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The Financial Express

Integrated international approach needed to contain Covid fallout  

Wasi Ahmed   | Published: May 12, 2020 22:56:48


Integrated international approach needed to contain Covid fallout   

The shock is no doubt the most for less developed and poorer countries. International organisations and development partners, who work with these countries and are familiar with their economic infrastructure and sources of earnings from export, manufacturing, workers' remittance and scores of informal businesses, have already made grim forecasts of the Covid-19 fallout.

The outbreak of the virus and consequent lockdowns in most of these countries threaten to disproportionately devastate their economies as they gear up to tackle a health crisis with extremely limited resources, says the United Nations Development Programme (UNDP). The socio-economic impact on poor and developing countries will take years to recover from, the UNDP said in a report released last week, stressing that income losses in these countries are forecast to exceed $220bn. Nearly half of all jobs in Africa could be lost, it also warned. "For vast swathes of the globe, the pandemic will leave deep, deep scars," a senior UNDP official Achim Steiner said adding, "Without support from the international community, we risk a massive reversal of gains made over the last two decades and an entire generation lost."

The loss in income could have severe repercussions for societies, including in areas such as education, human rights and food security. The UNDP also warned that hospitals and clinics in developing countries are likely to be overrun and under-resourced, further risking the spread of the Covid-19 virus. Up to 75 per cent of people in least-developed countries lack access to soap and water. 

Governments worldwide have ordered businesses to shutter and billions of people to stay home in an effort to fight coronavirus. This, besides seriously affecting organised business sectors like export manufacturing has brought extreme hardship for low income groups a majority of whom depend on one or another form of informal businesses. While efforts to ride out in the form of stimulus and disaster relief by governments are draining out their scanty resources, required health care measures to contain the pandemic is fraught with severe limitations.  "COVID-19 can quickly overwhelm the fragile and overstretched health systems of many countries. So far, we have seen epidemic in countries said to have advanced health systems but even they have struggled to cope," Mandeep Dhaliwal, Director of UNDP's HIV, Health and Development Group, told Al Jazeera. "We must urgently focus on effective COVID-19 responses in developing and emerging economies, especially to reach those most vulnerable like slum dwellers, prisoners, migrants and refugees," he added.

The World Bank (WB) and the International Monetary Fund (IMF) stressed the need to provide debt relief to developing countries. In addition to activating emergency programmes that offer grants and loans, the two financial institutions called on official bilateral creditors to provide immediate debt relief to the world's poorest nations. "Poorer countries will take the hardest hit, especially ones that were already heavily indebted before the crisis," the World Bank's President David Malpass told the International Monetary and Financial Committee, the steering committee of the IMF. He also remarked that many countries will need debt relief. This is the only way they can concentrate on new resources to fight the pandemic and its economic and social consequences. The WB President said the bank had emergency operations underway in 60 countries and its board was considering the first 25 projects valued at nearly $2bn under a $14bn fast-track facility to help fund immediate healthcare needs.

Meanwhile, the UNDP says it is supporting health systems in China, Ukraine, Iran, Eritrea, Nigeria, and Vietnam, among others. It estimates it will need a minimum of $500m to support 100 countries, where the long-term effect will be particularly felt by the most vulnerable and marginalised groups.

Research published by UNU-WIDER warns that the economic fallout from the global pandemic could increase global poverty by as much as half a billion people, or 8.0 per cent of the total human population. This would be the first time that poverty has increased globally in thirty years, since 1990.

The authors of the UNU-WIDER study -- Andy Sumner and Eduardo Ortiz-Juarez of King's College London and Chris Hoy from Australian National University -- find that a setback of this size would reverse a decade of global progress on poverty reduction. This study shows that the achievement of the 2030 Agenda, and in particular, the SDGs on no poverty and zero hunger, is under considerable threat. The need of the hour is to bring together development agencies, national governments, civil society and the private sector in a global effort to protect the livelihoods and lives of the poorest of the poor. Findings of the research are being cited by Oxfam International in its call to world leaders to implement "an Economic Rescue Plan for All, to keep poor countries and poor communities afloat." Oxfam is calling on world leaders to agree on an Emergency Rescue Package of 2.5 trillion USD paid for through the immediate cancellation or postponement of 1.0 trillion in debt repayments, a 1.0 trillion increase in IMF Special Drawing Rights (international financial reserves), and an additional 500 billion in aid.

It is understandable that the development agencies have their own plans. However, the important thing in this calamitous time is to know how best to coordinate with each other in an attempt to integrate their plans in the affected regions on the one hand and in hard-hit economic sectors of many poor countries on the other.

 

wasiahmed.bd@gmail.com

 

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