Covid-19 May Have Driven 100 Million People Into Extreme Poverty

By Getrude Matayo

World Bank President Mr. David Malpass said that the coronavirus pandemic may have driven as many as 100 million people into extreme poverty.

“Creditors should reduce debt held by poor countries and says 70 to 100 million people may be pushed into extreme poverty,” Mr. David Malpass said.

The Washington-based development lender previously estimated that 60 million people would fall into extreme poverty due to Covid-19 but the new estimate puts the deterioration at 70 to 100 million. He said that the number could go higher if the pandemic worsens.

According to Malpass, Poor countries had been worse hit by the economic fallout from coronavirus and a growing debt crisis meant it was necessary to go beyond the repayment holidays offered by rich countries earlier this year.

He said the debt vulnerable are high and the imperative of getting light at the end of the tunnel so that new investors can come in is substantial.

As the crisis hit, inequality has become very distinct. The stimulus in advanced countries has been targeted on advanced countries to the extent that a major inequality problem has gotten worse. The recession is even worse in the developing world than they are in advanced economies.

The situation makes it imperative that creditors reduce the amount of debt held by poor countries at risk, going beyond the commitment to suspend debt payments. Malpass said in an interview.

The World Bank president said that debt problems were intensifying because while the gross domestic products of poor countries were going down, the amount they owed was not. Even so, more countries will be obliged to restructure their debts

The advanced economies in the Group of 20 already have committed to suspending debt payments from the poorest nations through the end of the years and there is growing support for extending that moratorium into next year.