By Eric Peters,
Tens of millions of people have fallen into poverty as a result of a global surge in the prices of food and energy, according to a U.N. report released Thursday.
The U.N. Development Program estimates that an additional 51.6 million people are now living in poverty or below the $1.90-a-day benchmark as a result of global inflation -- an increase from 8.3 percent to 9 percent of the world's population.
The additional number of people falling beneath the $3.20-per-day level has reached nearly 20 million, leaving the net cumulative figure at 71.5 million people, the report said.
"This cost-of-living crisis is tipping millions of people into poverty and even starvation at breathtaking speed and with that, the threat of increased social unrest grows by the day," said UNDP Administrator Achim Steiner in a statement.
The report is based on an analysis of estimated household income in 159 countries and price rises from late October last year through late April.
Between half and two-thirds of the increase in the price of corn and energy occurred in the months since the start of Russia's invasion of Ukraine, according to the report. For wheat and the main types of fertilizers, the number ranges from 30 to 40 percent.
Russia and Ukraine together account for almost a quarter of global wheat exports. Before the outbreak of the war, Russia was the world's largest exporter of natural gas and second biggest exporter of crude oil.
Referring to the war in Ukraine that began in late February, Steiner said in a press conference that "The impact on poverty rates is drastically faster than the actual shock of the COVID-19 pandemic."
The report warned of the tradeoffs of certain policies commonly being enacted by developing countries to combat inflation-related impacts such as blanket subsidies or tax cuts.
"They offer some relief as an immediate Band-Aid, but risk causing worse injury over time," said George Gray Molina, the UNDP's head of strategic policy engagement, adding that food and fossil fuel subsidies tend to disproportionately benefit wealthier people and may further exacerbate global climate change.
In the short term, cash transfers such as a temporary basic income "more than mitigates" inflation-induced global poverty increases below the international poverty line, said Molina.
The report comes amid shrinking forecasts for global economic growth. The International Monetary Fund in April said it expects 3.6 percent growth for the global economy in 2022, down from the previous forecast of 4.4 percent.
For 15 years, until the COVID crisis, it was the economic growth in emerging and developing economies that sustained global economic growth, Molina said.
"With COVID, we saw divergence between the richest economies and the poorest economies of the world. And what we see right now is a troubling trend in which developing and emerging economies cannot get back on to the economic growth trajectory that they had in the past," he said.
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