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COVID-19 Imposing Economic Hardships for Citizens

The United Nations said 77 million people in the world fell to extreme poverty last year due to the prolonged COVID-19, and many developing countries are not recovering due to the burden of debt repayment.


Citing a report prepared by the United Nations Economic and Social Administration, the Associated Press reported on the 12th (local time) that the number of poor people with a daily living cost of less than $1.9 increased from 812 million in 2019 to 889 million last year.


The report pointed out that poor countries are spending billions of dollars on debt payments and are unable to spend on education, healthcare improvements, environmental protection, and reducing inequality due to high borrowing costs.


Poor developing countries, on average, pay 14 percent of their income as interest on debt, and many of them have no choice but to cut budgets such as education, infrastructure and pandemic-induced capital spending, it said. Rich developed countries pay only 3.5% of their income with interest.


In addition, the Ukraine war was expected to lead to rising energy and raw material prices, causing supply chain collapse, rising inflation, slowing growth, and increasing volatility in financial markets.


"The Ukrainian war is shocking the world to the complex crisis caused by climate attacks on the natural world and the prolonged COVID-19 pandemic," U.N. Deputy Secretary-General Amina Mohamed said. "Human efforts are facing an important moment."


"It would be a tragedy if rich donors increased military spending, cut aid to developing countries, and cut efforts to resolve the climate crisis," he said, urging countries around the world to act responsibly to free hundreds of millions of people from hunger and poverty.


The report recommended accelerating debt relief in developing countries, expanding qualifications, including financial markets for heavily indebted middle-income countries, revising the international tax system to address inequality in access to COVID-19 vaccines and medicines, and accelerating sustainable energy investment.


Writer: Ellie Kim


(Picture form Unsplash)

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