The COVID-19 Diaries – Day 18 – The ‚unknown‘ awaits emerging markets
The COVID-19 pandemic has yet to hit most emerging market economies to the extent it has affected the European Union and the United States.
However, it is anticipated that the outbreak will significantly threaten already impoverished countries such as Africa, India, Brazil and Argentina as they fight a global health crisis with extremely limited resources. The hit on poor and developing countries will take several years to recover from among others suffering from slums, overcrowded refugee camps and prisons. It is expected that nearly income losses could surge to $220bn.
Economic and health implications are especially worse for those countries who are in the midst of some kind of economic or political conflicts. For example in the case of Venezuela, an ongoing conflict between the opposition and the government already made a huge gap in health services and where the president has been charged with narco-trafficking crimes. This means Venezuela is battling a „crisis on top of a crisis“.
Following many worldwide leaders‘ decisions, a total economic lockdown might seem like a good idea as already introduced in India. However, unlike in Europe or in the U.S., people in emerging countries do not have direct access to food, soap or even water. Many of these countries are severely dependent on humanitarian assistance (i.e. food, hygienic) which aid will not be able to reach them due to measures set in place to help fight the spread of the virus.
The question is not whether the pandemic would have severe economic impact on these countries but rather how bad it will get.
As once said by Wayne Gretzky (a former Canadian hockey player – „Skate to where the pathogen is going and not to where it has been“. Translating this to the COVID-19 pandemic, developed countries must also try to find solutions to the ongoing public health and economic issues in emerging markets while battling their own fights against the virus.
It is undeniable that reversing the coronavirus spread in both Europe, U.S. and China has the utmost focus from all leaders. However, the main question is, do developed countries have the resources to battle their own and other countries‘ fights against the virus at the same time?
Many agree including the World Bank (WB) and the International Monetary Fund (IMF) that the only way emerging countries might be able to survive the pandemic and focus the received resources and financial assistance on minimizing the impact is to provide debt relief to the poorest nations.
Certainly, the COVID pandemic is the biggest test for international crisis management measures and systems that have never been tested before. The consequences and the damages for emerging markets will most likely be deeper, will last longer to recover from and will result in further political instability and potentially also in outbreaks of violence.
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