Virus tips 77m into extreme poverty in 2021, UN says

UNITED NATIONS－The coronavirus pandemic plunged 77 million more people into extreme poverty last year and a "great finance divide "between rich and poor countries amid the pandemic poses a major setback for sustainable development, said a United Nations report on Tuesday as more than 500 million infections were logged around the world.

The 2022 Financing for Sustainable Development Report: Bridging the Finance Divide, which was released on Tuesday, finds that while rich countries were able to support their pandemic recovery with record sums borrowed at ultralow interest rates, the poorest countries spent billions servicing debt, preventing them from investing in sustainable development.

The report came as global COVID-19 cases topped 500 million on Tuesday, according to the Center for Systems Science and Engineering at Johns Hopkins University. More than 6.1 million deaths were logged worldwide.

The report is on financing to achieve UN development goals for 2030, including ending poverty, ensuring quality education for all young people and achieving gender equality.

The UN said 812 million people lived in extreme poverty－on $1.90 a day or less－in 2019, and the number had risen to 889 million by 2021 amid the pandemic.

The pandemic shock plunged 77 million more people into extreme poverty last year, it said.

Unless the international community reverses course, this divergence will persist and may further intensify over the coming months and years, the report warns.

Global geopolitical tensions are rising, fueling uncertainty. The conflict in Ukraine has led to sharply rising commodity prices, further supply bottlenecks and increased financial market volatility and downside economic risks, raising the specter of stagflation.

The tightening of global financing conditions in the face of rising inflation will put more countries at risk of debt distress, further constraining their fiscal space and hampering economic growth.

Today, 60 percent of least developed and other low-income countries are already at high risk of, or in debt distress. Vaccine inequity remains high. Climate change will continue to exacerbate financing challenges, particularly in vulnerable countries, it said.

UN Deputy Secretary-General Amina Mohammed, who launched the report at the UN headquarters in New York, called for action to address the "great finance divide".

"The international community has taken important steps to mitigate the pandemic's social and economic fallout, including through large-scale provision of emergency financing and the creation of debt relief instruments," she said. "But more is needed to close the recovery gap, address the risk of debt distress and secure a better future for our children and for ourselves."

The report estimates that GDP per capita in 20 percent of developing countries will not return to pre-2019 levels by the end of 2023.

It said the poorest developing countries pay 14 percent of their revenue on average for interest on their debts, with many forced to cut budgets for education, infrastructure and capital spending as a result of the pandemic. On the other hand, rich developed countries pay only 3.5 percent.

The report was produced by the UN Department of Economic and Social Affairs in collaboration with more than 60 international agencies.

Agencies - Xinhua