Opinion: The long shadow of COVID-19 on extreme poverty

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Migrant workers and their family members board a truck to return to their villages following the announcement of a 21-day nationwide lockdown to limit the spread of COVID-19 in Ahmedabad, India. Photo by: Amit Dave / Reuters

Today, the world faces a greater challenge than any before as the COVID-19 pandemic threatens to undo years of progress in poverty eradication while exacerbating preexisting inequalities and exposing the fragility of our systems.

At the beginning of 2020, an estimated 700 million people lived in extreme poverty. The World Bank now projects 88 million to 115 million more people will be forced into extreme poverty by the year’s end, with that figure potentially reaching up to 150 million by 2021. “The pandemic and global recession may cause over 1.4% of the world’s population to fall into extreme poverty,” World Bank Group President David Malpass said.

In light of the dire situation, governments and international actors have taken action on an unprecedented scale. The World Bank, for instance, is committing $160 billion to financing coronavirus responses globally. Governments have implemented hundreds of new cash transfer programs, and the United Nations Development Programme has proposed a temporary basic income for vulnerable groups in low-income countries. By September, about 200 countries and territories had planned or put in place 1,179 social protection measures in response to COVID-19.

We applaud the exceptional efforts and these emergency responses, which have been essential in mitigating the worst economic shocks of the pandemic. Yet many are short-term and fall short of reaching those most in need.

For those in extreme poverty, the biggest concern is not the virus

COVID-19 is changing the face of extreme poverty

The COVID-19 pandemic is forecast to push more than 100 million people into extreme poverty. New projections from the World Bank paint a clearer picture of who they are and where they live.

The effects of lockdowns, job losses, and economic disruptions have disproportionately affected extremely poor and marginalized communities. In 103 out of 158 countries surveyed in a recent report, at least 1 in 3 workers had no labor protections such as sick pay prior to the pandemic, making them underprepared to handle the crisis.

In India, where the lockdown caused an internal crisis forcing millions of internal migrant workers to return home, many workers had no labor protection or safety nets and were cut off from access to food. Yet several state governments have used the pandemic as a reason to increase daily working hours and suspend minimum pay. For those living in extreme poverty, the biggest concern is not the virus but hunger.

The World Food Programme has warned that the number of people facing food insecurity would double as a result of the pandemic without adequate measures. “COVID-19 is potentially catastrophic for millions who are already hanging by a thread,” said Arif Husain, chief economist at WFP.

Ensure multifaceted social protection programs

Given the millions of lives at stake, we must pinpoint where social services are most needed and ensure that the social protection programs are evidence-based and inclusive. Research from the International Growth Centre, directed by the London School of Economics and University of Oxford, shows that while social assistance is the main tool to lift people out of poverty, most of the lowest-income people are left behind due to mistargeting and low data quality.

Furthermore, social protection systems must be multifaceted, moving beyond short-term help and instead support people to lift themselves from poverty for the long run. “What idea is bigger than the idea that the poorest of the poor have enough talent to be self-sufficient, that if you give them a push, they’ll stay up?” Abhijit Banerjee said in his Nobel Prize lecture in 2019.

Solutions like holistic anti-poverty interventions and rapid assessments are most likely to be effective when local governments are involved in both consultation and implementation.

Because governments can be agents of scale and sustainability, by integrating economic inclusion into existing social protection programs with governments at the helm, we can build resilience for the lowest-income people at a much larger scale. Findings from the Consultative Group to Assist the Poor, housed at the World Bank, suggest that village committees created for poverty alleviation played a crucial role in helping people in poverty to protect their assets, mediate crises, and facilitate access to governments services.

Ways to alleviate poverty

COVID-19 will push 130 million into poverty by 2030, UN report shows

The pandemic will cut global economic outputs by $8.5 trillion over the next two years, costing millions of jobs. But the losses also forecast an increasingly unequal future, says U.N. economist Elliott Harris.

We now have a growing body of rigorous and sizable evidence demonstrating how to alleviate poverty. Empowering local governments and committees in these times can include supporting their capacity to deliver by hiring additional staff members, as well as providing the technical training and technological resources to distribute services. Additionally, developing dynamic monitoring systems at the grassroots levels will ensure transparency and maximize benefits for those living in extreme poverty.

We advise governments to scale more effective, evidence-based interventions by applying scientific rigor to data collection and analysis to improve anti-poverty programs and policies. As a case study, a multi-NGO coalition that led a pilot of the Bab Amal graduation program in Egypt, modeled after BRAC’s ”graduation” approach, used evidence from surveys conducted by the Abdul Latif Jameel Poverty Action Lab to adapt the program during COVID-19 and rapidly tailor its response.

In India’s Chhattisgarh state, rigorous study and research leveraged existing interactive voice response systems to deliver coronavirus-related information to rural women while also gathering information on food prices and shortages, which was then used to inform the government’s emergency response.

A detailed randomized controlled trial by the London School of Economics demonstrated that participants in holistic approaches experienced sustained benefits — such as increased earnings, savings rates, and household assets — even seven years after the program ended. A case study in Bangladesh involves a multifaceted program — a sequenced set of interventions, including a productive asset transfer, cash transfers, and continued mentoring and training — that resulted in a majority of participants escaping the poverty trap.

In the Philippines, a similar approach that was adapted for COVID-19 employed digital technologies, resulting in 99% of participants having high hygiene awareness, 96% receiving governmental cash assistance, and a majority continuing to generate income with livelihoods designed to be easily adaptable and resistant to economic, health, environmental shocks.

Working together

To address a crisis of this magnitude, it is essential that governments, nonprofit organizations, multilateral institutions, and policymakers work together to adapt shock-resistant social protection systems and comprehensive policies that integrate economic inclusion from the beginning. As World Food Programme Executive Director David Beasley warns of “the worst humanitarian crisis since World War II,” we cannot afford to ignore the complex needs of people in extreme poverty.

To drive systems change and truly move the needle on ending poverty, we must view poverty through a human rights lens and work together to commit significantly more resources. We must reach the most vulnerable and marginalized in response, recovery, and resilience efforts. Access to social protection is a human right, and it is our moral imperative to ensure that no one is left behind.

The views in this opinion piece do not necessarily reflect Devex's editorial views.

About the author

  • Shameran Abed

    Shameran Abed is senior director of BRAC’s Microfinance and Ultra-Poor Graduation programs. Abed also chairs the board of BRAC Bank's mobile financial services subsidiary, bKash and serves on the boards of several institutions including BRAC Bank and the Global Alliance for Banking on Values. He is also a member of the Partnership for Responsible Financial Inclusion and serves on the global advisory board of Pinbox Solutions, a global social enterprise committed to digital microPension inclusion in developing countries.