Gathering data on extreme poverty is difficult at the best of times, but it’s doubly harder (or well-nigh impossible) during a pandemic. Such data are typically collected via face-to-face household surveys, but these were put on hold last year.
In a study of 122 national statistical offices carried out in May of 2020, the World Bank found that 69% had completely stopped collecting data via face-to-face surveys, and a further 27% had partly stopped (leaving only 4% that had continued with normal data collection).
We therefore don’t yet have good data on the effect of the pandemic on extreme poverty. However, there are ways of estimating how many people are in poverty, using data from national accounts (i.e., GDP per capita). These data are not collected via face-to-face surveys, so it has still been possible to obtain them during the pandemic.
In order to estimate (or ‘nowcast’) the number of people in poverty, the World Bank takes the last year for which the full income distribution was known, and then shifts it left or right, depending how much GDP per capita grew between that year and the current year. (See the diagram on p.5 here.)
Using this method, World Bank researchers calculate that 97 million people fell into extreme poverty as a result of the pandemic. In the chart below, 97 million is equal to the difference between 732 million (the estimated number of people in extreme poverty) and 635 million (the expected number).
Countries that have permanently shut their borders in a misguided effort to reduce Covid infections to zero are heading for economic catastrophe, according to Matthew Lynn in the Telegraph.
Controlling Covid through lockdowns and closed borders was a triumph to start with. As the pandemic has dragged on, and borders remain sealed for years without end, it is going to take a huge economic toll. Australia is heading back into recession even as the rest of the world recovers. New Zealand is seeing investment flee.
In truth, in an increasingly globalised and networked world, countries cannot exist in semi-lockdown forever and borders cannot remain permanently closed without doing huge economic damage. They can turn themselves into hermits if they want to – but the price will be a very high one. …
After a record 30-year run without a single recession, the [Australian] economy shrank last year, and it is now expected to contract again over the next couple of quarters.
Huge swathes of the population are back in lockdown as Covid infections rise, and output is inevitably starting to fall. As the rest of the world recovers, and growth accelerates in the United States, Britain, and, even if slightly more sluggishly, across most of mainland Europe, both countries are illustrating the cost of ‘zero-Covid’ strategies.