From 1990 until 2019, the number of extremely poor people fell from 36% of the world's population to 8%. Now that number is rising fast
has been eating one meal a day since the end of March, when the lockdown began. She used to work in a hotel, but it had to close, along with most businesses in Uganda. She thinks “it will take time” before the work comes back. In five months she is expecting a baby; it may arrive before a job does.
The newly impoverished cannot easily get help from friends or relatives because, no matter where in the world they are, they are all experiencing a simultaneous and massive economic shock. The World Bank predicts that remittances from migrant workers will drop by 20% this year. Male Nepali migrants who are still overseas are now sending back only a quarter of what they were in January. Many send back nothing at all, having returned home.
Many poor countries have copied the kind of lockdowns that have been imposed in rich countries. But the circumstances are utterly different. The well-off are much more likely to have jobs that can be done from home. And workers in rich countries who cannot do their jobs, such as hotel receptionists or waiters, are typically wellsupported by taxpayers.
“Almost overnight people go from having income to having no income,” says Carolina Sánchez-Páramo of the World Bank. Less income often means less food. The World Food Programme predicts a doubling of acute hunger by the end of 2020. David Beasely, its boss, worries that the world could see “multiple famines of biblical proportions” within a few months.
The lockdown would also leave Malawi $12bn worse off, by stopping people from working and interrupting children’s education, thus dooming them to earn less in the future. That is equivalent to nearly two years’—an astounding sum. Overall, they estimated that the costs of the lockdown outweighed the benefits by 25 to 1.
The most concentrated suffering will be in big cities such as Kolkata and Kinshasa, says Ms Sánchez-Páramo. Even before the pandemic about 130m city-dwellers were extremely poor. Many kept their heads above the poverty line by pedalling rickshaws or hawking vegetables. Lockdowns have stopped that. In India 84% of poor urban self-employed have lost their work.
Assets such as land, livestock and motorbike taxis can be sold only once. When so many people try to sell them at the same time, prices collapse. And people who sell their productive assets today will have no source of income tomorrow.
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