The coronavirus pandemic may cause an increase in East Asia poverty, according to a forecast from the World Bank.
As the pandemic continues to damage the economy, this could be the first time in 20 years that the number of people living in poverty in developing East Asian and Pacific countries could rise.
The definition of poverty line, according to the World Bank, is having income of $5.50 a day. The bank reported that as many as 38 million more people could earn below that income level in 2020. The number includes 33 million who would have escaped poverty if not for the pandemic.
That World Bank forecast about the East Asia poverty was part of an economic update for the region. It covers China, Southeast Asian countries, and the Pacific Islands, such as Fiji and Samoa. The report does now cite India and other South Asian countries.
Scars
The World Bank prediction is just one of the many reports showing the impact of the coronavirus pandemic on economies. In July, the United Nations predicted that 8.8% of the global population will suffer in extreme poverty this year. This is regarded as an increase of 8.2% in 2019. Extreme poverty refers to one's income being below $1.90 a day.
The World Bank noted that the “scars” left behind by the coronavirus crisis may stay longer.
“Sickness, food insecurity, job losses, and school closures could lead to health and learning losses that could last a lifetime. The poor will be disproportionately disempowered because of worse access to hospitals, schools, jobs, and finance,” the report said.
The bank noted that the use of technology as a result of the Covid-19 pandemic could improve access to opportunities and public services.
“For these benefits to arise, these technologies must be broadly available," the bank said.
Poverty forecast
The East Asia poverty forecast comes as the region is believed to be growing by just 0.9% this year.
“COVID-19 has delivered a triple shock to the developing East Asia and Pacific (EAP) region: the pandemic itself, the economic impact of containment measures, and reverberations from the global recession brought on by the crisis,” it said.
Meanwhile, a 2% growth is expected for China this year, and it is one of the only three countries in the grouping that may experience growth this year, the bank said.
However, economic growth in the region is predicted to increase by 7.4% next year, with China positioned to have the largest expansion of 7.9%, according to the report.
“Prospects for the region are brighter in 2021,” said the World Bank. “However, output is projected to remain well below pre-pandemic projections for the next two years.”
Global poverty
According to the new report released by Oxfam in April, the economic hit from the coronavirus pandemic can push half a billion people into poverty.
“The economic crisis that is rapidly unfolding is deeper than the 2008 global financial crisis,” the report stated.
“The estimates show that, regardless of the scenario, global poverty could increase for the first time since 1990,” the report furthered, adding that this could press some countries down to poverty levels last witnessed around three decades ago.
Oxfam’s observations looked into several scenarios, using the World Bank’s various poverty lines – from extreme poverty, which refers to living on $1.90 a day or less, to higher poverty lines of surviving on less than $5.50 a day.
