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After 22 years, global poverty is on the rise again

June 23rd, 2020
topic:Poverty
by:Shuriah Niazi
located in:India
tags:COVID-19, economic crisis, extreme weather, migration, poverty

The economic impact of the Covid-19 pandemic is expected to be massive as the virus has triggered global starvation and nearly 265 million people worldwide may face hunger. 12 million people in India could be pushed back into poverty, according to a new annual study by the Centre for Science and Environment (CSE). According to the report released on June 4 titled ‘State of India’s Environment in Figures 2020’, for the first time in 22 years the global poverty levels will escalate.

CSE Director General Sunita Narain said “the pandemic, along with extreme weather events in the last four years and our skewed and faulty development policies, has severely impacted India's poor."

The report says 19 major extreme weather events claimed 1,357 lives in India in 2019. In the past four years, extreme weather events have remained the topmost economic risk in many countries, including India.

Says Narain: “We will need new futures, new directions for growth. But this can’t happen if our natural resources are threatened and our governance systems and practices are failing. ‘Green’ growth requires the protection and sustainable use of our natural resources. ‘Green’ growth cannot happen if our health is compromised.”

Global pandemic is a hunger pandemic

The next global pandemic may very well be a hunger pandemic and it is feared millions in India could face starvation, according to the United Nations agency World Food Program (WFP).

According to a new report released last month by international management consulting firm Arthur D Little, COVID-19 could cost 136 million jobs in India, increase poverty and reduce per-capita income, which in turn will result in a sharp decline in the Gross Domestic Product (GDP).

The report titled "India: Surmounting the economic challenges posed by COVID-19: A 10-point programme to revive and power India's post-COVID economy" said the joblessness could rise to 35% from the present 7.6% resulting in loss of 136 million jobs and leave as many as 174 million without means of sustenance.

Poverty mitigation will receive a setback, notably changing the fortunes of many, putting 120 million people into poverty and 40 million into abject poverty, the report said.

Migrant workers flee poverty after factories close

Migrant workers in India faced numerous challenges during the pandemic. Millions of them were left without work as factories and workplaces in the cities closed due to the Covid-19 induced nationwide lockdown. On 24 March, India’s Prime Minister Narendra Modi ordered a countrywide lockdown for three weeks, which was extended in different phases till 31 May. With the loss of income, workers had to cope with food shortages and a number of them were rendered homeless as they were evicted by their landlords since they were unable to pay rents.

Thousands of them then started walking or cycling back to their native villages and hometowns, often hundreds of miles away, as public transport stopped during the shutdown. According to media reports, over 300 workers and their family members died due to starvation, exhaustion, road and rail accidents, and denial of timely medical care during the long and hazardous journey. On 1st May, the Indian Railways launched Shramik or worker special trains to ferry the stranded migrant workers and others to their homes. However, reports said as many as 80 of them died while travelling back home on the special trains, in the one month after their launch.

Utter lack of government assistance

Large numbers of migrant workers have returned to states such as Madhya Pradesh, Uttar Pradesh, Rajasthan, Bihar, Jharkhand, Chhattisgarh and Odisha. Providing livelihoods to them is going to be an onerous task for the states although the government has announced that returning workers would be given employment under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), which is a government scheme to provide job to people in rural areas. But the lockdown has also rendered a large number of educated youths, many of them graduates and postgraduates, jobless and they are now ready to do unskilled manual works under MNREGA at the statutory minimum wage.

The lockdown has hit all sectors and while the magnitude of the impact may vary from sector to sector, aviation, tourism and hospitality, financials, retail, realty and automobiles are among the sectors that have been worst hit.

With the loss of employment and lack of proper government assistance, millions of people could be hit hardest by extreme poverty or become victims of starvation.

According to a recent research by the United Nations University (UNU), at least 104 million more people in India would be forced to live below the poverty line as a result of the fallout from coronavirus. The UNU made this assessment based on poverty standards set by the World Bank.

COVID-19 results 400 million workers without income

According to the UNU research, at present there are about 812 million people living below the poverty line in India as per the World Bank's income standards, constituting about 60% of the total population of the country. The Covid-19 epidemic and lockdown has adversely affected the economic condition of the country and this number could increase to 915 million. Thus 68% of the total population would be living below the poverty line. According to the poverty standards set by the World Bank for the poor countries, people earning less than $ 1.9 a day (about Indian Rs 145) in these countries are considered below the poverty line.

According to a recent report on employment in India, released by the International Labor Organization (ILO), India's total workforce is 500 million, 90% of which is from the unorganized sector. The Covid-19 crisis will result in over 400 million workers losing their means of income. The report quoted the Oxford Covid-19 Government Response Stability Index as saying that workers would be mainly affected by measures such as lockdown being adopted to deal with the pandemic. These measures have forced most workers to return to their villages. Unemployment will increase in the unorganised sector, leading to a reduction in per capita income and consumption.

On 30 May, the India’s Ministry of Home Affairs announced that the ongoing lockdown would be further extended till 30 June in zones with high number of active coronavirus cases, with services resuming in a phased manner, starting from 8 June, in other zones. It is termed as "Unlock 1" and is stated to have an economic focus. The government has announced a series of measures to deal with the economic slowdown due to the shutdown. On 12 May, Prime Minister Modi announced an economic package of US$280 billion for self reliant India. Modi said the package was for labourers, farmers, honest tax payers, micro, small and medium enterprises or MSMEs and cottage industries.

Article written by:
Shuriah Niazi
Shuriah Niazi
Author
India
“The pandemic, along with extreme weather events in the last four years and our skewed and faulty development policies, has severely impacted India's poor."
“We will need new futures, new directions for growth. But this can’t happen if our natural resources are threatened and our governance systems and practices are failing."
The next global pandemic may very well be a hunger pandemic.