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23 Apr, 2020 13:00

A long lockdown will be catastrophic for developed nations – but a ‘biblical’ disaster for the developing world

A long lockdown will be catastrophic for developed nations – but a ‘biblical’ disaster for the developing world

The looming deep and probably long-lasting global recession caused by the shutting down of our economies will hurt us all – but it will be much, much worse for those already living on the brink of starvation.

A report by the UN World Food Program (WFP), published earlier this week, paints a depressing view of the effects of the Covid-19 pandemic. The report suggests the number of people facing severe food shortages – on the brink of starvation – could double over the next 12 months, from 130 million to 265 million. The head of the WFP, David Beasley, has described the possible famines as ‘biblical.’ Those debating lockdowns in the West should bear in mind the world’s poor before demanding that restrictions should stay in place.

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The WFP’s chief economist, Dr Arif Husain, told the media: “Covid-19 is potentially catastrophic for millions who are already hanging by a thread. It is a hammer blow for millions more who can only eat if they earn a wage. Lockdowns and global economic recession have already decimated their nest eggs. It only takes one more shock – like Covid-19 – to push them over the edge. We must collectively act now to mitigate the impact of this global catastrophe.”

We need to take some of the WFP’s claims with a little skepticism. Those who specialize in a particular area will always believe that the problems there are the most important (though food is clearly the most basic necessity). And there is always a degree of special pleading with such institutional reports, with officials trying to promote worst-case scenarios in order to grab as big a slice of budgets as possible. 

Nonetheless, there is clearly a very big problem here. The disease itself will cause substantial loss of life and may make a lot of productive people sick, at a time when livelihoods are already on a knife edge. However, we also need to realize just how devastating widespread lockdowns can be, too.

At least a third of the world’s population is currently living under lockdown, including 1.3 billion people in India alone. Despite years of impressive, if possibly overstated, economic growth, almost a quarter of Indians still live on less than $2 per day. The situation will be much worse in countries that have not enjoyed India’s rapid development. 

Governments in the developing world have been copying policies in much richer countries. But do they necessarily make sense? In the developed West, the major concern is that a sharp peak in cases will overwhelm intensive healthcare services, leading to unnecessary deaths. However, many poorer countries have very few ventilators and experienced doctors and nurses relative to their populations. So what are the benefits of lockdowns that will drive many millions more into abject poverty? 

In the crowded megacities of the developing world – like Mumbai, Cairo, Lagos – social distancing is impractical. Basic handwashing with soap is widely unavailable. From a health point of view, the policies make little sense. Worst, it is estimated that over two billion people work in the “informal” economy – they are off the radar in terms of government action like tax cuts, welfare benefits and other government interventions. As Husain points out bluntly: for many people, if they don’t work, they don’t eat. 

It’s not just the lockdowns in the developing world itself that are important. The economies of developing countries depend, in part, on trade with richer nations. If that is disrupted, poverty levels will rise. For example, the UK clothing retailer Primark has almost no online presence. So the closure of its stores across Europe has left tens of thousands of Europeans out of work – but it has also hit those working for manufacturers in poorer countries. The company has promised to support suppliers for the time being, but a long shutdown would leave an enormous number of poorer workers around the world out of work. 

More broadly, a UK consultancy, the Center for Economic and Business Research, has estimated that British households could face an average loss of income of £515 ($635) per month over the course of this year. A substantial slice of that spending would have been used to buy goods from developing countries. That loss of spending will undoubtedly exacerbate the recessions in poorer countries. 

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This aspect of the economic impacts of the coronavirus lockdowns seems to have largely been missed. It is understandable that in the initial reaction to the pandemic, the focus is on dealing with the issue at a domestic level. But now we have a degree of breathing space and infection rates appear to be down, we must now consider all the impacts of continuing the lockdowns, not just on the health and wealth of people in the rich world, but in the poorer part of the world, too. 

Yet those, like me, who are calling for restrictions to be loosened sooner rather than later are routinely denounced as being more interested in money than saving lives. At the forefront of this demand has been President Trump. Yet even this week, the UK Guardian newspaper could publish an article titled 'Consoler-in-chief? Lacking empathy, Trump weighs the economic costs, not the human ones'

Whatever Trump’s motivations – and he may well be more concerned with American jobs than Bangladeshi ones – the point remains that it will be the most vulnerable around the world who will suffer if economies are shut down for much longer. With Trump in the White House and a Conservative government in the UK, many left-leaning voices in the Anglo-American media seem to have taken a perverse and politicized approach to defending lockdowns, claiming that they are putting people before profits, when it is actually the poor that suffer the most when the economy stalls.

Western governments need to think beyond their own borders about the impacts of this pandemic. While no one is arguing for an abrupt return to normality, every effort must be made to reduce the impacts of social distancing as soon as possible and get all the world’s economies going again.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.