For fast-growing developing and emerging economies, the coronavirus is not only a major roadblock on their growth path, but actually threatens to push them farther away from joining the club of industrialized nations. China's economy actually shrank last quarter, the first time this has happened since they started keeping records in 1992. Relatively poor but high-growth countries like India, Kenya, El Salvador and Nigeria have locked down to flatten the curve like the US and European economies. Such shut-downs always trade-off beneficial public health outcomes for worse economic ones. But in developing nations, the negative economic impacts weigh down more heavily on the millions of more poor households, who live day-to-day, with no savings or safety net.
There may be certain factors working in their favor. Developing countries tend to have rural populations where the virus is less prevalent, experience with managing viruses (like Ebola in Nigeria and HIV/AIDS in Uganda), and larger proportions of younger people who appear to have lower death rates from the virus. There is also some preliminary work to suggest that hotter and less humid climates also tend to slow down the pandemic.
Despite these slim silver linings, the harsh reality remains that developing countries have far fewer resources overall to fight the spread of COVID-19. Fewer doctors per capita, fewer ventilators, less personal protective equipment, less hospital capacity. Many developing markets also rely heavily on industries like tourism and travel which have been debilitated. In terms of response, governments have smaller budgets, and thus less ability to provide massive fiscal stimulus.
Decades of institutional reforms, structural changes, and the resulting economic growth has pulled billions out of poverty. There were massive strides in health and education, reducing economic inequalities across nations. The next few months could potentially undo some of this convergence.
There may be certain factors working in their favor. Developing countries tend to have rural populations where the virus is less prevalent, experience with managing viruses (like Ebola in Nigeria and HIV/AIDS in Uganda), and larger proportions of younger people who appear to have lower death rates from the virus. There is also some preliminary work to suggest that hotter and less humid climates also tend to slow down the pandemic.
Despite these slim silver linings, the harsh reality remains that developing countries have far fewer resources overall to fight the spread of COVID-19. Fewer doctors per capita, fewer ventilators, less personal protective equipment, less hospital capacity. Many developing markets also rely heavily on industries like tourism and travel which have been debilitated. In terms of response, governments have smaller budgets, and thus less ability to provide massive fiscal stimulus.
Decades of institutional reforms, structural changes, and the resulting economic growth has pulled billions out of poverty. There were massive strides in health and education, reducing economic inequalities across nations. The next few months could potentially undo some of this convergence.
