10m in Pakistan. Extreme poverty is expected to increase drastically in the world after it is experiencing the worst global recession since World War II, with a 5.2pc reduction of global GDP.
Pakistan suffered huge economic losses despite tackling the health challenge most successfully as compared to regional and other countries of the world. Over 6,000 deaths in Pakistan are negligible as compared to 75,000 in neighbourng India and 190,000 in the US. However, Pakistan’s economy is set to contract for the first time in 68 years by 0.38pc due to the adverse impact of the virus. Economists project Pakistan’s economy to shrink by $15 billion, with a 10pc decline in gross domestic product in the fourth quarter of financial year 2020-21. According to data released by the government, Covid-19 caused a loss of over Rs3 trillion to the national income.
Fitch Ratings has projected a massive 10.5pc contraction of India’s economy in the current financial year. India recorded one of the sharpest gross domestic product (GDP) contractions in the world in April-June. India’s GDP shrank by a staggering 24pc year-on-year amid the imposition of one of the most stringent global nationwide lockdowns. “GDP should rebound strongly in 3Q20 (October-December) amid a re-opening of the economy, but there are signs that the recovery has been sluggish and uneven,” Fitch said. It had earlier projected India’s GDP to contract 5pc this fiscal.
Over 4.1m youths have already lost jobs due to the pandemic in India, according to a report by the International Labour Organization (ILO) and the Asian Development Bank (ADB). Even before the crisis, youths in Asia and the Pacific faced challenges in the labour market, resulting in high unemployment rates and large shares of youths excluded from both school and work. In 2019, the regional youth unemployment rate was 13.8pc, compared to 3pc for adults; and more than 160 million youths (24pc of the population) were not in employment, education or training. Four in five young workers in the region were engaged in informal employment — a higher share than among adults — and one in four young workers was living in conditions of extreme or moderate poverty. The pre-crisis challenges for youths are now amplified since Covid-19 hit. Without sufficient attention, the risks are creating a “lockdown generation” that could feel the weight of the crisis for many years to come, the report warned. It estimated between 10m and 15m youths may have lost jobs in 13 countries in Asia and the Pacific in 2020.
The pandemic will widen the poverty gap between women and men, pushing 47 million more women and girls into impoverished lives by next year, the United Nations said. Worldwide, more women than men will be made poor by the economic fallout and massive job losses caused by Covid-19, with informal workers worst hit in sub-Saharan Africa and Latin America, according to new UN estimates. During the pandemic, women have lost their jobs at a faster rate than men have, as they are more likely to be employed in the sectors hardest hit by long lockdowns such as retail, restaurants and hotels, it said. Overall, the pandemic will push an additional 96 million people into extreme poverty by next year, of whom nearly half are women and girls, according to estimates by UN Women and the UN Development Programme (UNDP).
The World Bank has warned the world is experiencing the worst global recession since World War II, with a 5.2pc reduction of global GDP due to the pandemic. Because of this, extreme poverty is expected to increase drastically. As developed economies recover from the economic effects of the pandemic, developing countries are struggling to keep their populations from falling into extreme poverty. Most lower and middle-income countries do not have social safety nets that provide reliable healthcare services, unemployment benefits and homeless shelters for those in poverty. Moreover, while most developing countries’ relief comes from foreign aid and non-governmental organizations, more must be done to lessen the consequential impacts of a global recession, it noted.
Extreme poverty is defined as living on less than $1.90 per day, the international poverty line. For comparison, the average American spends $164.55 per day. Extreme poverty rates were on a constant decline in recent years, with an estimated decrease from 614 million living under the global poverty line in 2019 to 595 million in 2020. The pandemic changed the 2020 estimate to a range of 684 million to 712 million and is expected to slightly increase or decrease in 2021, depending on foreign aid efforts and global recovery.
As developed countries have more economic activity, their economies will be impacted more directly than in developing countries. However, since developed countries provide aid to developing countries, developed countries could have a hard time coming up with the necessary funds to support poverty-stricken nations, especially during a global recession. For example, the United Kingdom’s economy shrunk by 20.4pc in April, and in the United States, newly filed unemployment claims totaled 45.7 million since the pandemic began. As the number of citizens in developed countries facing poverty rises dramatically, congressional leaders will likely focus on domestic relief, putting global poverty on the back burner, it observed.
Developing countries’ economies were already incredibly vulnerable due to the high levels of debt that has formulated in the past decades. Now, due to the pandemic, per capita incomes are expected to shrink, which will likely put millions into poverty worldwide. Moreover, without foreign relief, those in poverty may be pushed into extreme poverty. Additionally, citizens in countries that have commodity-based economies, specifically oil-reliant countries, will likely suffer from severe economic consequences. The World Bank estimated in April that 40 to 60 million people could be pushed into extreme poverty due to COVID-19, and updated the number on June 8 to 71 to 100 million people.
The reports suggest the world will have to face the fallout of the pandemic for years and decades and poor countries, like Pakistan, will have to face a huge challenge to save their people from hunger. The situation becomes more serious when developed countries are no more in a position to help developing countries.