"Before the COVID-19 pandemic struck, I was optimistic about the trends in global poverty: extreme poverty rates had been steadily declining for more than two decades.
However, COVID-19 has hit poor and vulnerable countries the hardest, threatening decades of hard-won gains while exacerbating existing inequalities in the poorest countries served by the World Bank’s International Development Association (IDA). That’s why as the pandemic spread, IDA redoubled efforts by providing a significant and speedy upsurge in financing for the 74 IDA countries, and frontloading almost half of IDA19’s $82 billion resources " - wrote World Bank's Vice President of Development Finance (DFi), Akihiko Nishio.
World Bank IDA admits that their efforts in many of these countries are falling short in the face of continuing pressure COVID-19 related economic pressures. By the end of 2021, the IDA countries will need $67 Billion in additional support compared to the last five years.
Pressing considerations that are rapidly emerging in the path to the recovery and need immediate attention:
1. There will be millions more poor people in need of help. The chart below shows the pandemic induced projections of extreme poverty globally.
2. There is an unfolding food crisis that needs our immediate attention. The World Food Program (WFP) estimates that due to COVID-19 an additional 96 million people will be acutely food insecure added to the current 137 million, this brings the total to 233 million by end CY2020.
3. Countries with high risk of external debt distress are facing a compound challenge. Solutions in action include the Debt Service Suspension Initiative delivering about $5 billion in relief to more than 40 eligible countries—of which, all but one are IDA-eligible.
4. COVID-19 has reduced growth in small states by up to 24 percent. The current crisis is expected to push an estimated additional 17 to 26 million people in fragile and conflict-affected situations into extreme poverty in 2021, if the international community does not act soon.