Up to 80m more Asians in extreme poverty because of Covid-19: ADB report

THE pandemic pushed an extra 75 million to 80 million people in Asia into extreme poverty, in a major setback to poverty reduction efforts, researchers have estimated.

That's on top of the estimated 104 million who would have been already living in extreme poverty in developing Asia, without the global outbreak of Covid-19.

Economic disruption from Covid-19 raised the share of the population in extreme poverty by about two percentage points, the Asian Development Bank (ADB) said in a report on Tuesday. Extreme poverty is defined as living on less than US$1.90 a day.

The share of people in developing Asia below the extreme poverty line had been projected to halve from 5.2 per cent in 2017 to 2.6 per cent - but remained at an elevated 4.5 per cent instead, according to the ADB.

"The pandemic worsened developing Asia's poverty position under the neutral distribution assumption, and the simulated poverty estimates are even higher if we consider scenarios of greater inequality," the ADB said in its report.

While the report noted that households resorted to a variety of ways to manage their financial difficulties amid the pandemic, "some of these strategies cause scarring effects in the long term and could be potentially costly".

In its survey of people in developing Asia, its Asian Development Bank Institute found that 54.9 per cent of households reported lacking financial resources for at least a week.

Of these, 83.3 per cent cut down on spending, while 49.6 per cent drew on their savings. Other ways that households coped with financial difficulty included deferring payments and repayments (35.4 per cent), selling or pawning properties (18.2 per cent), and borrowing from moneylenders (14.5 per cent) or banks (14.2 per cent).

"Proper targeting of policies for the extremely poor, along with continued support from government and development institutions, is important in alleviating the long-term effects of the pandemic," the ADB concluded.

Said ADB chief economist Yasuyuki Sawada: "Asia and the Pacific has made impressive strides, but Covid-19 has revealed social and economic fault lines that may weaken the region's sustainable and inclusive development."