There are fears the economic shock of the coronavirus pandemic could put half-a-billion people into poverty, erasing decades' worth of progress.
A new report from charity Oxfam, put together by researchers at King's College London and the Australian National University, says more than half the world's population will be living in poverty once the pandemic has run its course, unless drastic measures are taken to prevent it - such as cancelling sovereign debts and implementing stiff taxes on the wealthy.
"Families across the world and here in New Zealand are feeling stressed and scared," said Oxfam NZ executive director Rachael Le Mesurier. "What this coronavirus pandemic shows is how poverty and crisis compound each other. When you're living in a refugee camp or squatter settlement in a poor country, you live hand-to-mouth. Your government can't afford to provide social protection measures so when you lose your job, you're on your own."
About 9,2000 people have lost their lives to COVID-19 since it emerged in central China at the end of last year. Governments around the world have shut businesses and schools in an attempt to stop or slow the virus' spread, with the tradeoff being massive economic damage.
The report notes that while the "virus affects us all, even princes and Prime Ministers" - referring to the UK's Prince Charles and Boris Johnson - the damaging economic effects are going to be largely borne by the poor.
"Those who are better off are more likely to be in secure formal employment, to enjoy effective labour protections like sick pay, to have savings and to be able to quarantine themselves in a secure and connected home while continuing to work and educate their children remotely," the report says.
The research estimates 2 billion people around the world work in jobs where there's no such thing as sick pay, particularly in low-income countries. Many of these are women, who also make up the bulk of workers in healthcare, who are exposed to the deadly virus on a daily basis as part of their work.
"The devastating economic fallout of the pandemic is being felt across the globe. But for poor people in poor countries who are already struggling to survive there are almost no safety nets to stop them falling into poverty," said Le Mesurier.
Oxfam's analysis says a $2.5 trillion economic package is needed to "prevent global economic collapse".
"Bailouts for banks and corporations were paid for by ordinary people as jobs were lost, wages flatlined and essential services such as healthcare cut to the bone," said Oxfam international interim executive director Jose Maria Vera. "Economic stimulus packages must support ordinary workers and small businesses, and bailouts for big corporations must be conditional on action to build fairer, more sustainable economies."
In the wake of the global financial crisis, many governments poured money into troubled banks and adopted austerity measures. Oxfam says this can't happen again.
Instead, it's calling for:
- prioritising "a massive increase in social protection benefits", including cash grants - New Zealand has done this, with more than 1 million employees' incomes currently being topped up or replaced by the Government's wage subsidy;
- priority for bailouts going to small businesses and the self-employed. "Bailouts of big corporations should be conditional on measures to uphold the interests of workers, farmers and taxpayers and to build a sustainable future";
- the suspension of all debt payments from developing countries for at least a year, or debt cancellation where needed;
- massive boosts in international aid;
- 'solidarity' taxes on "extraordinary profits, the wealthiest individuals, speculative financial products and activities that have a negative impact on the environment... Billionaires' fortunes doubled in the 10 years after the financial crisis while real wages barely increased."
Failure to undertake these measures would see global poverty rise for the first time in 30 years, the Oxfam report said.
"Such an increase could represent a reversal of approximately a decade in the world's progress on reducing poverty. In some regions the adverse impacts could result in poverty levels similar to those last recorded 30 years ago."
While there have been calls to lift the lockdown early amid fears the economic damage will be too great, health experts believe a short, total lockdown - if it's successful in eliminating the virus from our shores - would do less economic damage than letting the virus run through the population over several months or even years.
"Many countries are saying there's a tradeoff between public health and the health of the economy. But actually, I think the way the pandemic's going, the two actually go together very well," University of Otago epidemiologist Michael Baker told The AM Show on Thursday.
"If you can eliminate it, you can come out the other side in a moderate period of time - after one or two months, or maybe a bit longer. China is showing that...
"The alternative, what we're seeing in most Western countries, is a very prolonged, difficult period where you initially try and dampen it down - mitigation - and then most countries have now gone into suppression mode, where you have lockdowns of varying levels of intensity that will have to go on for months while they wait for a vaccine."
Unemployment figures in New Zealand March were up 15 percent on a year earlier, Parliament's Epidemic Response Committee was told on Thursday morning, The Spinoff reports. Total benefit numbers are up about 8 percent.