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Covid-19 to add 500m into poverty

BUSINESS REPORTER

The Covid-19 pandemic could add 500m people into poverty, a new report has shown.

The call by Oxfam comes after the wealthy countries failed to adhere to their promise to set aside 0.7% of their gross national income (GNI) for aid.

It is estimated that poor countries lost US$5.7 trillion in aid due to the failure by rich countries to deliver on promises over a 50-year period.

“According to recent worst-case scenario estimates, the number of people living in poverty – on less than $5.50 a day – could increase by between 226m  and half a billion by the end of 2020 as a result of the pandemic,” Oxfam said in a report , Fifty Years of Broken Promises, published on Saturday.

Before the coronavirus pandemic, nearly 3.3bn people lived below the $5.50 per day poverty line, the report said.

Oxfam said the US$5.7 trillion owed by rich nations “is nine times larger than Sub-Saharan Africa’s stock of external debt at the end of 2019 (US$625bn)”.

“For the human development that has been lost as a result of donor countries’ inaction, there is also an immeasurable moral debt to pay,” it said, adding that the unpaid aid “could have helped eradicate hunger and extreme poverty”.

“It would cost, for instance, an estimated US$4.8 trillion over planned expenditures during 2019–2030 to meet all 17 UN Sustainable Development Goals (SDGs) in the world’s 59 lowest-income countries. 

The financing gap for achieving the health SDG worldwide is estimated at US$3.9 trillion between 2016 and 2030,” it said.

In April, the UN issued its Global Humanitarian Response Plan for Covid-19, which called for US$10.19bn to help tackle the crisis.

However the report said donors have provided 28% of the total needed.

“Real-time tracking of aid spending shows a 24.5% decrease in bilateral spending over the first seven months of 2020 compared with the same period in 2019.

The OECD estimates that if donors decide to provide the same share of GNI as aid in 2020 as they did in 2019, the amount of aid could fall by US$11bn–US$14bn in 2020 because of the contraction in GNI resulting from the Covid-19 crisis,” the report said.

Wealthy countries are expected to spend 0.7% of their GNI on aid and only Luxembourg, Norway, Sweden, Denmark, and the UK met or exceeded the 0.7% target.

The 0.7% international aid promises was first made at the UN in 1970 when the General Assembly adopted a resolution that every advanced economy should “exert its best efforts to reach the minimum net amount of 0.7% of its gross national product at market prices by the middle of the decade.

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