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Gold coins issued by the US Mint. (Reuters/Yonhap News)

The economic shock caused by COVID-19 is expected to drive as many as 100 million people around the world into extreme poverty this year, while about 280,000 of the world’s richest people have amassed close to US$7 trillion of wealth during the five months since May, a new report finds. This is the first time the world has seen extreme poverty rise in 31 years, since 1989, dramatically contrasting the outcomes of plutocrats and the poor.

On Oct. 7, the World Bank released “Poverty and Shared Prosperity 2020,” a report addressing the reality of poverty around the world. The report estimates that the COVID-19 pandemic will push between 88 and 114 million people into poverty around the world. A global economic growth rate of -5% would cause 88 million people to become extremely impoverished (defined as getting by on less than US$1.90 a day), while a rate of -8% would have that effect on 114 million people.

Prior to the COVID-19 outbreak, the World Bank had estimated that there would be 615 million people in extreme poverty by the end of 2020. But the pandemic has caused the bank to revise its estimate to 729-730 million.

The percentage of the global population in extreme poverty has continued to fall after rising from 33.6% in 1988 to 36.8% in 1989, but now the World Bank predicts the rate will rise again. The percentage of the global population in extreme poverty this year is predicted to be 9.1-9.4%, up 0.7-1 points from last year.

Unlike the poor, the world’s wealthy have nearly recovered from the COVID-19 shock, another report finds.

The “Covid-19 Wealth Impact: World Ultra Wealth Report 2020,” published on Oct. 7 by Wealth-X, A New York-based organization specializing in analyzing wealth, said that the population of ultra-high net worth individuals (those with US$30 million or more) increased from 238,060 at the end of March to 280,670 at the end of August. That was about 10,000 fewer than the tally of 290,720 at the end of last year. Over the past five months, the world’s wealthiest individuals’ have seen their wealth grow by US$6.83 trillion. Nearly half of that amount, or US$3.29 trillion, was pocketed by rich Americans and Canadians.

Divided by country, the number of wealthy has risen by 2.3-4.3% in Denmark, China, Taiwan, Russia, and South Korea, relative to the end of 2019, while their net worth grew by 2.7-4.3%. In the US, both the number of wealthy and their wealth has almost completely returned to levels at the end of last year. The wealthy have been hardest hit by COVID-19 in the UK, Spain, Austria, France, and Israel, where the number of wealthy and their net wealth has fallen by around 9-20%.

The report noted that while wealthy individuals were impacted by the COVID-19 shock, their wealth quickly rebounded as stock prices shot back up after bottoming out in late March. The region where the wealthy have recovered the most is North America, according to the report.

By Shin Gi-sub, senior staff writer

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