How many people will Covid 19, inequality and food price hikes push into poverty? As per an estimate from Oxfam, 263 million more people could be pushed into extreme poverty in 2022, due to the combined impact of COVID-19, inequality, food, and energy price inflation – accelerated by the war in Ukraine
In the latest brief First Crisis then Catastrophe published ahead of the World Bank and IMF Spring Meetings in Washington DC, Oxfam shows that 860 million people could be living in extreme poverty. They would be living on less than 1.90 dollars a day by the end of 2024. Moreover, the number of undernourished people could reach 827 million in 2022.
PROJECTION
The Oxfam brief points out that the World Bank had projected COVID-19 and worsening inequality to add 198 million extreme poor during 2022. This could reverse two decades of progress. Based on research by the World Bank, Oxfam estimates that rising global food prices will push 65 million more people into extreme poverty, for a total of 263 million more extreme poor this year. This is equivalent to the populations of the UK, France. Germany and Spain combined, the Oxfam added.
Meanwhile, Oxfam International executive director Gabriela Bucher said, “Without immediate radical action, we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory. This terrifying prospect is made more sickening by the fact that trillions of dollars have been captured by a tiny group of powerful men who have no interest in interrupting this trajectory.”
FIGHT OF GOVERNMENTS
In the brief, the international organisation points out that a large number of governments is nearing a debt default and are forced to slash public spending to pay creditors and import food and fuel. It said that the poorest countries are due to pay 43 billion dollars in debt repayments in 2022, which could otherwise cover the costs of their food imports. Global food prices hit an all-time high in February, surpassing the peak crisis of 2011. Oil and gas giants are reporting record-breaking profits, with similar trends expected to play out in the food and beverage sector.
The report also shows that countries are being forced deeper into poverty. COVID-19 has stretched all governments’ coffers but the economic challenges facing developing countries are greater, having been denied equitable access to vaccines and now being forced into austerity measures.
FOOD COST
Rising food costs account for 17 percent of consumer spending in wealthy countries but as much as 40 percent in Sub-Saharan Africa. Even within rich economies, inflation is super-changing inequality in the US the poorest 20 percent of families are spending 27 percent of their incomes on food, while the richest 20 percent spend only 7 percent.
WAGES
The report points out that real-term wages of most workers around the world continue to stagnate or even fall. The effects of COVID-19 have widened existing gender inequalities too. Women are struggling to get back to work. In 2021, there were 13 million fewer women in employment compared to 2019, while men’s employment has already recovered to 2019 levels.
NOTION OF NOT HAVING MONEY
In strong words, Bucher rejected the notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare. “We only see the absence of economic imagination and political will to actually do so.” Bucher said.
Oxfam also mentioned that the governments failed to increase taxes on the richest despite an increase in the wealth of the billionaires even at the time of COVID-19.
The organisation also called the G20, World Bank and IMF to immediately cancel debts and increase aid to poorer countries, and together act to protect ordinary people from an avoidable catastrophe. “They must protect people from the crisis’ harsh impacts, expanding cash transfers and controlling food prices, reject austerity, and tax and invest progressively. Rich countries must urgently cancel unpayable debt payments from poor countries: reallocate IMF Special Drawing Rights to lower-income countries; and increase additional aid. The IMF and World Bank must participate in debt relief efforts, increase concessional financing, and the IMF must refrain from promoting austerity,” the paper said.
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