The economic fallout from the COVID-19 pandemic could push half a billion more people into poverty unless urgent action is taken, warned Oxfam in a new report today. Oxfam is calling on world leaders to agree to an “Economic Rescue Package for All” to keep poor countries and poor communities afloat ahead of key meetings of the World Bank, International Monetary Fund, and G20 Finance Ministers’ next week.

Oxfam’s new report “Dignity Not Destitution,” estimates that between six and eight percent of the global population could be forced into poverty as governments shut down entire economies to manage the spread of the virus. This could set back the fight against poverty by a decade, and as much as 30 years in some regions such as sub-Saharan Africa, the Middle East and North Africa. This could mean that more than half of the global population could be living in poverty in the aftermath of this pandemic.

“While the reach of COVID-19 may be universal, the impacts will not be experienced equally,” said Abby Maxman, president of Oxfam America. “As in previous disasters, the poorest and most marginalized communities — here in the US and around the word — suffer the worst impacts and struggle to survive without any safety nets.”

The new analysis in Oxfam’s briefing was conducted on behalf of Oxfam by researchers at King’s College London and the Australian National University and also published today by the United Nations University World Institute for Development Economics Research.

Oxfam is calling 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 package should include the immediate cancellation of a trillion dollars’ worth of debt payments developing countries owe in 2020 and the creation of at least a trillion dollars in new international reserves, known as Special Drawing Rights, to dramatically increase the funds available to countries.

Debt cancellation would give the Ethiopian government access to an additional $630 million –enough to increase their health spending by 45 percent. Cancelling Ghana’s external debt payments in 2020 would enable the government to give a cash grant of $20 dollars a month to each of the country’s 16 million children, disabled and elderly people for a period of six months.

“This pandemic is clearly exposing deep systemic inequality and is quickly making disparities worse, as millions of marginalized people are struggling to stay afloat, stay healthy, and survive,” continued Maxman. “Now is the time for bold action from the G20 Finance Ministers, the International Monetary Fund, and the World Bank to help developing countries bail out the poorest and most vulnerable communities.”

The poorest workers in rich and poor nations are less likely to be in formal employment, enjoy labor protections such as sick pay, or be able to work from home. Globally, just one out of every five unemployed people have access to unemployment benefits. Two billion people work in the informal sector with no access to sick pay —the majority in poor countries where 90 percent of jobs are informal compared to just 18 percent in rich nations.

Women are on the front line of the response to COVID-19 and 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 per cent of whom are women– have already been laid off or sent home without pay after orders from western clothing brands were cancelled or suspended.

Many wealthy nations have introduced multi-billion-dollar economic stimulus packages to support business and workers, including the US, but most developing nations lack the financial firepower to follow suit. The UN estimates that nearly half of all jobs in Africa could be lost because of this pandemic.

Delivering the $2.5 trillion the UN estimates is needed to support developing countries through the pandemic would also require an additional $500 billion in overseas aid. This includes $160 billion which Oxfam estimates is needed to boost poor countries’ public health systems and $2 billion for the UN humanitarian fund. Emergency solidarity taxes, such as a tax on extraordinary profits or the very wealthiest individuals, could mobilize additional resources.

“Now is not time for half-measures and incremental tweaks to an economic system so rigged in favor of the powerful,” concluded Maxman. “Now is the time for decisive and audacious action to build fairer, more sustainable economies.”

Notes to editors

The World Bank and IMF 2020 Spring meetings will take place virtually from April 17-19, 2020. G20 Finance Ministers and Central Bank Governors will meet virtually on April 15.

Download Dignity Not Destitution: An Economic Rescue Package for All

In 2018, there were 3.4 billion people living on less than $5.5 per day according to the World Bank. Researchers used mathematical models to predict how many more people would fall below World Bank poverty lines of $1.90, $3.20 and $5.50 a day based on a 5, 10 and 20 percent drop in income. A 20 percent drop in income would mean an estimated 547.6 million more people living on less than $5.50 a day. Taking the range of estimates into account researchers predict a 6 - 8 percent rise in poverty compared to 2018 levels.

News outlets are reporting over 1 million garment workers in Bangladesh have lost their jobs as a result of orders being cancelled or suspended. The percentage of women working in the Garment industry in Bangladesh is from the World Bank.

Figures for Ghana are from Diloá Jacob Bailey Athias of Development Pathways, based on UNDESA population figures. Figures for Ethiopia are from Development Finance International.

Oxfam is gearing up its entire humanitarian aid delivery system to help the most marginalized and people living in poverty as they face the rising tide of infections ahead. Despite access restrictions, we are working around the clock with communities, local NGOs, women and refugee-led organizations in more than 50 countries to deliver much needed humanitarian assistance and curb the spread of the virus.

Oxfam is scaling up its cash transfer programming and food assistance in vulnerable communities across the globe —from poor urban settlements in Bangladesh to rural indigenous communities in Guatemala. Oxfam has been a leader in cash transfer programming for more than 20 years; in Yemen, we provide cash to families displaced by the conflict to buy food; in Colombia, we provide cash to Venezuelan migrants on the move; and in the Democratic Republic of Congo, which faced the world's second largest Ebola epidemic in history, we distribute cash and vouchers to allow the most vulnerable households to buy food and basic necessities.