The Covid-19 pandemic, the cost-of-living crisis and the war in Ukraine have pushed 165 million people into poverty since 2020, the United Nations (UN) said Thursday (July 14), calling for a pause in debt repayments for developing countries.
Because of these shocks, 75 million people will have fallen into extreme poverty, defined as living on less than US$2.15 a day, between 2020 and the end of 2023 – and 90 million more will fall below the poverty line of US$3.65 a day, according to a study published by the United Nations Development Program.
"Countries that could invest in safety nets over the last three years have prevented a significant number of people from falling into poverty," UNDP chief Achim Steiner said in a statement."In highly indebted countries, there is a correlation between high levels of debt, insufficient social spending, and an alarming increase in poverty rates."
And developing countries, despite having lower levels of debt, are paying more interest, partly because of higher rates. If the income losses among the already poor prior to the shocks are also included, the mitigation cost would reach some US$107 billion, or 0.065 per cent of the world's GDP and around a fourth of total external public debt service, the report's authors estimated.
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