OXFAM International on Thursday raised alarm that the Coronavirus pandemic could push over half of the world’s population, over 500 million more people into poverty unless urgent action is taken to bail out developing countries.
Oxfam, founded in 1942, is a confederation of 19 independent charitable organizations focusing on the alleviation of global poverty through an extensive collection of operations.
Ahead of key meetings of the World Bank, International Monetary Fund (IMF) and G20 Finance Ministers’ holding next week through virtual platform, the organization is therefore calling on world leaders to agree to an ‘Economic Rescue Package for All’ so as to keep poor countries and poor communities afloat.
Oxfam’s warning, contained in a new report, titled: ‘Dignity Not Destitution,’ presents fresh insights on the global shutdown of economies across the globe following the Coronavirus pandemic.
According to the report, the pandemic could set back the fight against poverty by a decade, and as much as 30 years in some regions such as sub-Saharan Africa and the Middle East and North Africa. The research leading to the report, published today (Thursday, April 9, 2020) by the United Nations University World Institute for Development Economics Research, was conducted by researchers at King’s College London and the Australian National University.
It called for an ‘Emergency Rescue Package for All’ to enable poor countries to provide cash grants to those who have lost their income and to bail out vulnerable small businesses.
The report recommended among other measures, the immediate cancellation of US$1 trillion worth of debts owed by developing countries due for payments this year, 2020, the creation of at least US$1 trillion in new international reserves, known as Special Drawing Rights, to dramatically increase the funds available to countries.
Jose Maria Vera, Oxfam International Interim Executive Director said: “The devastating economic fallout of the pandemic is being felt across the globe. But for poor people in poor countries who are already struggling to survive there are almost no safety nets to stop them falling into poverty. G20 Finance Ministers, the IMF and World Bank must give developing countries an immediate cash injection to help them bail out poor and vulnerable communities. They must cancel all developing country debt payments for 2020 and encourage other creditors to do the same, and issue at least US$1 trillion of Special Drawing Rights.”
The report noted, among other things, that existing inequalities dictate the economic impact of this crisis, the poorest workers in rich and poor nations are less likely to be in formal employment, enjoy labour protections such as sick pay, or be able to work from home; and that globally, just one out of every five unemployed people have access to unemployment benefits.
While stating that about two billion people work in the informal sector with no access to sick pay, with majority of them in poor countries where 90 percent of jobs are informal compared to just 18 percent in rich nations, the report also highlighted that though women are on the front line of the coronavirus response, they are likely to be hardest hit financially.
“Women make up 70 percent of health workers globally and provide 75 percent of unpaid care, looking after children, the sick and the elderly. Women are also more likely to be employed in poorly paid precarious jobs that are most at risk. More than one million Bangladeshi garment workers –80 percent of whom are women– have already been laid off or sent home without pay after orders from western clothing brands were cancelled or suspended,” the report stated.
Noting that while many wealthy nations, including the UK and the US, have introduced large-scale economic stimulus packages to support business and workers, the report acknowledged that the story is different in developing nations which “lack the financial firepower to follow suit.”
According to Oxfam, UN estimates that nearly half of all jobs in Africa could be lost as a result of the Coronavirus.
“Governments must learn the lessons of the 2008 financial crisis where bailouts for banks and corporations were paid for by ordinary people as jobs were lost, wages flatlined and essential services such as healthcare cut to the bone. Economic stimulus packages must support ordinary workers and small businesses, and bail outs for big corporations must be conditional on action to build fairer, more sustainable economies,” added Vera.
