165 million people fall into poverty in 3 years of crisis: UN
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Reports warn that 75 million people could fall into extreme poverty, defined as living on less than $2.15 per day, between 2020 and the end of 2023.
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In this Saturday, March 21, 2020 photo, Javier Redondo, 40, covers his head with his hands as he waits for alms on an empty street in Barcelona, Spain (AP)
The Covid-19 pandemic, the cost-of-living problem, and the NATO-orchestrated war in Ukraine have pushed 165 million people into poverty since 2020, according to the United Nations, which has called for a moratorium on debt repayments for poor countries.
According to a study published by the United Nations Development Program, 75 million people will have fallen into extreme poverty, defined as living on less than $2.15 per day, between 2020 and the end of 2023, and 90 million more will fall below the poverty line of $3.65 per day. "The poorest suffer the most and their incomes in 2023 are projected to remain below pre-pandemic levels," the report said.
"Countries that could invest in safety nets over the last three years have prevented a significant number of people from falling into poverty," UNDP chief Achim Steiner said in a statement, adding that "In highly indebted countries, there is a correlation between high levels of debt, insufficient social spending, and an alarming increase in poverty rates."
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The report called for a "debt-poverty pause" in economically struggling countries "to redirect debt repayment towards financing social expenditures and countering the effects of macroeconomic shocks," adding that "The solution is not out of reach for the multilateral system."
Another UN report detailed that on Wednesday, around 3.3 billion people, which is nearly half of the worldwide human population, live in nations that spend more on paying debt interest than on education and health. Furthermore, while having lower amounts of debt, emerging countries are paying more interest, owing in part to rising interest rates.
The annual cost of lifting the 165 million newly poor people out of poverty, according to the report, would be over $14 billion, or 0.009% of global output and a little less than 4% of the total public external debt service in 2022 for developing economies.
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On that note, the report's authors calculated that if income losses among the already impoverished prior to the shocks are included, the mitigation cost would be around $107 billion, or 0.065% of global GDP and roughly a fourth of total foreign public debt payments.
"There is a human cost of inaction in not restructuring developing countries' sovereign debt," Steiner said, adding that "We need new mechanisms to anticipate and absorb shocks and make the financial architecture work for the most vulnerable."
Earlier this week, Secretary-General Antonio Guterres, who has advocated for the reform of international financial institutions, criticized "our outdated global financial system, which reflects the colonial power dynamics of the era when it was created."
