(ORDO NEWS) — The World Bank has said the world will not be able to eradicate extreme poverty by 2030. According to his forecast, almost 7% of the world’s population by this time will probably live in poverty. The fight against poverty was slowed down by the COVID-19 pandemic, “special operation” in Ukraine and high food prices.
The World Bank concluded in its report that its goal of reducing extreme poverty to 3% by 2030 is not currently achievable. Due to the pandemic, the Russian “special operation” * in Ukraine and high food prices in 2030, the poor people in the world will be almost 7% (approximately 574 million people), the report says .
In 2020, when the pandemic began, 70 million people fell into extreme poverty, the biggest increase since monitoring began in 1990, the report says. The organization noted that a total of 685 million people could be pushed into extreme poverty by the end of 2022, nearly 90 million more than they would be if poverty reduction plans were implemented. “If the forecast holds up, this will be the second worst year for poverty reduction this century,” the report says.
The World Bank also indicated in the report that the poverty threshold now stands at $2.15 a day.
“Our mission is concerned about the increase in extreme poverty and the decline in overall prosperity caused by inflation, depreciating currencies and broader overlapping crises that stand in the way of development, ” World Bank President David Malpas told Bloomberg. “Macroeconomic policy adjustments are needed to improve the distribution of global capital, strengthen currency stability, reduce inflation and resume median income growth.”
To combat poverty and inequality, the World Bank proposes:
- introduce targeted support for vulnerable and poor citizens. However, subsidies should be avoided as they distort prices and have negative long-term effects. According to the organization, targeted cash transfers are much more effective;
- invest in long-term development. Although it is difficult to protect such investments, investments in youth education, research and development, and infrastructure projects should be prioritized for spending public funds. All this can positively affect economic growth, inequality or poverty in the future;
- raise domestic incomes without hurting the poor. For example, a property and carbon tax could be introduced, the base for indirect and income taxes could be broadened, and direct cash transfers could be provided to offset the impact of the levy on the poor.
At the same time, the World Bank notes that most high-income countries have managed to fully offset the impact of the pandemic on poverty through sound fiscal policy, and upper-middle-income countries have offset half the impact of COVID-19. Low-income countries, in turn, only offset the blow by a quarter, as they lack full access to finance, have weaker service delivery systems, and have higher levels of informality that make it harder to retain jobs.
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