A report of the World Bank warns that due to Coronavirus Pandemic about 60 per cent population is at the verge of extreme poverty. World Bank defines extreme poverty as living on less than $1.90 (INR 143) per person per day. Ever since the COVID-19 hit the world, the economy of various countries is getting worse. Millions of people have lost their jobs as businesses across the world are shut. According to the World Bank, this year global economic growth might shrink as much as 5 per cent. The President of the World Bank David Malpass says “Millions of livelihoods have been destroyed and healthcare systems are under strain worldwide. Our estimate is that up to 60 million people will be pushed into extreme poverty – that erases all the progress made in poverty alleviation in the past three years”. World Bank provides generous loans to poor countries and also assist them in various poverty alleviation programmes, but this economic shock could push the world many years back. The world may not achieve the target of Sustainable Development Goals by 2030.
Mr. Malpass says that the world bank is offering 160 billion US dollars grants and low-interest rate loans to poor countries. Also, the Bank has already provided emergency finance to 100 poor and vulnerable countries which are home of 70 percent population of the world, but this is not sufficient to overcome this disastrous situation. The need of the hour is that private players also must step in to provide cheap credit, Mr. Malpass says “I have been somewhat frustrated by the slow pace. Commercial creditors are still, by and large, taking payments from even the poorest countries and there needs to be faster movement.”
African and South Asian countries will be the most affected, about 10 million people may become destitute due to this crisis. Migrant workers across the globe have been losing their jobs as the pandemic stops work in various industries. As a result, the World Bank estimates that global remittances, or money sent home to families, may fall down by 20%, or about $100 billion, this year.
The World Bank and IMF( International Monetary Fund) are together formulating a plan in which poor countries can ask for debt relief on repayment of loans which they owed to G20 countries.