Since the beginning of February, almost 7 million people and killed almost 400,000. COVID-19 has hit especially hard in the US, which has become the epicenter of the current global outbreak. Nations around the globe have devoted a large amount of time and resources to combat the spread of the virus, with varying levels of success among countries.
As the world grapples with managing the spread of infection, nations are struggling to deal with the dramatic economic impact the crisis has had. According to the IMF, the number of expected people living in poverty between 2020-2021 will be around 690 million compared to previous estimates of 640 million. That means about 40-50 million more people are expected to be in poverty next year compared to pre-COVID-19. Global poverty figures are affected by many factors, but most experts believe that these particular changes are due to COVID-19 and accompanying policy responses.
These estimated projections range from 40-60 million, though other less optimistic projections pegs the number at nearly half a billion. The main problem is that the crisis is still fresh and we are lacking sufficient data to accurately predict the exact magnitude of the global rise in poverty. According to Brookings, these figures indicate that all global progress gained since the adoption of the Sustainable Development Goals in September 2015 have been summarily wiped out in just a few months.
To put the point another way, 2020-2021 is the first year in over a century in which the number of poor people around the globe is expected to rise. This reduction comes on the back of decades in incredible progress reducing global rates of poverty. For instance, in 1990, nearly 36% of the global population was in poverty. In 2015, this number had shrunk to 10%.
Even in single countries, the economic and social toll has been major. As of April, in the US, the national unemployment rate was over 14%. This number has subsided to 13% as of May, but there is still much uncertainty about how the figure will change over the next few months. Out of all developed nations dealing with the crisis, the US has been hit particularly hard, through a combination of unpreparedness and delayed federal action.
Aside from the US, global increases in poverty are not equally distributed among nations. Despite the fact that nations with advanced economies have seen the most infections and the most deaths from the virus, most of the countries that are expected to have the highest rises in poverty are developing nations where COVID-19 cases are comparatively sparse. For example, India is expected to increase their population in poverty by almost 10 million, despite having much lower infection and death rates than many advanced economies. Similarly, the number of people in poverty in Nigeria is expected to grow by almost 7 million, despite the fact that Nigeria has an extremely low rate of COVID-19 infection and deaths (~12,000 and 354 as of time of writing). These figures seem to indicate how vulnerable developing countries are to having their population slip back into poverty.
Several organizations and programs have been instituted in developed countries which include a combination of social distancing and lockdowns. Social distancing is much harder in developing countries that have poor infrastructure and poor social welfare systems such as India, Brazil, Indonesia, and the US.
How Are Organizations Dealing With the Crisis?
So what is there to do? Many countries are leading the initiative by instituting monetary stimulus packages and expanding unemployment benefits to those whose jobs have been furloughed as a result of the crisis. However, as many economies start to open back up, these sorts of programs are expected to slow down. Many developing countries do not have the capital for such programs and so are heavily constrained.
In many developing countries, entities such as the European Central Bank or the Federal Reserve in the US have shored up markets by issuing loans to companies in distress. However, many of these programs have not been able to get the requisite funds to those who need them, due to misappropriations in the fund’s distribution.
On the medical front, research institutions are currently rushing to make a COVID-19 vaccine. Vaccine development normally takes about 10 years, but some experts are optimistic that COVID-19 vaccine development will be much faster. According to an article published in The Lancet, ten vaccines against SARS-COV-2 are currently in trials. Researchers are expected to have their first set of reliable clinical data by the middle of summer.
One major challenge to vaccine development is that many treatments take advantage of novel delivery and manufacturing methods. For example, some vaccines rely on relatively new synthetic lipid nanoparticles to deliver the genetic sequences rather than a weakened version of the virus itself. Another virus currently being tested uses a modified virus that normally infects chimpanzees to deliver the genetic material. Many of these methods have never been used to create an approved vaccine in the US or Europe. As such, these kinds of vaccines will likely have to go through a longer trial period than would normally be expected.
Conclusions
The COVID-19 pandemic has had massive effects on the global economy and global public health, although it is still too early to pinpoint the exact severity of the damages. Many nations and local areas are still taking place in quarantine and social distancing measures, even as nations’ governments give the green light to open up the economy.
However, there seems to be a growing consensus among populations that local governments are not doing enough to manage the response in an effective manner. Particularly in the US, there has been a noticeable lack of coordination at the federal level. Many people are rightfully worried about the economic and social impacts of the pandemic which has resulted in much political action in the form of protests and demonstrations.
