Quarter Billion More People Will Fall Into Poverty in 2022

TThe charity Oxfam International estimates that the combined effects of Covid-19 and rising global inequalities, as well as the rise in food prices due to wars like those in Ukraine, will see more than 25% more people fall into poverty each year.

In a Tuesday report, the group stated that the combined impact could result in 860,000,000 people living below $1.90/day by 2022. This is 263 millions more than was predicted before the pandemic. That’s equivalent to the entire population of the U.K., France, Germany and Spain combined.

Oxfam released the report ahead of the International Monetary Fund and World Bank Spring Meetings taking place next week in Washington, where global economic challenges and the shock of Russia’s invasion are set to feature as two of the main focuses.

People who are the most vulnerable will feel it hardest. Food costs account for 40% in sub-Saharan Africa’s consumer spending, as opposed to 17% in advanced economies. Oxfam cited an IMF study.

Oxfam warns that inflation could lead to financial chaos in low-income countries, who need dollars to import energy, medicines, or food, as well as their debts in U.S. currencies.

Oxfam suggested a few solutions. These include a 2% annual wealth tax for millionaires and 5% for billionaires. The organization projects that this would bring in $2.52 trillion annually. The amount would allow for 2.3 billion people to be lifted out of poverty. They could also provide sufficient vaccines around the globe and universal health care for those who live in low and middle income countries.

“We reject any notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare,” said Oxfam International Executive Director Gabriela Bucher. “We only see the absence of economic imagination and political will to actually do so.”

The U.S. President Joe Biden proposed last month a minimum 20% tax for households with a household value of more than $100million. While it could generate hundreds of billions of dollars in new revenue and has strong support among many Democrats, it’s unlikely to be passed anytime soon in Congress, where the party has razor-thin margins, because many moderate lawmakers are skittish about such a big tax overhaul.

Oxfam has also asked the Group of 20 largest countries to cease all debt payments for this and future years. This is in response to all requests from low- and middle-income countries. The group estimated that debt servicing for all of the world’s poorest countries will amount to $43 billion this year — equivalent to almost half their food-import bills and public spending on health care combined.

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