Up to 580 million new poor people worldwide. The social bill of Covid-19 may be very heavy to believe the projections of three economists, taken up by the NGO Oxfam in its latest study, "The price of dignity", published Thursday, April 9.
The shutdown of entire economies to counter the pandemic "could lead to a decade back in poverty reduction and, in some cases, a decline of 30 years", warn the authors of this economic model, one of the first to assess the impact of the coronavirus on global poverty.
"No historical equivalent"
This would be an unprecedented situation in recent history, since since the early 1990s, world poverty has been in constant decline. "Even after the 2008 crisis, it was only a question of slowing the decline in the level of poverty," recalls Robin Guittard, responsible for international solidarity and inequality, contacted by France 24. "I do not see any historic equivalent to the threat posed by Covid-19 to the most vulnerable populations. It is the first truly global economic crisis. Indeed, the financial shock of 2007-2008 had, above all, affected the countries industrialized, "said Andy Summer, an economist at King's College London, and one of the authors of the economic projections.
With his colleague from King's College Eduardo Ortiz-Juarez and Chris Hoy, economist at the Australian National University, they selected three scenarios, corresponding to a decrease in household income of 5%, 10% and 20%. "This is a range of possibilities based on the expectations of financial analysts as to the economic consequences of the coronavirus", specifies Andy Summer, who also published the details of this work on the website of the World Research Institute in development economics from the United Nations University.
The number of new poor then depends on the poverty line chosen *. There would thus be "only" 85 million more in the most optimistic estimate, which consists in anticipating a drop in income of 5% and only retaining individuals earning less than $ 1.90 per day. This is hardly compared to the worst-case scenario, which predicts that the contingent of those living on less than $ 3.20 a day would increase by 580 million people if disposable income fell by 20% due to the virus. It would be the equivalent of around 6% to 8% of the world's population who would swell the ranks of the poorest, notes Oxfam.
The reality could be worse
The geographic distribution of these new very poor also varies according to the poverty line chosen. Thus, it is in South Asia and sub-Saharan Africa that the overwhelming majority of individuals would fall into great poverty because of the Covid-19 if we only retain those earning less than $ 3.20 per day. In contrast, eastern Asia is said to have the largest number of people forced to survive on less than $ 5.50 a day. "The economic risk linked to the virus for fragile populations in large Asian economies such as China and India becomes evident when we keep in mind the poverty line of $ 5.50 a day," said Andy Summer.
Even if these figures already make you dizzy, the researcher warns that the reality could be even worse. First, because these projections only concern developed countries at the margins. "Indeed, the poverty line is much higher in the OECD member states," notes the British economist. A Frenchman, for example, officially falls below the poverty line when he earns less than 33 euros gross per day (60% of the median wage). There is therefore a significant number of people who will be pushed into poverty by the standards of the so-called rich countries which escape these forecasts, recognizes the British economist.
In addition, "these projections concern the increase in the number of people living below the poverty line for the current year", specifies Andy Summer. There is nothing to say that the coronavirus is not going to continue to make economic victims beyond, especially in the developing countries. "One of the great uncertainties concerns the moment from which a vaccine will be financially accessible for the poorest countries", underlines this specialist in development economics.
Indeed, even if an effective vaccine was put on the market at the beginning of next year - which is already a very optimistic estimate -, it is likely that the least wealthy nations could not, at first, buy it enough for large-scale vaccination campaigns. What to delay, for these States, a way out of the crisis ... if the international community does not mobilize to make such treatment accessible to all.
States ready to make financial efforts
But these alarmist forecasts are not inevitable. "Our model is based on the premise of a neutral state, that is to say that would do nothing to financially support the most vulnerable," says Andy Summer. Each dollar put on the table to limit the economic impact of the Covid-19 can therefore lower the number of people falling below the poverty line.
And the States seem ready to make financial efforts, as shown by the billions of dollars raised in the United States or in Europe. Only problem: these aids implemented by the rich countries are intended, in priority, for their own population. This is why Oxfam calls for a "universal economic rescue plan" so as not to forget the nations which cannot afford such generosity. Because this is where the risk of seeing poverty explode is most imminent.
"The priority is to get money into the hands of the most vulnerable as quickly as possible, which is why one of the most effective tools would be to erase the interest payments on the debt, which would allow immediately release $ 400 billion for developing countries, "said Robin Guittard of Oxfam France.
The NGO also calls on wealthy states to truly honor their commitment to allocate 0.7% of their GDP to development aid. This is an old claim by all associations fighting against poverty, who criticize the developed states for having never or almost achieved this goal, set in the early 1970s by the OECD.
But do these calls for international financial solidarity have a chance of reaching the hour when the governments of the rich countries are already widening their deficits at record speed to deal with the most urgent at home? For Robin Guittard, they would not really have the choice because "this coronavirus does not know the borders and not helping the poor countries to face, sanitary and economically, this crisis, it is to take the risk that these regions become reservoirs from which a new pandemic could start. "
* The World Bank uses three main poverty lines: $ 1.90 a day, $ 3.20 a day and $ 5.50 a day.
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