This edition of the biennial Poverty and Shared Prosperity report brings grim news. The COVID-19 (coronavirus) pandemic and its associated economic crisis are converging with armed conflict and climate change to reverse hard-won gains in poverty reduction and shared prosperity. The fight to end poverty has suffered its worst setback in decades after more than two decades of progress. The goal of virtually ending extreme poverty by 2030, already at risk before the pandemic, is now beyond reach, and the objective of advancing shared prosperity—raising the incomes of the poorest 40% in each country—will be much more difficult.
Poverty and Shared Prosperity 2020: Reversals of Fortune presents new estimates of COVID-19's impacts on global poverty and shared prosperity. Harnessing fresh data from frontline surveys and economic simulations, it shows that pandemic-related job losses and deprivation worldwide are hitting already-poor and vulnerable people hard, while also partly changing the profile of global poverty by creating millions of 'new poor.' Original analysis included in the report shows that the new poor are more urban, better educated, and less likely to work in agriculture than those living in extreme poverty before COVID-19. It also gives new estimates of the impact of conflict and climate change, and how they overlap. These results are important for targeting policies to safeguard lives and livelihoods. It shows how some countries are acting to reverse the crisis, protect the most vulnerable, and promote a resilient recovery.
These findings call for urgent action. If the global response fails the world's poorest and most vulnerable people now, the losses they have experienced to date may be dwarfed by what lies ahead. Success over the long term will require much more than stopping COVID-19. As efforts to curb the disease and its economic fallout intensify, the interrupted development agenda in low- and middle-income countries must be put back on track. Recovering from today's reversals of fortune requires tackling the economic crisis unleashed by COVID-19 with means proportional to the crisis itself. In doing so, countries can also plant the seeds for dealing with the long-term development challenges of promoting inclusive growth, capital accumulation, and risk prevention— particularly the risks of conflict and climate change.