The military escalation in the Middle East could push more than 30 million people into poverty worldwide, according to the latest projections from the United Nations Development Program (UNDP), given the global impact of the conflict.
According to this UN body in a statement, the crisis in the region is generating “economic chain effects that fall especially hard on the most vulnerable populations”, especially in countries with less fiscal capacity to absorb the increase in energy and food prices.
The organization’s latest analysis estimates various impact scenarios, from short-lived disruptions to prolonged shocks of up to eight months. In the most adverse scenario, up to 32 million people could fall into poverty in 162 countries.
The UNDP adds that, although the most intense effects are concentrated in countries directly involved in the conflict and in those dependent on importing energy, “significant long-term negative consequences are also expected in low- and middle-income economies”, including in remote regions such as sub-Saharan Africa, Asia and small island states.
According to the report, in the sixth week of the war and despite the temporary ceasefire, the impact of the conflict is moving “from an acute phase to a prolonged one”, which increases “the risk of a sustained increase in global poverty if it is prolonged.”
“War is development in reverse. A conflict can undo in weeks what countries have built for years,” says the UNDP, and emphasizes that the crisis will force many governments to have to choose between stabilizing prices or financing basic services such as health, education and employment.
“War is development in reverse. A conflict can undo in weeks what countries have built for years”
The organization also warns that countries with the lowest fiscal margin are the most exposed to tensions, which “aggravates existing inequalities and limits the response capacity of public policies.”
As mitigation measures, UNDP recommends temporary and targeted cash transfers to protect the most vulnerable households, with an estimated cost of up to $6 billion in the most extreme scenario. It also proposes targeted subsidies or vouchers for basic energy consumption.
However, the agency advises against universal energy subsidies, considering that they tend to benefit higher-income households to a greater extent and are financially unsustainable.
