The number of poor people in developing countries has increased by 71 million in three months. That was published in a Thursday report of the UN development program UNDP. The “shocking rate of poverty and famine” is a direct result of the war in Ukraine, Russia’s blockades on grain exports and the economic impact of the coronavirus pandemic.
The research into increasing poverty was conducted in 159 countries. Since the war, the costs of raw materials and general living expenses have risen sharply, leaving many poor households in developing countries with even less to buy. On Wednesday, the UN released a report showing that ten percent of the world’s population does not have enough food, an increase of 150 million people from 2019.
Targeted money transfers more effective
Rich countries have tried to mitigate the worst effects of the crisis through tax cuts and general subsidies, among other things. Still, the report recommends that targeted money transfers are more effective. Generic energy subsidies can help in the short term, the UNDP says, but in the longer term it can create inequality and exacerbate the climate crisis. They also do not cushion the direct blow of the sharply increased inflation as well as depositing money directly. “They provide some relief as an instant patch, but can cause worse injuries over time,” says report author George Gray Molina.
Debt in developing countries has risen to its highest in 50 years, equivalent to two and a half times their income, the World Bank says. The most profound effects of the crisis are in Armenia and Uzbekistan in Central Asia; Burkina Faso, Ghana, Kenya, Rwanda and Sudan in Sub-Saharan Africa; Haiti in Latin America; and Pakistan and Sri Lanka in South Asia. In Ethiopia, Mali, Nigeria, Sierra Leone, Tanzania and Yemen, the consequences could be particularly severe for the poorest of the poor, as in Albania, Kyrgyzstan, Moldova, Mongolia and Tajikistan.
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