The convergence of heightened inflation and the ongoing COVID-19 pandemic has driven approximately 68mn individuals in Asia into extreme poverty, as indicated by a report issued by the Asian Development Bank (ADB).
In the realm of developing Asia, an estimated 155.2mn people, accounting for 3.9% of the regional populace, were living in conditions of extreme poverty in the previous year. This marked an increase of 67.8mn individuals over the number that would have been anticipated without the combined impact of the pandemic and the cost-of-living challenges, as the report disclosed on August 24.
Extreme poverty, defined using 2017 price levels adjusted for inflation, entails subsisting on less than $2.15 (€1.98) per day. The dual forces of the pandemic and escalating geopolitical tensions have disrupted global supply chains, driving inflation upwards across the globe.
Although Asia and Pacific Island nations are experiencing gradual recovery, these concurrent crises are impeding the progress made towards eradicating poverty, noted Albert Park, the ADB Chief Economist. He emphasized that governments in the region can recalibrate their trajectory by reinforcing safety nets for impoverished individuals and cultivating investments and innovations that create growth prospects and employment opportunities.
In 2021, the ADB projected that the pandemic had propelled an additional 80mn people into extreme poverty compared to pre-pandemic projections from the prior year. Among the worst affected by inflation are the poor, who grapple with the inability to afford the surging costs of essential items like food and fuel. Their income is eroded, leaving meager savings for critical needs like healthcare and education, which could pave the way for long-term improvement.
The report spotlighted the disproportionate impact on women, who endure both lower earnings and the burden of unpaid labor. Furthermore, the impoverished population often faces elevated costs for accessing necessary goods and services due to their necessity to purchase smaller quantities and reside in informal settlements prone to health hazards.
The report proffered recommendations for Asian governments to counteract the cost-of-living crisis. These strategies encompass reinforcing social protection systems, bolstering support for agricultural advancement, facilitating access to financial services, prioritizing infrastructure investments, and fostering technological innovation.
ADB estimates that nearly one in three individuals across the Asian demographic, equating to around 1.26bn people, could be classified as economically vulnerable by the year 2030.
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