14 07 2020

Why do poor countries suffer from coronavirus more than others?

Why do poor countries suffer from coronavirus more than others?

Coronavirus stretched financially all countries of the world. There has never been such a recession in the economy over the past 100 years. The situation is such that developed countries suffer much less than developing countries such as India, Mexico or Russia. And there are reasons for this. Over the past 10 years, no one country has moved from a developing to a developed.

In developed countries, medicine is more prepared for the influx of patients. Also, indicators of population density and living conditions play a role. All this indicates that poor countries have fallen into a real storm of instability. On the economic side, these states are in a more vulnerable position. Rich countries are weaned from everyday comfort, while poor ones are trying to survive and support the economy.

Let's figure out why? In ordinary times, poor countries developed thanks to the economies of the rich neighbor countries or thanks to China and international trade. When the problem affected developed countries, they stopped withdrawing capital, issuing loans, began to buy less imported goods and refuse to migrant workers, and experienced a deficit in the payment balance in the country.

Now many states are expressing solidarity, and the UN has calculated that, in order not to go far back in time, developing countries will need at least 2.5 trillion. dollars to restore economic potential.

The consequences of coronavirus, social and economic, can be very dire for the entire developed world. And this will not be just the second wave of COVID-19, but the complete collapse of the economic system that is familiar to us.

Financial instability and poverty will lead to new refugees, reduced international trade, hunger riots and reduced access to natural resources.

The main problem is the dependence of the poor on foreign capital, which is expressed in foreign currency debt, loans, etc.

The UN summarized the interim results: “Due to the collapse of commodity prices and the zero number of tourists, developing countries have suffered enormous losses in the form of depreciation of currencies, capital outflows, more expensive loans, lack of export earnings, etc.” The UN does not make an optimistic forecast for a full economic recovery, as, for example, according to the scenario of 2009-2010 after the crisis in 2008.