Appl Ex 10v

Application Exercise 10v COVID-19 and global poverty

  1. Outline four pieces of evidence that COVID-19 is likely to ‘set back’ the global march towards reducing poverty.
    • High levels of job losses in the informal sector (which is an important employer in poorer countries and of the world’s poorest) e.g. jobs for rickshaw drivers, show shiners, rubbish sorters and workers in small cafes and restaurants disappeared.
    • Minimal financial support for poorer countries from richer countries, therefore less money for governments of those poorer countries to support programmes designed to lift their populations out of poverty.
    • The G20 has suspended some debt repayment (from poorer countries), but many countries still have to divert money to repaying this debt, and away from healthcare and social support.
    • Remittances dried up as workers from poorer countries living and working in richer countries (and sending money home to their families in those poorer countries) had to return to their countries of origin as borders locked down.
    • Likely that 100 million people would be pushed into extreme poverty during 2020.


  1. Explain two reasons why the world’s poorest people are more likely to be severely affected by COVID-19 compared to those in richer countries.
  • No government wage subsidies or support payments (like those in the richer countries like Australia, USA and UK.)
  • Less capacity to draw on savings when the economy shuts down
  • Weaker healthcare system
  • Lower vaccinations rates/ less capacity by governments to purchase the vaccines and distribute for free among their citizens (unlike in richer countries)
  • Already poor health on average among the population
  • More crowded living conditions increases the likelihood of spread of COVID-19 (less ability to isolate)
  1. Explain why the current level of support for the world’s poorest countries from the developed world is likely to be insufficient to address the impact of the coronavirus economic downturn.
  • The IMF has overseen the distribution of emergency funds from richer to poorer countries, but African finance ministers estimated it was less than one third of what had been lost by their countries during the crisis.
  • Many of the private loans still owed by governments of poorer countries still needed to be repaid (i.e. their had been no pause on repayments) therefore depleting capital resources in the countries and reducing their capacity to rebuild.