Photo: Stephen Chernin/Getty Images
Yesterday, we had good news to share about the link between global value chains and poverty reduction. However, the World Bank’s World Development Report 2020 offers a grim prognosis for world trade and poverty reduction should global trade conflict — in particular, the conflict between the United States and China — worsen.
“If the trade conflict worsens and leads to a slump in investor confidence, effects on global growth and poverty could be significant — up to 30.7 million people could be pushed into poverty, measured as an income level of less than $5.50 a day, and global income could fall as much as $1.4 trillion in a worst-case scenario,” wrote the report’s authors. Moreover, “low- and middle-income countries other than China would bear roughly half of the global income loss.”