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Half a billion people at risk of poverty from virus fallout

Unless governments implement measures to cushion the blow.
One recommendation from the charity group suggests suspending developing-nation debt for a year and cancelling it where needed. Image: Shutterstock

The economic hit from coronavirus threatens to put more than half a billion people into poverty unless countries take action to cushion the blow, according to a report from the charity group, Oxfam.

“Under the most serious scenario of a 20% contraction in income, the number of people living in poverty could increase by between 434 million and 611 million,” said the report, which is based on an analysis by researchers at King’s College London and the Australian National University.

The charity group — citing the report published by the United Nations University World Institute for Development Economics Research — called on world leaders to agree to a “Economic Rescue Package for All” ahead of the International Monetary Fund and World Bank’s virtual spring meetings next week.

The recommendations include:

  • Giving cash grants to people for survival and subsidies to workers
  • Bailing out small businesses unable to cope with the crisis, and big ones conditional on steps to protect the interests of workers, farmers and taxpayers
  • Suspending developing-nation debt for a year and cancelling it where needed
  • The IMF issuing $1 trillion of new reserve assets called special drawing rights (SDRs)
  • Increasing immediate aid
  • Taxing extraordinary profits, the wealthiest people, speculative financial products and activities that hurt the environment.

© 2020 Bloomberg

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