The global cost-of-living crisis, intensified by the war in Ukraine, has pushed 71 million people in developing countries into poverty in just three months, the United Nations Program stated in a report released this Thursday by United Nations for Development (UNDP).
Achim Steiner, the UNDP administrator, said that “this cost of living crisis is pushing millions of people into poverty and even hunger at breakneck speed, with the threat of more social unrest growing every day.”
The impact of this crisis on poverty is noticeably faster than that of the covid-19 pandemic, unleashed at the beginning of 2020, according to the UNDP report.
More than two-thirds of the 167% increase in natural gas during the 12-month period ending May 31, 2022, has been recorded since the start of the war on February 24 this year.
In crude oil and its two main refined products, gasoline and heating oil, the post-invasion period accounts for between half and 60% of annual price increases, almost 40% of the annual increase for wheat, and between 60 and 75% of the annual price increases for corn and sunflower seed oil.
“This unprecedented price increase means that, for many people around the world, the food they could afford yesterday is no longer within reach today,” Steiner summarized.
“This cost-of-living crisis is pushing millions of people into poverty and even hunger at breakneck speed, making the threat of more social unrest grow every day” .Achim Steiner
The analysis, covering 159 countries, showed that the most devastating and immediate effects of rising commodity prices are felt in the Balkans, the Caspian Sea region and sub-Saharan Africa.
The countries facing the most difficult impacts of the crisis across all poverty lines are Armenia and Uzbekistan in Central Asia; Burkina Faso, Ghana, Kenya, Rwanda, and Sudan in sub-Saharan Africa; Haiti in Latin America; and Pakistan and Sri Lanka in South Asia.
In Ethiopia, Mali, Nigeria, Sierra Leone, Tanzania and Yemen, the impacts could be particularly severe on the lower poverty lines, while in Albania, Kyrgyzstan, Moldova, Mongolia and Tajikistan they could be even more severe.
The UNDP projects that, of the 71 million people pushed into poverty, 51 million may fall into the extreme poverty line, which the World Bank sets for those who subsist on an income of less than $1.90 a day, and 20 million below a relative poverty line of $3.20 a day as income.
Combining pre-existing inflation with war-induced disruption to food production and distribution, food insecurity and the risk of famine, already fueled by droughts, are exacerbated.
An estimated 49 million people in 46 countries are living in near-famine conditions, with 750,000 at immediate risk of starvation, including around 75% in Ethiopia and Yemen.
The report recalls that the International Monetary Fund (IMF) projects an inflation rate in 2022 of almost six per cent in advanced economies, the highest in four decades, and close to nine per cent in developing countries and emerging economies, the highest since the 2008-2009 recession.
As interest rates rise, in response to skyrocketing inflation, there is a risk that more recession-induced poverty will be triggered, further exacerbating the crisis, accelerating and deepening poverty around the world, warns the report.
Developing countries, facing depleted fiscal buffers and high levels of sovereign debt, as well as rising interest rates in global financial markets, “face challenges that cannot be resolved without urgent help from the world community,” says the UNDP.
Steiner insisted that “international efforts can save lives and livelihoods, including decisive debt relief measures; keeping international supply chains open; and ensuring that some of the world’s most marginalized communities can access food and energy.”
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