What does COVID-19 mean for development?
The COVID-19 pandemic has taken an enormous toll on human lives and economies across the globe. It has exposed gaps in public health systems and digital infrastructure. The crisis has hit vulnerable groups particularly hard – people in informal employment, economic migrants and women – and exacerbated existing inequalities.
Worse than the immediate economic consequences of the pandemic might be what economists call “scarring.” That’s damage that could weaken development for decades to come. Scarring includes the consequences of 1.5 billion children globally affected by school closures and 100 million more children not reaching an age-appropriate level of reading proficiency. The impact of this learning loss will last decades. Small businesses, which provide the majority of jobs in developing countries, will also take years to recover.
EIB economists Tessa Bending, Colin Bermingham and Emily Sinnot, go in-depth on what COVID-19 means for development.
From the loss of education to the impact on businesses, jobs and the flow of finance for development, the economic scars of the pandemic will take time to heal. In the light of COVID-19, development finance backing from the European Union is more important than ever.
The world was not doing enough for sustainable development, even before the pandemic. The existing gap in financing for the achievement of the Sustainable Development Goals has been estimated at around $2.5 trillion.[1] Growth in developing and emerging economies was, however, steadily reducing the number of people in extreme poverty. The recession caused by COVID-19 has reversed that process, already pushing some 120 million people back into extreme poverty.[2]
Judged by the number of positive COVID tests, many developing countries, particularly in Africa, seem to have weathered the pandemic quite well. But we shouldn’t be complacent. Comparing mortality rates since the start of 2020 with previous years suggests 130 000 excess deaths in South Africa alone. In Egypt, a country where infection rates have appeared comparatively low, we see 75 000 more deaths than usual.[3] Global action to bring the spread of this disease to an end everywhere is a moral imperative.
Even where infection rates have been less high, we must remember that not all countries have the same capacity to respond, to cushion the social and economic impacts. The pandemic has exposed investment needs in public health systems and digital infrastructure, as well as vulnerabilities due to a lack of fiscal space and low economic diversification. Vulnerable groups such as those in precarious or informal employment, economic migrants and women are most exposed to the economic fallout, exacerbating inequalities.
Worse than the immediate economic consequences of the pandemic might be what economists call “scarring”: the damage that could weaken development prospects for years or decades to come.
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Πηγή: eib.org
