DEVELOPING nations struggling from the economic impact of the coronavirus pandemic have been promised by the World Bank Group that they will be offered assistance to enable them resume growth and respond to the devastation it has caused.
With most developing nations heavily dependent on the export of primary commodities, their economies have been severely hit by the collapse in global production. This reduction in the purchase of raw materials has led to a shortage of capital and appreciating the problems this is creating, the World Bank has offered to step in.
David Malpass, the World Bank president said it would assist the countries as they work toward a sustainable and inclusive recovery. He, however, said the pandemic and global recession might cause over 1.4% of the world’s population to fall into extreme poverty.
Mr Malpass, added: “In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-Covid by allowing capital, labour, skills and innovation to move into new businesses and sectors. World Bank Group support will help developing countries resume growth and respond to the health, social and economic impacts of Covid-19 as they work toward a sustainable and inclusive recovery.”
He predicted that global extreme poverty was expected to rise in 2020 for the first time in over 20 years due to the disruption of the pandemic. According to the World Bank, the pandemic was estimated to force an additional 88m to 115m people into extreme poverty this year, with the total rising to as many as 150m by 2021.
In addition, the bank’s biennial report indicates that extreme poverty is likely to affect between 9.1% and 9.4% of the world’s population in 2020. The World Bank’s Poverty and Shared Prosperity Report defines extreme poverty as living on less than $1.9 a day.
Furthermore, the report also indicates that many of the new poor will be in countries that already have high poverty rates. It also stated that a number of middle-income countries would see significant numbers of people slip below the extreme poverty line.