From Pandemic to Impoverishment -1-

En son güncellendiği tarih: May 1


World in Quarantine
World in Quarantine

It is obvious that the virus has reached the entire world. However, in many developing and newly industrializing countries, the number of coronavirus cases continues to increase. Almost everywhere in the world, measures are being taken against coronavirus. The restrictions and prohibitions put into effect due to the Coronavirus Pandemic caused depletion of revenues of some country administrations that increased public expenditures in an effort to protect their employment and living standards. Among these countries, the most damaged segment is the poor and developing countries. The Coronavirus outbreak continues to have an impact in developing countries. Countries with limited health systems and financial conditions are going through a much more challenging period than others. Developing countries are in danger of a deep and long-term recession due to the coronavirus epidemic that caused humanity to lock themselves in houses and waft the global economy into the unprecedented recession. The fragile financial conditions of developing countries, problematic healthcare infrastructures, and dependence on commodities such as oil make them weaker than Western countries in the face of the epidemic.



Many developing countries in Asia, Africa, and Latin America have declared curfews to control the coronavirus. The local economies of these countries came to a standstill, the demand for commodities, including oil, has declined and the value of their currencies has suffered a major blow.

South Africa, the most industrialized country in Africa, has entered the pandemic process weakly. The economy shrank by 7 percent in 2020 due to the coronavirus pandemic, recording the harshest contraction in 100 years. The country's economy is in recession, and almost a third of its workforce is unemployed.

India, whose financial situation has deteriorated in the last few years, has similarly slowed economic growth and record unemployment. India, which has a 1.3 billion population, had to enter the crisis process in a weak situation. According to data from the Ministry of Statistics of India, the economy, which grew by 3.1 percent in the first three months of 2020, shrank by 23.9 percent when Covid-19 measures were implemented. This was the first contraction the Indian economy has recorded in the last 40 years.

Covid - 19 and economy

The fact that foreign investors turn their backs on markets in developing countries has also been another reason that pushed these countries to economic stagnation. According to data from the Institute of International Finance, the investment value has more than $80 billion left 20 developing economies, including Turkey, India, China, and South Africa, in March 2020. The massive withdrawal of capital from these countries has increased the risk that fragile economies will not be able to pay off their debts. Higher borrowing costs have damage countries such as South Africa in particular and Turkey, which in recent years has relied on foreign borrowing to fund a new airport in Istanbul.

As a result, developing and newly industrializing countries hope that the measures they take against the coronavirus pandemic will be sufficient. While many of these countries are no longer suffering from recession, the problems of unemployment and poverty are still being tackled. Of course, health is of primary importance nowadays as the virus continues to spread rapidly all over the world. However, the question of to what extent people's health can be protected in these countries, where the economy has suffered greatly has still not found an answer.


Sources

1. blogs.worldbank.org/opendata/updated-estimates-impact-covid-19-global-poverty

2. odi.org/blogs/16754-pandemics-poverty-implications-coronavirus-furthest-behind

3. theguardian.com/global-development/2021/fhttps://www.odi.org/blogs/16754-pandemics-poverty-implications-coronavirus-furthest-behind

4. devex.com/news/covid-19-is-changing-the-face-of-extreme-poverty-98264

5. news.un.org/en/story/2020/04/1061322

6. bbc.com/news/business-51706225

7. ft.com/coronavirus-economic-impact

8. mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-coronavirus-effect-on-global-economic-sentiment

9. iif.com/COVID-19