Around half a billion people could be pushed into poverty as a result of the economic fallout from the coronavirus pandemic unless richer countries take "urgent action" to help developing nations, a leading aid organization warned Thursday.
In the run-up to three key international economic meetings next week, Oxfam has urged richer countries to step up their efforts to help the developing world. Failing to do so, it added, could set back the fight against poverty by a decade and by as much as 30 years in some areas, including Africa and the Middle East.
"The devastating economic fallout of the pandemic is being felt across the globe," said Jose Maria Vera, Oxfam International Interim Executive Director. "But for poor people in poor countries who are already struggling to survive there are almost no safety nets to stop them falling into poverty."
The report, which is based on research at King's College London and the Australian National University, warns that between 6% and 8% of the global population could be forced into poverty as governments shut down entire sectors of their economies to manage the spread of the virus. As an example of the repercussions of the lockdowns in many Western countries, the report notes that more than a million Bangladeshi garment workers — 80% of whom are women — have already been laid off or sent home without pay after orders were cancelled or suspended.
Oxfam is calling on world leaders to agree on an economic rescue package to keep poor countries and poor communities afloat. Finance ministers from the Group of 20 leading economies are set to meet next week, as are the International Monetary Fund and the World Bank.
Among the measures Oxfam is recommending is the immediate cancellation of $1 trillion worth of developing countries' debt payments due in 2020. It said cancelling Ghana's external debt payments this year, for example, would enable the government there to give a cash grant of $20 a month to each of the country's 16 million children, disabled and elderly people for a period of six months.
Oxfam is also recommending a $500 million increase in overseas aid and the creation of $1 trillion of special drawing rights at the IMF, a move that effectively increases the liquidity available for developing countries in the crucial months ahead. This, according to the report, would give the Ethiopian government access to an additional $630 million, which would be enough to increase health spending by 45%.