COVID-19 MONUMENTAL DISASTER FOR DEVELOPING WORLD

Nothing has shaken the world in our lifetime quite as COVID-19 has, and a trail of misery has been left in its wake.

Developed countries will recover far quicker than those in the developing world, as the pandemic has impacted virtually every aspect of development. Even before the pandemic, developing countries were struggling with massive debt burdens, under-resourced health systems, challenges in internet connectivity, conflict, violence against women, and food insecurity. Some estimate that the ravages wrought on national economies and societies by COVID-19 will lead to a lost decade for many in the developing world. Before the onset of COVID-19, almost half of all low-income countries were in debt distress or at high risk of it, leaving them with severely constrained resources to draw from to assist the most vulnerable in their societies.

Support

The World Bank and the International Monetary Fund have the mandate to support nations in times of financial crisis, and with the onset of the pandemic, the institutions had made grand promises of responding robustly, and the head of the IMF had promised to tap into the organisation’s US$1 trillion lending capacity. But, despite the World Bank doubling its lending in the first half of last year, it was slow to distribute the money. This was probably as a result of the debt-relief initiative agreed to in April last year by world leaders of the G-20, who agreed to pause debt payments until the middle of this year. But the pause in debt payments exempted banks, asset managers and global financial services, making debt servicing to foreign creditors a heavy burden for years to come for developing countries reeling from the effects of the pandemic. Private creditors failed to offer debt relief, exposing their primary interest as being to get developed countries back into the business of borrowing, rather than helping them to recover economically from the pandemic. Without a serious commitment by both the international financial institutions and private creditors to offer meaningful debt relief and suspension, recovery for many poor countries will be far off.

Tourism

What has hit developing countries particularly hard is the fact that many of them rely heavily on tourism to bring in foreign currency, which they use to purchase essential goods. COVID-19 has exacerbated the challenge of food insecurity across the world. According to the UN Food and Agriculture Organisation, the pandemic may add between 83 and 132 million people to the total number of undernourished in the world. World Bank estimates are that, by next year, the pandemic could push 150 million people into extreme poverty, in the first increase in more than two decades.

In terms of meeting a number of the Sustainable Development Goals, the pandemic has been a major setback for developing countries. The value of ICTs and the internet to development has been clearly demonstrated across the globe, and that value has increased with time due to rapid improvements in technology, bandwidth, social media and cloud computing. The internet provides the underpinning platform for the growth of ICTs and for an emerging digital economy. As such, the internet has become a critical enabler of sustainable development, and plays an important role in facilitating development in agriculture, health, education and enterprise. But the pandemic has highlighted internet inequalities, and underscored the fact that digital connectivity is a necessity. For those in the developing world without internet connectivity, they have been unable to take advantage of online learning opportunities or e-commerce during lockdown, which has become the way of the future.

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