According to Oxfam, an independent charity focused on alleviating global poverty, the coronavirus pandemic could push an additional half a billion people into poverty. Oxfam warned that unless urgent action is taken, poor countries would experience severe economic fallout resulting from the COVID-19 outbreak.
Ahead of three key international meetings next week by the finance ministers of the World Bank, the International Monetary Fund (IMF) and Group of Twenty (G20), Oxfam is demanding that world leaders should contain the economic fallout by canceling the 2020 $1 trillion debt owed by of developing countries.
If not done, the impact of shutting down economies to prevent the spread of coronavirus would risk setting back the fight against poverty by a decade globally. But in hardest-pressed countries of sub-Saharan Africa, North Africa, and the Middle East, it will be set back as far as 30 years. “For nearly three billion people living in poverty and without enough clean water, jobs, and access to basic healthcare – and for millions already facing years of malnutrition, disease, and conflict – the coronavirus will be a lethal killer,” Paul O’Brien, Vice president at Oxfam America, told Al Jazeera.
In addition, José Maria Vera, Oxfam’s International Interim Executive Director, said: “the devastating economic fallout of the pandemic is being felt across the globe.” Maria Vera added that “but for poor people in poor countries who are already struggling to survive, there are almost no safety nets to stop them from falling into poverty.”
A published report by Oxfam tagged Dignity, not destitution, stated that by the time the pandemic was over half of the world’s population of 7.8 billion people could be living in poverty. Consequently, the charity is calling on richer nations to agree to an “Economic Rescue Package for All,” that would enable governments of poor countries to provide cash to those who have lost their livelihoods as a result of the COVID-19 pandemic.
The meetings of the G20, the IMF, and the World Bank will discuss plans to offer debt relief to the world’s poorest countries and whether to increase the funds available to the IMF through the creation of Special Drawing Rights (SDRs). Maria Vera explained these international lenders “must cancel all developing country debt payments for 2020 and encourage other creditors to do the same.” Also, they should issue “at least US$1 trillion of SDRs,” which is a form of international currency that can be used to help struggling countries.
The forecast remains extremely grim, with the United Nations estimating that nearly half of all jobs in Africa could be lost. “Many developing countries – particularly oil-exporting countries and tourism-driven countries – are being pushed toward a debt crisis.”Shari Spiegel UN Department of Economic and Social Affairs said.
Therefore, the immediate cash injection suggested by Oxfam will help bail out poor and vulnerable nations across the world and in Africa. Developing countries in Africa can not provide large-scale economic stimulus packages to support businesses and workers unlike their counterparts globally. This is due to a lack of financial firepower.
Nonetheless, through the provision of cash grants to developing African nations and the cancellation of the $1trillion worth of debts by developing countries, the African continent will be able to recuperate lost resources after the COVID-19 pandemic.
