Over a quarter of a billion more people could crash into extreme levels of poverty in 2022 because of COVID-19, rising global inequality and the shock of food price rises supercharged by the war in Ukraine, a new Oxfam briefing reveals.
Published ahead of the World Bank and IMF Spring Meetings in Washington DC, First Crisis, Then Catastrophe shows that 860 million people could be living in extreme poverty – on less than USD$1.90 a day – by the end of the year. This figure is mirrored when it comes to global hunger: the number of undernourished people could reach 827 million in 2022.
The World Bank had projected COVID-19 and worsening inequality to add 198 million extreme poor during 2022, reversing two decades of progress. Based on research by the World Bank, Oxfam now estimates that rising global food prices alone will push 65 million more people into extreme poverty, for a total of 263 million more extreme poor this year – equivalent to the populations of the UK, France, Germany and Spain combined.
Oxfam Australia Chief Executive Lyn Morgain said wealthy governments needed to step up to respond to the deepening inequality crisis.
“These shocking predictions are a wake-up call. It is not enough that our own economy is bouncing back post-lockdowns. We know we live in an interdependent world. Our strategic interests are under threat. Australia’s next government must acknowledge this and show real leadership by responding to these growing challenges with the required level of ambition.
“Without immediate radical action, we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory.”
As many people struggle now to cope with sharp cost-of-living increases, having to choose between eating or heating or medical bills, the likelihood of mass starvation faces millions of people already locked in severe levels of hunger and poverty across East Africa, the Sahel, Yemen and Syria.
Rising food costs account for 17% of consumer spending in wealthy countries, but as much as 40% in Sub-Saharan Africa. Even within rich economies, inflation is super-charging inequality: in the US, the poorest 20% of families are spending 27% of their incomes on food, while the richest 20% spend only 7%.
For most workers around the world, real-term wages continue to stagnate or even fall. The effects of COVID-19 have widened existing gender inequalities too – after suffering greater pandemic-related job losses, women are struggling to get back to work. In 2021, there were 13 million fewer women in employment compared to 2019, while men’s employment has already recovered to 2019 levels.
The report also shows that while COVID-19 has stretched all governments’ coffers, the economic challenges facing developing countries are greater, having been denied equitable access to vaccines and now being forced into austerity measures.
Oxfam is calling for urgent action to tackle the extreme inequality crisis, including by boosting overall aid spending and ensuring any response to the Ukraine conflict is covered with new funds, with aid earmarked for other crises in poorer countries protected.
“The current Government’s strategy of pouring billions into massive defence projects will not contribute to the peace, stability and prosperity we all desire for our region,” Ms Morgain said.
“Instead, the next Australian Government must recognise the huge value in building relationships in our region and beyond through quality, long-term development programs as well as humanitarian assistance where it is needed most.”