The global cost-of-living crisis is forcing an extra 71 million people into severe poverty in the world’s poorest nations, according to a new research released on Thursday by the United Nations Development Programme (UNDP).

According to Achim Steiner, UNDP Administrator, a jump in critical commodity prices this year is already hammering areas of Sub-Saharan Africa, the Balkans, Asia, and other developing nations.

The UNDP advocated for targeted intervention. It was looking for direct cash transfers to the most vulnerable people and wanted wealthier countries to expand and broaden the Debt Service Suspension Initiative (DSSI) they established to assist impoverished countries during the COVID-19 epidemic.

“This cost-of-living crisis is tipping millions of people into poverty and even starvation at breathtaking speed,” Steiner told Reuters. “With that, the threat of increased social unrest grows by the day.”

Institutions such as the United Nations, World Bank, and International Monetary Fund have a variety of ‘poverty lines,’ one of which is for the poorest nations, where people live on $1.90 or less per day. Lower middle-income economies pay $3.20 per day, whereas higher middle-income nations pay $5.50 per day.

“We project that the current cost-of-living crisis may have pushed over 51 million more people into extreme poverty at $1.90 a day, and an additional 20 million at $3.20 a day,” the research added, bringing the world total to little over 1.7 billion people.

It went on to say that targeted cash transfers by governments would be more “equitable and cost-effective” than blanket subsidies on items like electricity and food costs, which benefit the wealthier segments of society more.

The previous two years of the epidemic have also shown that these cash-strapped nations will need global assistance to finance these initiatives.

They may do so, according to Molina, by extending the G20-led Debt Service Suspension Initiative (DSSI) by two years and expanding it to at least 85 nations, up from 73 already eligible.

Source: Reuters

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