Financiers and traders on Wall Street may be starting to feel optimistic, but for most people the gloom is only deepening. In the United States, thousands of people continue to die of covid-19 each week, while some 30 million people remain unemployed. Industrial output and consumer spending are still well below pre-pandemic levels, with experts pointing to evidence of spiraling inequality as winter approaches. In Europe, a second surge of infections has triggered warnings and shutdowns, compounding the continent’s economic jitters.
Yet the worst pain is centered in the developing world. In recent weeks, a host of international organizations and agencies have sounded alarms over crises provoked by the novel coronavirus. While many Western governments managed to hold the line through stimulus programs, poorer nations are floundering amid massive public debt and shortfalls in state revenue. All the while, the roughly 2 billion people who eke out a living in the world’s informal economies face varying degrees of deprivation.
David Beasley, the executive director of the U.N.’s World Food Program, warned during a Sept. 18 briefing that a “wave of hunger and famine still threatens to sweep across the globe.” He said his organization needed close to $5 billion to prevent 30 million people from dying of starvation. According to the agency, some 135 million people around the world faced acute food insecurity before the pandemic, and that number is expected to double this year.
The World Bank says the pandemic may undermine international efforts to bring down the global extreme poverty rate to 3% by 2030 – and projects that existing poverty levels will grow this year for the first time since the 1990s. Some 160 million people in Asia alone may be forced below the poverty line, according to the Asian Development Bank. In Latin America, that figure is around 45 million people, according to a recent U.N. study.
UNICEF, the U.N. Children’s Fund, calculated that 872 million students in 51 countries are unable to head back to their classrooms. More than half that number live in circumstances where remote learning is impossible – a scale that suggests a generational crisis in education.
As hospitals and clinics around the world remain swamped, UNICEF fears new declines in infant and maternal health. “When children are denied access to health services because the system is overrun, and when women are afraid to give birth at the hospital for fear of infection, they, too, may become casualties of COVID-19,” Henrietta Fore, UNICEF’s executive director, said in a statement. “Without urgent investments to re-start disrupted health systems and services, millions of children under five, especially newborns, could die.”
Campaigners who have led the charge to reach the U.N.’s poverty-eradicating “sustainable development goals” warn of an epochal reversal. “We have celebrated decades of historic progress in fighting poverty and disease,” wrote Bill and Melinda Gates in their foundation’s annual “Goalkeepers” report. “But we have to confront the current reality with candor: This progress has now stopped.”
Even with the $18 trillion of stimulus pumped into the global economy, mostly by wealthy governments, the International Monetary Fund projects a cumulative loss of some $12 trillion by the end of 2021. A separate study from the International Labor Organization, a Geneva-based U.N. body, found that the pandemic has already wiped out $3.5 trillion in income from millions of workers around the world. By the ILO’s calculations, projected global working-hour losses in 2020 will be the equivalent of some 245 million lost jobs.
Some of the worst-hit places are in countries that cannot afford such setbacks. “India’s economic output shrank by 24% in the three months to June compared to the same period last year, worse than any other major economy,” my colleagues Niha Masih and Joanna Slater wrote in a report on Indian university graduates scrambling for meager wages through a government-run rural labor program. “During the nationwide lockdown, more than 120 million jobs were lost, most of them in the country’s vast informal sector. Many of those workers have returned to work out of sheer necessity, often scraping by on far lower wages.”
In Latin America, the economic disaster may be just as acute, if not more so. Leading U.N. officials warn of a “lost decade” in the region, with spiking poverty and entrenched recessions. The ILO pointed to a “stimulus gap” between rich and poorer countries. “Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social and employment impacts,” Guy Ryder, the ILO secretary general, said in a statement. “That includes sustaining support for jobs, businesses and incomes.”
But it’s unclear how much more wealthy governments are willing to give in the face of their own budget crunches. “Developing countries have been exposed to manifold shocks in a context of anaemic global growth,” Stephanie Blankenburg, the head of debt and development finance at the U.N. Conference on Trade and Development, told the Financial Times. “The international response has been extraordinarily hesitant – way too little, way too late.”
The focus may have to fall on private donors. “Worldwide, there are over 2,000 billionaires with a net worth of $8 trillion. In my home country, the USA, there are 12 individuals alone worth $1 trillion,” said Beasley of WFP. “In fact, reports state that three of them made billions upon billions during COVID. I am not opposed to people making money, but humanity is facing the greatest crisis any of us have seen in our lifetimes.”