After the Coronavirus Economic Crises: Economic Struggles, Livelihoods, and Recovery.

After the Coronavirus Economic Crises: Economic Struggles, Livelihoods, and Recovery.

The COVID-19 pandemic, which was first remarked in the end of 2019 resulted in not only a health catastrophe of the world but also one of the most significant economic shocks in decades. Lockdowns and travel restrictions, as well as social distancing, were introduced by governments around the world as a way of saving lives. Although the measures helped to curb the spread of the virus, they also affected the economic activity, causing a large loss of livelihoods, rising rates of poverty, and unresolved problems of recovery until 2025 and further. This research paper examines the impact of the economic consequences of COVID-19 as it keeps affecting livelihoods, increasing poverty, and making recovery more challenging in different parts of the world.

Losses in Livelihood and Economic Contraction. The pandemic caused a sharp, drastic reduction in the activity of the economy. It is reported by international sources that global GDP has significantly declined in 2020 as businesses were closed and people have reduced consumption which is still evident today. Scholars approximate that the shrinkages of the gross domestic product were 4.8 percent in the average of low-income nations and 8.9 percent in the average of high-income nations because of the economic shock of COVID-19. This was the worst reduction in the world since the beginning of the world war, and this downfall has plunged millions of people into economic insecurity. PMC Hotel, tourism, retail, and transportation are some of the most vital industries in the world that were affected by physical presence and were especially hard hit. The SMEs that constitute the backbone of most developing economies posed an existential threat to millions of them because of the slowing in demand and the disrupted cash flow. Consequently, the incomes of workers who depended on such industries were one of the most susceptible ones, and the unemployment levels started shootings in a number of areas. Global Poverty: reversing decades of gains. Poverty in the world was on the downward trend before the pandemic. Between 1990 and 2019, the population in extreme poverty (living below US $2.15 per day) has decreased by almost 2.3 billion to approximately 8 percent of the world population. Nevertheless, the COVID-19 stopped this development in its tracks. By 2020, the population in extreme poverty had grown by an almost unprecedented 70 million people, the highest growth in global poverty in 1 year since the onset of monitoring. shorthand.worldbankgroup.org

Recent statistics indicate that in 2024 the number of people languishing in extreme poverty had reached about 685 million; on average nearly 90 million more than would have been expected were pre-pandemic trends not disrupted. The implication of this setback on such international objectives like the Sustainable Development Goal of the United Nations to end extreme poverty by 2030 is significant.

shorthand.worldbankgroup.org The informal workers who constitute half of the total world labour force were unfairly hit. The income of informal workers fell by up to 60 percent during the first month of the crisis and by up to 81 percent in certain areas putting households at even greater economic risk. desapublications.un.org Disruptions to livelihood and Declining Incomes. Restrictions due to the pandemic affected productive activities particularly in the rural communities and agricultural areas where households tend to depend on their daily activities and small scale production as their sources of subsistence income. Research indicates that effective livelihood functioning amidst susceptible rural family declined significantly, by approximately 21.8 percent on average throughout national lockdowns and approximately 40.6 percent throughout regional outbreaks. This means that about 5.4 percent of households were at a risk of going back to poverty after having just exited the poverty trap. ScienceDirect Women and uneducated workers were especially affected in most of the developing nations. These groups experienced a reduction in incomes at a higher rate, with less chances of economically recovering, worsening existing disparities. Case Study: Economic Suffocations in Pakistan (After the COVID-19). Pakistan is an example of how prior economic weaknesses and the impact of the pandemic to accelerate or regress poverty reduction. Following a prolonged period of whittling down poverty- 64.3 percent in 2001-02 to 21.9 percent in 2018-19- the prevailing state started to increase with COVID-19 and inflation and other shocks around 2020. By 2024 this national poverty level had hit about 25 reversing decades of progress. World Bank Economic pressure and recovery has been exacerbated by structural problems like a big informal sector (more than 85 percent of the jobs), lack of access to quality education, and the lack of provision of public services. An analysis by the World Bank highlights how reforms should focus towards people by making them vulnerable family families secure, increasing livelihoods opportunities, and enhancing safety nets as a way of creating resiliency to future shocks. World Bank Pakistan has also continued to experience high levels of unemployment with the youth and women experiencing acute levels of unemployment. The number of people in the low-paid, insecure employment positions is still in the millions, which presents the difference between the reported employment rates and the actual quality of jobs. Pakistan Today

Inequalities in Recovery and Future Problems. The post-pandemic economic recovery has not been uniform among countries and regions. The developed economies have tended to recover faster due to the fiscal stimulus and access to vaccines, and in numerous developing economies, the slow growth and limited fiscal space remains a major challenge to invest in social protection and employment opportunities. World bank estimates indicate that the world will grow at a moderate rate (approximately 2.7% in 2025-26), which is not high enough to bring down poverty drastically on its own. AP News Besides GDP growth, there are other problems of increasing inequality, effects of climate change, and geopolitical instability (including conflicts), all of which threaten livelihoods and economic stability across the globe. The response to the 2008-2009 economic crisis is witnessed through policy responses and the pathways towards recovery. To solve the post-COVID economic hardship, the policy should be acted on thoroughly and over an extended period of time: Social Safeguards: Enhancing cash transfer initiatives, food security, and selective subsidies to shield disadvantaged families. Provision of SMEs and Job Creation: Proving credit support, infrastructure investments, and incentives on sectors that have the capacity to create a broad-based employment. Education and Skills Development: Enhance productive and participation in the labor market through augmenting access to quality education and vocation training. Inclusive Growth Strategies: Financial inclusion policies can be used to maintain gains in poverty reduction and minimize inequality. The economic consequences of the COVID-19 on livelihood and poverty have been tremendous and sustained. Several decades of development against extreme poverty were rolled back, millions of people lost their income and employment, and the weak economies continue to be dependent on shocks. Even though in most areas, recovery is being undertaken, it is still disproportionate and millions of people are still struggling with economic insecurity. Resilient and inclusive growth will require specific policies that will assist livelihoods, vulnerable groups, and establish more robust and more equitable economic systems.