COVID-19 has turned all economies upside down leaving the most vulnerable people in the lurch. Coronavirus pandemic is fast amplifying poverty in the developed and the developing countries alike. All hell has broken loose in particular for the families which were already living in poverty prior to the outbreak. No one is off the hook at this juncture. A big recession is likely to creep into even some major economies let alone the poor nations. Poverty tsunami as being termed is imminent in impoverished countries which might last for a couple of years to say the least. The recent dramatic expansion of social safety nets in myriads of developing countries is just a drop in the ocean to tackle the massive poverty. There are estimates that half a billion more people globally could be pushed into poverty. The coronavirus pandemic could result in spike in poverty hiking it to around 8% of the global population which would require massive funding for the next couple of years to tackle.
Some analysts believe around 50 million people would be pushed into extreme poverty across the globe. The worst hit could be Sub-Saharan Africa, South Asia, North Africa, Latin America, East Asia and the Pacific. Pakistan cannot escape from this conundrum and has to cope with the whopping poverty in the wake of the shut-down of the economy, closure of the factories and markets, massive job losses, stagnant exports, cancellation of orders by the foreign buyers etc. The decision taken by the premier of Pakistan on last Thursday regarding the opening up of the economic activities phase wise is a step to tackle poverty though the risk of the spread of the virus is still imminent.
It is vital to see what the World Bank, International Monetary Fund and G20 are going to do in these trying times for the entire world in general and the developing countries in particular. There are news about the ‘Economic Rescue Package for All’ to let the poor, developing countries to be precise, sustain in these unprecedented times. It is worth-mentioning that the cancellation of US$1 trillion worth of developing country debt payments in 2020 has staved off plenty of snags. A whopper $2.5 trillion is deemed mandatory to support the developing countries at the moment. This enormous amount of wherewithal could help the developing world get back to normal, however, the scars would remain for a few years.
Pakistan needs to present its snags prudently to the world bodies to ensure ample funding which is sine qua non for the sagging economy. It is widely believed that around 35% of the total population of 210 million lives below the poverty line. It is worth mentioning here that there are three international poverty lines of living on less than $1.90, $3.20 or $5.50 a day. Out of seven and a half billion global population, 3.4 billion people were living on less than $5.50 a day in 2018. Abysmal economic growth rate in Pakistan during the preceding year and the negative growth by the end of this fiscal could ask for prompt actions. By virtue of negative or flat economic growth, increase in per capita income is very much unlikely.
The poorest of the poor need sustenance. It is true that Pakistan is not alone facing these snags, however, the timely measures to tackle the glitches could come in handy. Millions are working in the informal sector with no access to sick pay, let alone financial assistance during trials and tribulations. Double-digit food inflation is the prime reason for numerous ills which must be addressed sooner rather than later.
Some time back, prior to the global outbreak, a renowned economist claimed that eight million people were pushed into poverty during 2018-19 in Pakistan and further 18 million were destined to face abject poverty during 2019-20 in the wake of dismal economic growth and spike in inflationary pressures. On top of all that, the pandemic has exacerbated the fragile economy.
Official poverty statistics are hard to come by. The government must divulge the plausible percentage of poverty and should come up with fulcrum strategy to let the poor emerge from poverty in the not-too-distant future. Pakistan, being an agrarian economy with over 55% of the total population with agrarian lifestyle, must not face double digit urban and rural food inflation. There must be some chasm which needs to be plugged for long term economic sustainability.
Some countries in the world have pretty successfully decelerated if not entirely eliminated the level of poverty by opening up economy, developing education sector and promoting tourism. The most emergent issue in Pakistan at the moment is to think of the social safety net so that people do not die of hunger. Further, the inhabitants with low and flat incomes during these trying times must be identified with plausible data and financial help must be extended using the most effective measures.