Millions Had Risen Out of Poverty. Coronavirus Is Pulling Them Back.

Experts say that for the first time since 1998, global poverty will increase. At least a half a billion people could slip into destitution by the end of the year.

Migrant workers who are stuck in Mumbai because of a lockdown line up for food in the sprawling slum of Dharavi on Monday.Credit...Atul Loke for The New York Times

By Maria Abi-Habib-April 30, 2020

Like thousands of women across South Asia, Shahida Khatun dropped out of school to work in the garment factories that were springing up in Bangladesh’s cities, hoping to pull her family out of poverty.

At 12 years old, she clocked in for long shifts in an overcrowded factory, her fingers sore from stitching pants and shirts destined for clothing stores in the United States and Europe. But the $30 she made each month ensured that for the first time, her family had regular meals and could buy previously unheard-of luxuries like chicken and milk.

A decade later, Ms. Khatun more than tripled her wage, earning enough to send back to her village and provide a better life for her 17-month-old son than she ever had.

But when Ms. Khatun and her husband were laid off in March as Bangladesh, like much of the world, went under lockdown because of the coronavirus pandemic, she dropped back to dark places she hoped she had left behind.

The familiar pangs of hunger now fill her days, and she runs into debt with a local grocer to manage even one scant meal of roti and mashed potato a day.

“The garment factory helped me and my family to get out of poverty. But the coronavirus has pushed me back in,” Ms. Khatun, now 22, said in a recent interview.

The gains the world was making in fighting poverty — largely because women like Ms. Khatun were entering the work force — are now at grave risk.

ImageGarment workers in Dhaka, Bangladesh, on Monday as the authorities allowed some garment factories to reopen.Credit...Mohammad Ponir Hossain/Reuters

The World Bank says that for the first time since 1998, global poverty rates will rise. By the end of the year, 8 percent of the world’s population — half a billion people — could be pushed into destitution, largely because of the wave of unemployment brought by virus lockdowns, the United Nations estimates.

While everyone will suffer, the developing world will be hardest hit. The World Bank estimates that sub-Saharan Africa will see its first recession in 25 years, with nearly half of all jobs lost across the continent. South Asia will likely experience its worst economic performance in 40 years.

Most at risk are people working in the informal sector, which employs two billion people who have no access to benefits like unemployment assistance or health care. In Bangladesh, one million garment workers like Ms. Khatun — 7 percent of the country’s work force, and many of them informally employed — lost their jobs because of the lockdown.

The financial shock waves could linger even after the virus is gone, experts warn. Countries like Bangladesh, which spent heavily on programs to improve education and provide health care, which help lift families out of destitution, may now be too cash-strapped to fund them.

“These stories, of women entering the workplace and bringing their families out of poverty, of programs lifting the trajectories of families, those stories will be easy to destroy,” said Abhijit Banerjee, a professor at the Massachusetts Institute of Technology and a winner of the 2019 Nobel Prize for economics.

Image Homeless people lining up at a food distribution center in Bangkok this month.  Credit...Adam Dean for The New York Times

“There will be groups of people who climbed up the ladder and will now fall back,” he added. “There were so many fragile existences, families barely stitching together an existence. They will fall into poverty, and they may not come out of it.”

The gains now at risk are a stark reminder of global inequality and how much more there is to be done. In 1990, 36 percent of the world’s population, or 1.9 billion people, lived on less than $1.90 a day. By 2016, that number had dropped to 734 million people, or 10 percent of the world’s population, largely because of progress in South Asia and China.

Some of the biggest gains were made in India, where 210 million people were lifted out of poverty from 2006 to 2016, according to the U.N. Since 2000, Bangladesh lifted 33 million people — 10 percent of its population — out of poverty while funding programs that provided education to girls, increased life expectancy and improved literacy. Famines that once plagued South Asia are now vanishingly rare, the population less susceptible to disease and starvation.

But that progress may be reversed, experts worry, and funding for anti-poverty programs may be cut as governments struggle with stagnant growth rates or economic contractions as the world heads for a recession.

Image The San Roque slum in Manila, where many of the men are day laborers who work at construction sites in the ever-expanding metropolis and are unable to find work. Credit...Jes Aznar for The New York Times

In India, millions of migrant laborers were left unemployed and homeless overnight after the government there announced a lockdown. In parts of Africa, millions may go hungry after losing their jobs while lockdowns have snarled food aid distribution networks. In Mexico and the Philippines, remittances families relied on have dried up as primary breadwinners lose their jobs and can no longer send money home.

“The tragedy is, it’s cyclical,” said Natalia Linos, executive director of Harvard University’s François-Xavier Bagnoud Center for Health and Human Rights. “Poverty is a huge driver of disease, and illness is one of the big shocks that drive families into poverty and keep them there.”

A U.N. resolution committed to eliminating poverty and hunger and providing access to education for all by 2030 may now be a pipe dream.

More than 90 countries have asked the International Monetary Fund for assistance. But with all countries hurting, well-to-do capitals may be too strapped to provide the large amounts of aid the developing world needs.

To avoid having large chunks of their population slipping into devastation, countries need to be spending more, Mr. Banerjee said. In times of crises, like World War II, economies have rebounded because governments have stepped in with big spending packages like the Marshall Plan.

But so far the economic stimulus packages and support to those rendered unemployed because of the pandemic have been weak or nonexistent in much of the developing world.

Image Groceries being delivered ahead of Ramadan in Islamabad, Pakistan, by Rizq, a charity organization.Credit...Saiyna Bashir for The New York Times

While the United States has committed nearly $3 trillion in economic stimulus packages to help the poor and small businesses, India will spend $22.5 billion to support its population of 1.3 billion, four times the size of America’s. Pakistan, the world’s fifth largest country, has committed about $7.5 billion, far less than Japan’s $990 billion stimulus package.

In Bangladesh this week, the toll on the garment industry became so bleak that several hundred factories decided to reopen — a move almost certain to worsen the country’s coronavirus caseload.

The owner of the garment factory where Ms. Khatun worked, however, has told employees that even after the pandemic, he may no longer have work for them. The demand for clothing in Western countries will drop, he told Ms. Khatun and her colleagues, as people have less to spend.

Ms. Khatun worries her family will be evicted from the small, 10-foot-square room they rent with a bathroom and kitchen they share with neighbors. If they are thrown out, they will return to the village she left a decade ago as a child determined to to improve her lot in life.

“My only dream was to ensure a proper education for my son,” she said, recalling how she was forced to drop out of school to work. “I wanted people to say, ‘Look, although his mother worked for a garment factory, her son is well educated and has a good job.’

“That dream is now going to disappear.”

Julfikar Ali Manik contributed reporting.

Image Workers preparing a makeshift isolation center at a convention center for treatment of coronavirus patients in Dhaka, Bangladesh, on Tuesday.Credit...Monirul Alam/EPA, via Shutterstock