• Zac Zabarauskas

Living On $2.76 A Day, Coronavirus To Pull Millions Into Poverty

Updated: Aug 7

For people in developing nations, the COVID-19 pandemic is sparking a greater, impending crisis.

Global poverty rates are set to skyrocket as a result of the pandemic.

Not only are 75% of new daily cases been recorded in developing countries, for their populations the greater danger is the impending economic fallout.


The line for a food distribution centre in Bangkok.

Credit: Adam Dean for The New York Times.


Imagine living on less than AU$2.76 a day.


This will soon be the reality for an estimated 400 million people worldwide who will be thrust into extreme poverty as a result of the virus. This meteoric upswing will raise the worldwide total of people living in extreme poverty to 1.12 billion.

The world is holding its breath for a cure. However, in developing countries where access to medical services and healthcare is limited a cure might not bring an end to the threat. In fact a cure may only broaden the gap between the rich and poor. 2 billion people worldwide work in the informal sector without unemployment assistance or health care.

Those without access to a universal and affordable cure could find themselves segregated in countries with little social welfare support structures. Further perpetuating a generational cycle of poverty that restricts the economic growth of the world’s poorest.

Compounded by these factors, the fallout from coronavirus will mark the first major increase in worldwide poverty numbers since 1998. In mere months, reversing decades of positive work to reduce global poverty. Speaking to The New York Times, M.I.T professor and the winner of the 2019 Nobel prize for economics, Abhijit Banerjee, warned that "there will be groups of people who climbed up the ladder and will now fall back ... They will fall into poverty, and they may not come out of it."


A united globalised response is needed to front the humanitarian and economic effects of the virus.


Australia is in a unique position to lead this response. Our closest neighbours, Indonesia, the Philippines and much of South-East Asia are all at risk of economic fallouts.


Already in Indonesia 25.1million people live below the poverty line, a group almost as large as the entire Australian population. In 2019 the World Bank reported that 20.6% of Indonesia’s population were at risk of falling into poverty. This could see a further 53 million people living below the poverty line in one country alone. The unprecedented effects of COVID-19 threaten to make these warnings a reality.


A slum in the Philippines during the COVID-19 outbreak.

Credit: Jes Aznar for The New York Times.


Throughout South-East Asia economic development often doesn’t reach the people that need it most, for many the effects of poverty remain a constant way of life.


Australia shares many important trade and diplomatic ties with these nations. Economic stability in this region is vital for Australia’s own growth and prosperity. Despite this, successive Australian governments have continued to cut aid budgets to this region. Last year alone the Coalition cut aid spending by more than $115 million. Tim Costello, the Chief Advocate of World Vision condemned the move on Twitter, saying “the world’s poor once again forgotten”.

In an article from the ABC Professor Andy Sumner highlighted the “importance of a dramatic expansion of social safety nets in developing countries”. However, no country can face the threat alone.


Australia can use this moment as a time to declare itself as a leader in global humanitarian response. Nations must seek to unite with a globalised response and consider what “the international community can do to help”.

As Australians we should continue to advocate for the economic and humanitarian support of developing nations. Every nation must work together to come out of this as a stronger, united global community.


References and Further Reading

https://theconversation.com/global-poverty-coronavirus-could-drive-it-up-for-the-first-time-since-the-1990s-140662

https://www.abc.net.au/news/2020-04-09/coronavirus-poverty-study-research-oxfam-anu/12136222

https://www.smh.com.au/business/the-economy/pandemic-could-push-half-a-billion-into-poverty-report-20200409-p54ih5.html

https://www.worldbank.org/en/country/indonesia/overview#:~:text=Out%20of%20a%20population%20of,above%20the%20national%20poverty%20line.

https://www.abc.net.au/news/2019-04-02/federal-budget-foreign-aid-slashed-by-more-than-$115-million/10963748

https://theconversation.com/how-might-coronavirus-change-australias-pacific-step-up-136517


https://www.nytimes.com/2020/04/30/world/asia/coronavirus-poverty-unemployment.html

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