Grandstand. The Covid-19 pandemic and the containment measures adopted by a large number of countries are already raising concerns about the expected negative effects on economies, possible financial crises and the slowdown in globalization. These are concerns – legitimate – of rich countries. Because what this health crisis is also exposing is the terrible dilemma that poor countries on the planet will soon face.
Health and economic shocks
For those who have adopted them, total containment measures will necessarily be very short, and therefore ineffective. Indeed, outside the crisis, an overwhelming majority of people are already living in difficult economic situations. About 1.3 billion people worldwide are poor, according to a report by the United Nations Development Program (UNDP). Of these, 50% live in South Asia, and 30% in Africa. In these countries, youth unemployment rates are at record levels, the industrial and processing sectors do not perform as well as those of industrialized countries, agricultural production is regularly hit hard by shocks climatic conditions (locust invasions, droughts and floods).
Several hundred million people are undernourished in these countries, including in Central and Latin America. The current drop in oil prices adds to the health shock an economic shock for the oil and gas exporting countries. Finally, the slowdown in demand in industrialized countries will penalize economies already very dependent on the outside for their tourism or their exports.
While a controversy is already emerging in Europe on the optimal strategy to adopt (should the movement of populations be restricted and to what extent?), The poor countries of Latin America, Africa and Asia will likely not have this choice. Because economic conditions, already difficult outside the crisis, put governments in a dilemma. On the one hand, that of confinement to slow the spread of the virus, and the at least partial cessation of economic activities, aggravating an already difficult situation in normal times. The sacrifice to save to save lives would be an aggravation of poverty. On the other, limit the negative effects on their economies of the slowdown in the world economy, by betting on the natural immunity of populations in contact with the virus. The sacrifice would then be to accept a possibly very high death toll.