What does this mean for Global Economy?
If the Pew estimate holds true in actual World Bank income data still being gathered, it would mark an end to a pattern that has seen the global middle class expand without fail since the 1990s thanks to the rapid growth of developing economies like China and India. When Pew last calculated the size of the global middle class in 2011 it made up 13% of the global population. By 2019 that had grown to nearly 18%, Kochhar said, with an average of 50 million people a year joining the middle-income ranks over the past decade.
In a separate paper published Monday based on surveys of 47,000 households in 34 developing countries with a collective population of almost 1.4 billion people, researchers at the World Bank found that 36% of households saw job losses last year and almost two-thirds saw incomes fall. The result was the first increase in global poverty seen since the Asian financial crisis of 1997-98, the bank’s researchers wrote.
As in many rich countries, the surveys of countries ranging from Burkina Faso to Colombia, Indonesia and Vietnam show the burden of the economic hit disproportionately fell on women, young people and the self-employed in urban centers. But they also point to the consequences that slower recoveries are expected to have. While the U.S. has unleashed unprecedented fiscal rescue efforts for its economy, many developing economies have had smaller resources to draw on.
COVID – 19 Pandemic Could Push Half a Billion People into Poverty: Oxfam in 2020
The coronavirus pandemic could push an additional half a billion people into poverty, aid charity Oxfam had warned in April 2020, demanding that world leaders contain the economic fallout and cancel $1 trillion of developing countries’ debt payments in 2020. Oxfam rang the alarm for richer nations to agree to an “Economic Rescue Package for All”, which would enable the governments of poor countries to provide cash to those who have lost their livelihoods. The call came ahead of crucial gatherings of the World Bank, the International Monetary Fund (IMF) and Group of 20 (G20) finance ministers.
“For nearly three billion people living in poverty and without enough clean water, jobs and access to basic healthcare – and for millions already facing years of malnutrition, disease and conflict – the coronavirus will be a lethal killer. G20 finance ministers, the IMF and the World Bank are in the position to give developing countries an immediate cash injection to help them bail out poor and vulnerable communities, Oxfam had said. The IMF should issue $1 trillion in Special Drawing Rights – an international reserve asset created by the IMF – as a one-time stimulus to help Nations most in need”, Paul O’Brien, vice president for policy and advocacy at Oxfam America, had told Al Jazeera
The Digpu News Bottomline
In 2019, Prime Minister Narendra Modi had envisioned to take India to the goal of being a “5 Trillion Dollar” economy by the year 2024-25. The budget of 2021-22 made it clear that despite being so badly hit by the pandemic and its devastating economic effects, the government has got given up on that goal, with the government banking on the infrastructure sector to take it there.
However, with 3.2 crore people been pushed into poverty already the dream seems to be far from getting manifested into reality and more like a mirage.