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Poverty will increase in East Asia for the first time in 20 years due to Covid: World Bank

People gather in one of the slums of Jakarta, Indonesia, in the midst of the Covid-19 pandemic.

Aditya Irawan | NurPhoto | Getty Images

SINGAPORE – The number of people living in poverty in the developing countries of East Asia and the Pacific could increase for the first time in 20 years, as the coronavirus pandemic has wiped out much of this year̵

7;s economic growth, a World Bank forecast showed Monday.

The bank defined the poverty line as an income of $ 5.50 per day. He said as many as 38 million more people could fall below that income level this year, including 33 million who would have escaped poverty had it not been for the Covid-19 shock.

That World Bank forecast was published in an economic update for the region, which includes China, Southeast Asian countries, and Pacific islands, such as Fiji and Samoa. The report does not include India and other South Asian countries.

Illness, food insecurity, job losses, and school closures could all lead to health and learning losses that could last a lifetime.

The report adds to an expanding body of research on how the pandemic is disproportionately harming the poor. In July, the United Nations predicted that 8.8% of the world’s population will live in extreme poverty this year, with an increase of 8.2% in 2019. Extreme poverty is defined as an income of less than 1. $ 90 a day.

“The scars” left by the Covid-19 crisis could last for many years, the World Bank said.

“Illness, food insecurity, job losses and school closures could lead to lifelong learning and health losses. The poor will be disproportionate due to poorer access to hospitals, schools, jobs. and finance, “he said in the report.

But greater adoption of the technology following the pandemic could help the poor gain better access opportunities and public services, the bank added.

“To achieve these benefits, these technologies must be widely available.”

Weaker economic growth since 1967

The poverty forecast for developing countries in East Asia and the Pacific comes as the region is expected to grow only 0.9% this year, the weakest growth rate since 1967, according to the World Bank.

“COVID-19 has delivered a triple shock to the developing region of East Asia and the Pacific (EAP): the pandemic itself, the economic impact of containment measures and the repercussions of the global recession caused by the crisis,” he said. explained.

China, the second largest economy in the world, is expected to grow 2% this year, one of only three countries in the group that is expected to experience growth this year, the bank said.

But economic growth in the region is expected to increase by 7.4% next year, with China expected to experience the largest expansion of 7.9%, according to the report.

“The prospects for the region are brighter in 2021,” the World Bank said. “However, production is expected to remain well below pre-pandemic projections for the next two years.”

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