COVID 19: Assessment of possible damages in the developing world

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M Abbas Hassan

2020 has been a catastrophic year so far and the world has seen some devastating events that have not only threatened peace and stability but also changed the future outlook of the world as we know it. At the onset of the year on January 3rd, Middle East was cast with shadows of a bloody war when the United States assassinated Iranian Gen. Qassem Soleimani in Baghdad. The Australian bushfire started and resulted in the death of over 1 billion animals. The refugee crisis in Syria also peaked as images of Syrian children freezing to death in the harsh winter started to appear on the internet. Then came the outbreak of COVID-19. Initially as the people around the world joked about the rumored source of the virus; it continued to spread. As a result a global mass negligence was seen. Today the novel Coronavirus that has infected over 5 million people across the globe is the first modern day pandemic. With no cure or vaccine, the best way-out was a lockdown that was more or less adopted by all the countries in the world. This took a massive hit on the entertainment, hospitality, tourism and manufacturing industry. With estimated losses amounting to trillions of dollars and millions of people losing their jobs, the outbreak has changed the world as we know it. According to a report by World Bank, the pandemic till date has pushed 49 million people across the world in extreme poverty.
After at least 2 months of lockdown, the world is gearing up for stepping out of lockdown, it is important to do an assessment of the damages that might leave a long lasting impact on developing world. A positive development that is a direct result of the closure is its impact on the environment. The world has not witnessed such clean air in decades and the ozone damages have started to recover. On the other hand, the developing world looks up to the developed world for the foreign remittances by nationals living abroad. The first thing that the developing world will witness is a decline in the foreign remittances. This is largely due to the fact that a number of people will lose their jobs. A number of countries including Pakistan are heavily dependent on the foreign remittances to balance their current account deficit. The second impact that the developing countries will face is a decline in international travel. Right now with the travel bans in place, airlines are finding it hard to stay afloat. 2 domestic airlines of the United States, one British, one Australian and one Colombian airline have filed for bankruptcy and entered into administration. Hands full of airlines have also slashed the number of employees and it seems that the airlines of developing nations will not be in a position to take the final impact. With low price carriers going out of business, it would be very hard for people to fly on high priced big names which might increase fares a tad more to cover the lockdown damages.
The next impact that would be imminent will be in the form of exports. The factories of developing countries strive on the orders of developed world. With the developed world stepping out of lockdown in a testing phase, a roll out of export orders is not in sight for now. This means that with no sales and foreign orders, the factories might be pushed to let their staff go. Unlike Pakistan, not every country can roll out generous bailout packages that might cushion the workers for a few months. Even then, no stimulus package can run on for an unforeseeable time and for the factories to work, international export orders are a must. Another dangerous impact will be borne by academia and this is probably the most sensitive as it is impacting not only the developing world but the entire developed world. As a result a whole generation is at stake and there is no clarity of thought in this regard. With universities and colleges closed, effective dialogue and discussion is at a standstill. On top of that, the normal work routine is shattered and the pursuit of knowledge is not backed with a proper guidance. Exams are getting cancelled, resulting in students getting a free pass and proper knowledge not being imparted; it seems that the current academic system is under severe threat. One more impact that the developing world must also brace an impact for is the plausible exponential growth in violence and street crimes after the lockdown. Unemployment, layoffs, no opportunities to world and a family to feed, an outbreak of violence is also on the cards. The global debt relief initiative of Prime Minister Imran Khan is a step to control these threats. With the governments not threatened by heavy debt servicing, they can concentrate on the welfare of people and steer their countries to a better future ahead. If the people are not looked after properly in this situation, the consequences would be devastating.
—The writer is Research Associate at Institute of Strategic Studies Islamabad.