Wealth Gap during Corona Virus Days
For the last 18 months, life has come to a stand still in
many countries of the world. So, economic activities have suffered significantly.
GDP loss is natural phenomenon.
According to Statista:
This forecast was already restated to a GDP loss of 4.5
percent. To put this number in perspective, global GDP was estimated at around
87.55 trillion U.S. dollars in 2019 – meaning that a 4.5 percent drop in
economic growth results in almost 3.94 trillion U.S. dollars of lost economic
output.
Excerpts from
this report says perhaps the same thing too:
McKinsey: How can we start to understand the enduring
costs of the COVID-19 pandemic?
Eric Achtmann: It’s worth taking a step back just to
contextualize the short-term costs. We’re talking about $16 trillion to $35
trillion by 20253 as a potential direct cost of the pandemic. This equates to
approximately wiping two years of gross income off the average American
taxpayer, assuming a median gross income, or about 5 to 10 percent of a
generation’s productive life.
This is surely not fun for any country. There is no good news
for 2021 too. Let us hope that some of the big countries like India, China, USA,
Pakistan, Bangladesh, Russia can arrange enough doses of vaccines for their people.
If the current rate of vaccination continues then there is some hope that things
will become much better on March 2022. I mean we can go back to some normal
economic and social activities. Still, we do not know when
this will end?
Yes, many people lost their income and became poor. The
number of poor people in the world saw drastic decrease in 2019 compared to
2011. However, things have gone from bad to worse in the last 19 months. Excerpts
from Long-run
impacts of COVID-19 on extreme poverty
Global poverty had been declining before COVID-19. By our
calculations, extreme poverty, defined as those living in households spending
less than $1.90 per person per day in 2011 PPP terms, had fallen from 1.9
billion people in 1990 to 648 million in 2019, and was on pace to reach 537
million by 2030. COVID-19 interrupted this trend. The absolute number of people
living in extreme poverty rose for the first time since 1997, and, absent other
measures, we would not expect global poverty headcounts to fall below 2019
levels until 2023. As a result of long-term scarring, we estimate that by 2030,
588 million people could still live in extreme poverty, an additional 50
million people compared with pre-COVID-19 estimates.
All men are equal but some are more equal. Rich countries
could provide their citizens some kind of relief support financially. People working
in the informal sectors suffered most but they got some kind of support from
the governments. So, the national economy may suffer but that did not touch the
lives of many ordinary people. Take a look at the case of Britain.
According to Reuters:
The average British household saw its wealth rise by
7,800 pounds ($10,800) due to asset price rises and, to a lesser extent, lower
day-to-day spending, despite Britain suffering its sharpest economic downturn
in more than 300 years in 2020.
The rich got even richer:
The richest 10% households - who hold a greater
proportion of their wealth in shares and less in housing than the median
household - saw a smaller percentage rise but the biggest absolute gain of
44,000 pounds per adult.
Well, the not so well off people did not have the same kind
of wealth rise according to the same report of Reuters:
By contrast, the least wealthy 30% of Britons saw an
average increase in their wealth of just 86 pounds.
In fact, this year, British economy will see impressive growth as the
country has done remarkably well with its vaccination program.
Now, let us take a look at India, the country with the second
most population in the world. Indian economy struggled a lot in 2020 and 21.
Millions of people falling down below the poverty line.
India
Today wrote:
It estimated that the number of
poor people — with income less than $2 (Rs 150) or less in a day — in the
country increased from 6 crores to 13.4 crores. Therefore, the number of poor
people increased in India by almost 7.5 crores last year.
As the economy plunged into a
recession in 2020, India’s vast middle-class also shrank by 3.2 crores in
numbers — to 6.6 crores from the pre-pandemic level of 9.9 crores.
The scenario is more or less the
same in most parts of the world. It is the poor who have suffered more than the
rich during corona virus. It will take years for the poor people to come out of
poverty.
Mega-rich
recoup COVID-losses in record-time yet billions will live in poverty for at
least a decade
This post is not about bashing the
rich people or glorifying poverty. I have just tried to state the reality with
some facts and figures. We all need to join our hands and try for reducing poverty.
We all know that it is a tough ask
but we can surely try.
Around the world economy is down without many sector like outsourcing, foreign remittance, e-commerce or IT sector etc.
ReplyDeleteThe statice shows how hard It's becoming everyday to survive in such situation. During this pendamic situation people are bound to stay behind close doors and they were deprived from many facilities they need to survive.
ReplyDeleteAs the rich becoming richest is something not new to the economy as they have the education and opportunity to work more and to use their property properly which is unable for middle or lower middle class families.
The economic growth will go down more as we don’t know how this time will went or this vaccination programme end. All we can do is to work hard for every opportunity we get to earn something for our family or country or the economy.
There are some positive sides I have seen in this phase of staying at home preiod as people stay home with family they spend more time working households and they have opportunity to work for others.
Country like Bangladesh have a big surprise during this time as most of the educated people working with locan products, they make food and serve online, they made local dresses popular through online platforms.
As it is hard to stay alive even but we can try to be better everyday as long as we are alive.
Thank you fo such a nice informative article.
Here you briefly described the reality how many people actually affected by Covid 19.
ReplyDeleteTruely saying poor people or middle class peoples are suffering a lot...
However this economic situation will take time to normal but we will get rid of all this in sha Allah. We ofcourse think out alternative source where e-commerce must be a better option because during Covid situation e-commerce supports us a lot.
In the covid-19 situation statics show us the economic crises may be hard to deal. But it’s not a time to give up. In the pandemic situation many industrial sectors as well as IT sectors steps forward and gets remarkable progress. That’s a positive side. Other some sector struggling to survive. So, it’s high time to support each other and passes this phase positively.
ReplyDeleteThe Current situation made us more conscious about previous mistakes for which now we know our problems and works to resolve it. I think, it is a way to get back our healthy economic growth. May be it’s need some time. But, we have to keep our patience and stay po
sitive.
Thanks for your post.
Around the world economy is down without some sector like IT, freelancing, e-commerce, MFS and others. But most of sector effected by COVID19.
ReplyDeleteWe do not know when will go COVID-19 from the world. Maybe 1 year or more need time need to complete vaccines. Every country hart and soul trying to complete vaccines. I think after complete COVID vaccines then six month latter will start economy growth.
Day by day people lost them income and increasing number of poor. Now we can utilize our time by develop our skills. After COVID the skills will be overcome poor.
Yes sir I agree with you. Rich countries can support relief support and money invest to develop initiatives.
This static clearly shows that there's always positive and negative sides of everything. In this pendamic situation we're facing economic problems. But we're also learning to fight with the situation. Money matters in every aspect. It's a matter of hope that in this situation people are becoming more dependent on e-commerce. Many people are choosing e-commerce as their career over job. If we can grow this mentality that business should be emphasized as a career just like any job then in future the unemployment rate will decrease.
ReplyDeleteIt's true that the rich are becoming more richer. The middle class and the poor are having really a tough time. Their livelihood is uncertain. Now it's time for the rich to come forward to help them.
We all should come forward together to fight with this covid-19 situation. A normal and healthy life just like before is the wish of all of us.
Of course, Covid-19 poses a challenge to the middle class and the poor. But in this situation we can think positively and use it Sitting at home, we can focus on e-commerce, e-learning We can become self-reliant by increasing our basic skills. It could be, freelancing, outsourcing, graphics designing, our local products and much more. We can't stop a natural epidemic like Covid, but we can fight it and prepare ourselves to survive. Many thanks for the informative post.
ReplyDelete