October 7, 2020: Foreword - Poverty and Shared Prosperity 2020

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As countries work to address these converging shocks, the World Bank Group’s new report, Poverty and Shared Prosperity 2020: Reversals of Fortune, presents new data, original economic simulations and forecasts, and analysis that provide insight into the roots of the current reversal of economic fortune, what it means for the world’s poorest, how countries are taking action to address this crisis, and how to put poverty reduction and development back on track.

The human cost of COVID-19 is immense, with hundreds of millions of people in the developing world reversing back into poverty.  The report’s projections suggest that, in 2020, between 88 million and 115 million people could fall back into extreme poverty as a result of the pandemic, with an additional increase of between 23 million and 35 million in 2021, potentially bringing the total number of new people living in extreme poverty to between 110 million and 150 million. Early evidence also suggests that the crisis is poised to increase inequality in much of the world. The crisis risks large human capital losses among people who are already disadvantaged, making it harder for countries to return to inclusive growth even after acute shocks recede.

“Every nation must look to achieve a strong recovery and come out better prepared for future threats, and the World Bank Group is prepared to help.”

Our Poverty and Shared Prosperity 2020 report jointly analyzes three converging forces that are driving this increase in global poverty and that threaten to extend its effects far into the future: COVID-19, armed conflict, and climate change. Climate change may drive about 100 million additional people into poverty by 2030, many of whom reside in countries affected by institutional fragility and armed conflict, and where global extreme poverty is increasingly concentrated. Facing these multiple shocks, nations will need to work on many fronts to save lives and livelihoods, provide for their most vulnerable citizens, and restart inclusive growth.

This report provides new evidence on emerging “hot spots,” where multiple threats to poor people’s lives and livelihoods converge. Many of these hot spots are in Sub-Saharan Africa, a region now expected to be home to about a third of the people who are newly impoverished by COVID-19. The World Bank Group has stepped up its support for regions in which extreme poverty is increasingly concentrated, armed conflict is disproportionately prevalent, and large populations face severe risks linked to climate change, from flooding to locust swarms. We are working on a multitude of urgent issues, including food support, digital connectivity, and equitable access to COVID-19 diagnostics, therapeutics, and vaccines.

“We must communicate clearly and work together to undo COVID-19’s reversal of fortune and build a better world after this crisis has passed.” 

As we look beyond immediate responses to the pandemic, policy makers should remain attentive to broader development challenges.  Even before the pandemic, development for many people in the world’s poorest countries was too slow to raise their incomes, enhance living standards, or narrow inequality. During the recovery period, nations must look to reengage with a longer-term development agenda that includes promoting sustainable and inclusive growth, investing in human capital, and improving the quality of public administration and services while upholding political legitimacy, and ensuring that debt levels remain both manageable and transparent.

Well-tailored strategies can incorporate approaches that countries have advanced successfully in recent years, while drawing on the research and insights that the development community has accumulated over time. Every nation must look to achieve a strong recovery and come out better prepared for future threats, and the World Bank Group is prepared to help. 

I am encouraged by countries that are already taking bold action, learning fast, and sharing their experiences and results for the benefit of others. We must communicate clearly and work together to undo COVID-19’s reversal of fortune and build a better world after this crisis has passed. 

Originally published on LinkedIn

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