The onset of the global coronavirus pandemic has had a monumental impact on countries across the world, none more affected than developing countries. In this article, after speaking with activist and former volunteer of Finance at Fix the Mask, Yasmin Bashirova, we highlight how COVID-19 has disproportionately affected less-developed nations, as well as efforts being made to assist these nations through the course of the pandemic.
Economic Impacts on Developing Countries
The global economic downturn induced by COVID-19 has taken a disproportionate toll on developing and emerging economies, which will take the hardest hit due to their lack of resources to protect against the economic crisis. In countries like Azerbaijan, Bashirova’s motherland, citizens struggle to obtain access to COVID-19 tests or hospital visits due to poor medical infrastructure. Even if at-risk citizens are lucky enough to live near a testing site, each test costs the equivalent of US$50 which amounts to ⅕ of an average salary, thereby discouraging people from seeking testing in the first place due to the significant financial burden it poses. Additionally, it can be difficult for these countries to accurately track pandemic-related data. While Azerbaijan currently reports about 230,000 cases and 3,100 deaths, those numbers are likely much higher.
The global recession could set some countries back decades, as the pandemic will likely lead to higher infant mortality rates and stunted growth for children in developing nations.
The United Nations Development Programme (UNDP) has estimated that developing countries are projected to lose at least $220 billion in income—a figure that is capable of crippling their economies. According to the World Bank, this could push over 100 million people into extreme poverty, which would be the first increase in global poverty since 1998. For context, 680 million people are already affected by extreme poverty throughout developing countries. In 2020 alone, 71-100 million people were pushed into poverty, which undoes a lot of the progress made over the past five years. As such, the mere thought of eradicating poverty altogether sounds like an unattainable utopian dream. Additionally, 207 million people may be tipped into extreme poverty by 2030 due to severe long-term impacts induced by the pandemic. Of those, it’s estimated 86 million could be children who already suffer disproportionately due to their households’ economic circumstances and limited access to technology. Now with the mass closure of schools, children’s education and their prospective job opportunities are on the line, as well as their nutrition if they are forced to forego essential meals traditionally provided by their academic institution. If these estimates hold true and the pandemic is not held in check, the future consequences could be disastrous with as many as one billion people living in extreme poverty.
The concept of a stimulus check doesn’t exist in countries like Azerbaijan, even though citizens were only permitted to leave their houses for three hours per day with authority permission at the height of the pandemic. Nothing except for grocery stores and hospitals were open, and you had to request government permission even to leave the house to throw out the trash. The government doesn’t pay people to stay at home. For non-essential businesses like Bashirova’s grandmother’s pet supply store, her operation was completely shut down as it was deemed “non-essential.”
To make matters yet direr, foreign direct investment flows are projected to decline by 30 to 40 percent. Developing countries’ outflow has been cut to one-third of its usual production, leading to major emerging currencies depreciating by 15 percent and forcing these nations’ citizens to pay more for imported goods. Moreover, because much of these countries’ debt is tabulated in terms of US dollars, their debt will be even more difficult to pay off as the value of the US dollar has also decreased. Developing countries’ debt is expected to rise from $2.6 trillion to $3.4 trillion over the next two years—a catastrophic blow.
Vaccine Distribution in Developing Nations
Because no economies are particularly flourishing during the unprecedented pandemic, there are limited resources that can be allocated to developing countries. However, organizations such as the World Bank have worked to strengthen health facilities to ensure that there are enough well-trained frontline workers in place. They have also worked to facilitate access for countries to supplies and equipment by incentivizing interested suppliers with negotiated prices and conditions. The faster the outbreak can be curbed—the quicker developing nations can get back on track.
Despite the efforts of the World Bank, people in low-income countries such as Azerbaijan stand little chance of getting vaccinated in 2021, as wealthier nations have reserved more vaccines than they need. Rich countries have bought up 53% of the world vaccines even though they account for just 14% of the population, which could mean that unless something changes dramatically, billions of people around the world will be unable to receive safe and effective vaccination for COVID-19 for years to come.
Rich countries have obtained enough vaccines to vaccinate their populations three times over while developing nations cannot even protect their frontline workers. This sort of privilege is sure to lead to catastrophe for years to come for the future of global development. At the same time, richer countries such as the United States will be more equipped to recover even though they already have a huge head start with medical infrastructure and the technological breakthroughs that were made to equip the country to handle closures.
About Yasmin Bashirova
Yasmin Bashirova, originally from Azerbaijan, possesses a deep sense of community. She speaks openly on human rights and social justice issues and has been featured in several San Francisco Chronicle articles due to her activism. Bashirova currently resides in the bay area and is the Chief of Staff at an e-commerce startup on a mission to bring trust and simplicity to the peer-to-peer used car market. She graduated from Stanford University with an M.S. and B.S. in Energy Resource Engineering. She was also active in Model United Nations. After graduation, Bashirova worked as an Investment Banking Analyst at Goldman Sachs in New York City, where she provided data-driven financial analyses for capital decisions such as M&A deals, IPOs, and LBOs.