The coronavirus pandemic is likely to have profound implications for the global economy, with economists speculating as to the size of the recession rather than the presence of one.  As with most recessions, the pain is unlikely to be felt equally across society, and new research from the United Nations University highlights how the poorest people are likely to be disproportionately affected.

The research suggests the financial fallout from the pandemic could send up to half a billion people into poverty around the world, reversing a decade of global progress on poverty reduction.

“Extreme poverty in Australia’s immediate region is likely to skyrocket,” the authors say.  “In other regions such as the Middle East and North Africa and Sub-Saharan Africa, the adverse impacts of COVID-19 could result in poverty levels similar to those recorded 30 years ago.”

Unequal impact

The authors believe that the economic costs of the pandemic will outweigh the health costs, with tens of millions likely to be thrown back into extreme poverty.

“There is little that anyone can do to stop the world going into a recession, but this report shows just how severe the crisis could be if urgent action is not taken by policy makers,” they explain.

They believe that 2020 will see an increase of up to 600 million people in poverty around the world, due to a contraction of per capita consumption in developing nations of around 20%.

The setback represents a significant blow to the ability of the world to meet the UN Sustainable Development Goal of ending poverty by 2030.

“Our findings point towards the importance of a dramatic expansion of social safety nets in developing countries as soon as possible and—more broadly—much greater attention to the impact of COVID in developing countries and what the international community can do to help,” the authors conclude.