As some of the world’s richest countries became centres of the coronavirus pandemic, politicians and populations temporarily glimpsed the abyss. By simultaneously attacking citizens’ health and threatening their incomes, the spread of the disease presented an unprecedented challenge to societies in which economic stability was taken for granted.
Safety nets had to be reinvented overnight to protect individuals and businesses during lockdown, while health service capacity was urgently ramped up. In London, Washington, Berlin and Paris, measures costing billions of pounds were rightly signed off by governments with scarcely a second thought.
What the developed countries did for their own economies is now desperately required for the poorest nations of the world. As the virus spreads in sub-Saharan Africa, North Africa and the Middle East, the same twin threats to life and livelihoods are now faced by heavily indebted states with under-resourced healthcare systems. But the kind of financial stimulus undertaken in the west is an impossibility. Without significant and immediate assistance from the global community, the consequences could be catastrophic.
The World Health Organization has warned that Africa may soon face “a huge peak” in coronavirus infections. Yemen, where the health system has been broken by five years of war, announced its first case on Friday. In many of the countries now bracing for the worst, limited access to clean water and cramped communal living conditions will hamper the battle against the virus’s spread. There are acute shortages of testing equipment and ventilators. In locked-down rural economies, food supplies may be jeopardised.
The global fall in commodity prices has already hit sub-Saharan Africa hard, slowing exports and depriving countries of vital hard currency. Capital flight to the dollar, as investors seek a safe haven during the crisis, has further exposed fragile economies. As the picture grows ever bleaker, the World Bank has predicted the region’s first recession for 25 years. A study for the UN has estimated that measures taken to combat the pandemic could nullify 30 years of progress in the fight against poverty.
This week, G20 finance ministers, the International Monetary Fund and the World Bank can coordinate the action necessary when they meet for online spring conferences. More than 80 poor and middle-income countries have already written to the IMF seeking urgent financial help. So far, additional loans have been made available to governments desperately needing to boost healthcare capacity.
Far more is needed. There must be a moratorium on debt repayments from poorer nations to lender countries, multilateral institutions and private creditors (around $44bn is due from Africa alone). This money must stay where it will be needed to provide income support and save lives. Even more importantly, the IMF should be given the funds to finance health spending and an economic stimulus on the vast scale that will be required. The IMF estimated last month that the financing needs of distressed emerging economies will be at least $2.5tn. Its member states should agree to allow the fund to make money available through additional special drawing rights, the mechanism devised after the 2008 crash to boost international liquidity.
As the coronavirus crisis has unfolded, there has thus far been a lamentable absence of global leadership. History will judge the more prosperous nations harshly if they fail to act decisively to help the world’s poor in this hour of need.
