Developing countries face economic collapse in COVID-19 fight: UN

$220bn in lost income; nearly half of all jobs in Africa wiped out; UNDP warns of economic devastation for poor nations.

India migrant workers
Migrant workers and their families, such as these in India, are among the most vulnerable to the economic consequences of widespread lockdowns by governments as they try to curb the spread of the coronavirus [Adnan Abidi/Reuters]

The coronavirus outbreak threatens to disproportionately devastate the economies of already impoverished countries as they gear up to tackle a health crisis with extremely limited resources, the United Nations Development Programme (UNDP) has warned.

The socioeconomic hit on poor and developing countries will take years to recover from, UNDP said in a report released on Monday, stressing that income losses in those 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,” UNDP Administrator Achim Steiner, said. “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. UNDP also warned that hospitals and clinics in developing countries are likely to be overrun and underresourced, further risking the spread of the COVID-19 virus. Up to 75 percent of people in least-developed countries lack access to soap and water.  

“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.”

Governments worldwide have ordered businesses to shutter and billions of people to stay home in an effort to fight coronavirus. 

Last week, India’s Prime Minister Narendra Modi issued a 21-day lockdown for the country’s 1.3 billion people. The order stranded millions of migrant workers who were forced to walk hundreds of miles to their home villages after public transport shut down. Half of the population in India lives below the poverty level. 

The urgency to act to stem the spread of COVID-19 is being felt in Africa as well. In Kenya, President Uhuru Kenyatta recently ordered sweeping measures to slow the coronavirus outbreak, which some fear will bring more economic hardship. Informal labourers account for 83.6 percent of the Kenya’s total workforce.

“There was a lot of hope generated for this decade. Now that picture is looking quite bleak,” Ahunna Eziakonwa, Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, told Al Jazeera.

“The devastation is going to be unprecedented particularly in Africa where countries have survived Ebola and the financial crisis but nothing on the scale of what is about to hit the continent.” 

Eziakonwa added that countries like the Democratic Republic of the Congo and Central African Republic already have existing crises including protracted conflict and millions of internally displaced persons. The DRC is still battling the Ebola outbreak. Other nations suffer from natural disasters. Tanzania has just been hit with a huge flood.  

“You have a crisis on top of a crisis. These countries and many like them have millions of people who were dependent on humanitarian assistance for survival, and now with restrictions in place to fight coronavirus, aid will not be able to reach them,” she said.  

A lockdown may seem like a good strategy to halt the spread of coronavirus but for masses of people in developing countries it is simply not an option.

“Communities do not have water and soap. They are unable to sit home and wait. There is no food, they earn their income on a daily basis,” Eziakonwa added.  

On Friday, the World Bank 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.

“Many countries will need debt relief. This is the only way they can concentrate any new resources on fighting the pandemic and its economic and social consequences,” he said, according to a text of his remarks.

Malpass said the bank had emergency operations under way 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, 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.

Source: Al Jazeera, News Agencies