Increase in poverty just one example of the damage wrought by pandemic
As the world continues to battle the ongoing COVID-19 pandemic, there is increasing concern about the potentially devastating long-run impacts on emerging economies, including in Asia.
While China has managed a V-shaped recovery in economic activity, the downturn induced in many other emerging economies is expected to be much more long-lasting. For example, per capita GDP growth is thought to have plunged between 8 and 11% in 2020, the first time the global economy has contracted rather than grown in decades, making India one of the worst growth performers in the world.
Those who will bear the brunt are the poorest. According to an October 2020 Brookings Institution report by Homi Kharas, India is likely to record the largest increase in the absolute number of people living under poverty. This will mean that India, having dropped to second place, will once again reclaim number one spot ahead of Nigeria in the dubious league table of the country with the largest number of people living in absolute poverty, at almost 140 million people.
To put this in perspective, this includes 85 million people falling below the poverty line in 2020 alone due to the sharp contraction induced by COVID-19. As recently as 2016, again according to Kharas, the number of people living in absolute poverty in India was just under 125 million. In other words, last year’s events have reversed all of the recent gains and more. The picture is not that much better in other emerging economies in Asia and Africa.