UN: War in Ukraine and Covid drove 165 million into poverty – 07/14/2023 – World

The backlog of global crises since 2020 — a list that includes the Covid pandemic, the Ukraine War and the subsequent rise in inflation — has pushed an additional 165 million people into poverty, all of them in low- and middle-income countries, shows a UNDP report, the UN Development Program, released this Friday (14).

The agency’s data indicate that more than a fifth of the world’s population —or about 1.65 billion people— today live on less than US$ 3.65 a day (R$ 17.50). Of these, 75 million live in extreme poverty, that is, on less than US$ 2.15 a day (R$ 10.30).

Another report indicated that 25 low-income countries spent more than 20% of their revenues on servicing external debts last year, a percentage that could rise if global interest rates continue to rise. Nearly 30% of global public debt, or about US$92 trillion (R$443 trillion), belongs to developing countries.

For the head of the UNDP, Achim Steiner, who characterized the increase in global poverty as “alarming”, the burden of external debts on the economy of these nations has become “unsustainable”. “What this means is that a government is no longer able to keep its teachers, hire doctors and nurses in hospitals, provide drugs to health centers in the periphery,” he said.

Steiner suggested a “pause” so that these countries can use the money originally intended to pay their foreign debts for social spending. For the UN, the initiative is not beyond the reach of the multilateral system – it would be similar to the Debt Service Suspension (DSSI), created by the G20 to help poorer countries during the Covid health crisis.

Eliminating poverty by 2030 is one of the global goals set by the UN. According to UNDP calculations, removing the 165 million people driven into poverty in recent years would cost US$ 14 billion (R$ 67 billion) per year, equivalent to 0.009% of world GDP in 2022. When also considering the loss income of those already living below the poverty line before 2020, this cost would be US$ 107 billion (R$ 514 billion), or 0.065% of GDP.

Last week, the entity’s secretary general, the Portuguese António Guterres, called for urgent changes in the global financial system in order to allow for a more equal distribution of resources. He said the current model is “obsolete” and “reflects the colonial dynamics of the era in which it was created”.