For the first time in twenty years, the number of people living in extreme poverty is increasing again. This is partly due to corona, the World Bank made announced earlier this week. Nobel laureates Esther Duflo and Abhijit Banerjee say it is time for action.
More than one hundred million people worldwide have fallen below the threshold of extreme poverty due to the pandemic. They live on less than 1.60 euros per day. In the short term their situation will deteriorate. “Globally, it is not the case that corona has affected poorer countries more or that there are more infections,” says Esther Duflo. “But the effect of the economic crisis is many times greater in those countries.”
Duflo and Banerjee know all about it. The researchers have been working on major studies into poverty alleviation and inequality for years. Last year, they and their colleague Michael Kremer won a Nobel Prize for their work, which is now more topical than ever.
No work, no income, no food
It International Monetary Fund expected that before the end of this year, 230 million people will be starving. That is an increase of more than 80 percent compared to the situation before the pandemic.
Tens of millions of people have lost their jobs due to strict lockdown measures. And in many countries, no work, no income. Researchers Duflo and Banerjee argue that drastic measures are needed quickly to turn the tide.
The researchers argue for a kind of Marshall Plan, like the one the United States set up after World War II. “You have to act quickly and in a big way,” Banerjee says. “Then the US helped European countries – including the Netherlands – to become independent again. Ultimately, that is in everyone’s interest.”
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What does it say about developed countries if we cannot show solidarity even now?
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Duflo hopes for a combination of health care and economic aid. “We must prevent this pandemic, the act of god, becomes a self-reinforcing crisis. Because if the poor can’t eat, they can’t buy from others. Moreover, what does it say about us as developed countries if we cannot show solidarity now, “asks Duflo. She looks to the EU for help.
EU is busy with itself
But the European Union is currently mainly concerned with itself, sees Brussels correspondent Sander van Hoorn. “We have recently seen that moving money from the richer parts of the EU to the poorer parts is already a sensitive issue,” he says.
Van Hoorn sees a possible exception in supporting African countries. “But that is not so much solidarity from richer countries, but fear of migration waves. The idea is that by helping those countries you prevent people from getting on boats to Europe.”
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The Nobel laureates. From left to right: Michael Kremer, Esther Duflo, Abhijit Banerjee
ANP
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For the time being, solidarity with the poorest countries is not on the EU’s agenda, Van Hoorn predicts. “Even after the call from these economists, I don’t see it appear anytime soon.” On another point, that of vaccines, the EU does play a role. Commission President Ursula von der Leyen has raised money with the United Nations to produce and distribute a vaccine worldwide.
“Whether that is altruism of the EU? Maybe a little”, is Van Hoorn’s analysis. It is also well understood self-interest. Only if you fight Covid-19 worldwide can you master it in the EU. The EU is terribly shocked by the shutdown of production lines worldwide. Factories across the EU are at a standstill as raw materials of factories elsewhere do not arrive due to an outbreak “, says Van Hoorn.
Do the poorest get a vaccine?
Economist Banerjee is concerned about the vaccine spread. “There is a real risk that the very poorest will not have access to vaccines. Funding must be provided for that,” he says. Duflo adds that the United States is failing on the world stage. “The EU can now take the lead on this point.
It is simply something that has to be done, Banerjee thinks. “It seems unacceptable to me that the poor will continue to receive Covid-19 and the rich will not. Some will also come back to European companies that sell the vaccine. But above all, the pandemic is nobody’s fault, nobody can do anything about it. Then it is easy to generate generosity. to justify.”
Watch the conversation below News hour argued with economists Duflo and Banerjee.
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Corona crisis leads to more poverty, Nobel laureates in the economy call for solidarity
