Poverty Reduction Challenges in the Face of the Pandemic
There’s no doubt the global economic effects of the pandemic have had a detrimental impact on poverty reduction efforts across the world. In addition to COVID-19 claiming the lives of so many worldwide, increased lockdowns, social distancing measures and disruptions of supply chains have sparked major economic loss. This has pushed vulnerable populations, particularly women, further below the poverty line. According to the World Data Lab, the world has lost five years in its attempt to end extreme poverty, reporting a rise of 50 million people experiencing extreme poverty in 2020.
However, the distribution of those who have fallen into poverty is not equally dispersed throughout the world and is much more prominent in countries where governments are ill-equipped to provide social protection measures.
Worrying Poverty Reduction Levels Globally
Although the pandemic drastically affected both developed and developing nations, causing various economic challenges, including labour cuts, investment loss, and decline in the tourism levels, developed nations reacted and increased their mitigative efforts through fiscal and monetary policies, reaching 28 percent of their GDP. In contrast, many developing nations had little to spend in response to the pandemic, with most only spending approximately 7 percent of their GDP in curbing negative impacts.
Prior to COVID-19, there were only 103 social protection measures implemented in 45 countries. Since the onset of the pandemic, the number of social protection programs rose to 1414 across 215 countries. Although these financial aids were designed to support those struggling, most fragile countries didn’t – and still don’t – have the resources to keep programs afloat. Geographically, poverty is very concentrated in Africa and success in ending poverty globally will largely depend on African fragile states. It is estimated that by 2030, two of the most fragile and conflict states, Nigeria and the DRC, will experience the greatest increase in the number of people living in extreme poverty if social supports are not provided to mitigate these risks.
The Growing Need for Support in Times of Crisis
In honour of Poverty Eradication Day on October 17th FINCA Canada, in partnership with the Government of Canada, is committed to being a catalyst for economic inclusion and poverty reduction amongst vulnerable communities. This includes the offering of financial services, promoting financial literacy and increasing access points for the poor to enable long-term economic growth for those working to break free from poverty and counter the negative impact of the pandemic.
FINCA Canada understands the sizeable impact this pandemic has had and will continue to have on fragile communities. In partnership with the Government of Canada, FINCA Canada works to raise awareness around the importance of providing access to financial services for communities in both Haiti and the DRC. By offering a variety of financial aid, such as their global microfinance program and financial inclusion project, FINCA hopes to provide struggling individuals and communities with an opportunity to pull themselves out of poverty and better achieve financial freedom.
Click here to learn more about FINCA Canada’s work with poverty reduction and show your support for increasing financial access in impoverished communities.