The United Nations Conference on Trade and Development (UNCTAD) has said that more than 32 million persons will live in extreme poverty due to the negative impacts of Coronavirus (COVID-19) by the end of 2020.
In a report released yesterday, the UN agency said COVID-19 has had a catastrophic economic impact on the least developed countries (LDCs) where the poor has been most affected by the global pandemic. According to the report, the pandemic has had a devastating impact on most of the world’s 47 LDCs whose economies have slumped to the lowest level in 30 years. Economists warn that the current situation will not improve unless the world’s poorest countries significantly boost their productive capacities. Average income in at least 43 of the 47 LDCs is likely to fall, pushing millions of people into extreme poverty. UNCTAD said that between October 2019 and October 2020, the economic growth forecast for LDCs was revised sharply downwards from 5 to -0.4 per cent.
“This revision is expected to lead to a 2.6 per cent reduction in per capita income in LDCs in 2020, with 43 out of 47 LDCs experiencing a fall in their average income levels. “This is the worst economic outcome in 30 years for this group of countries, and represents a significant reversal of the economic and social progress achieved in recent years, including in terms of poverty and social outcomes,” the report read.
“The pandemic is also expected to have a dramatic negative impact on global poverty and food insecurity. The average poverty headcount ratio in LDCs with a poverty line of $1.90 per day is expected to increase by 3 percentage points – from 32.2 to 35.2 percent. “This is equivalent to a rise of over 32 million people living in extreme poverty in the LDCs, and is expected to have the deepest impact on African and Island LDCs,” the report said. UNCTAD noted that LDCs were able to cope with the health aspects of the pandemic better than initially predicted due to factors such as previous experience with epidemics, measures adopted to counter the pandemic, favourable demographics and low population density.
In spite of the gloomy picture, the report said that eight LDCs namely, Bangladesh, Cambodia, Ethiopia, Laos, Myanmar, Nepal and Rwanda have modernized and transformed their productive capacities into better performing economies.