COVID-19, Developing Countries and how you can help

By Zoe Lawson

The biggest disaster for developing nations in our lifetime.

That is how the UK’s Guardian newspaper is referring to the current COVID-19 crisis.  ‘If ever there was a time for concerned citizens and political leaders in both developing and richer countries to come together, it’s now’, they say. The health effects are one thing and they are worrying enough, since ten African countries have no ventilators at all. Malawi, where Grow Movement has carried out projects, is one of the luckier ones with 7 ventilators for a country of 18 million people.

Potentially even more worrying are the economic implications of this pandemic on the lives of ordinary citizens in low income countries. “This pandemic is a health crisis. But not just a health crisis. For vast swathes of the globe, the pandemic will leave deep, deep scars,” noted Achim Steiner, Administrator of the United Nations Development Programme (UNDP). “Without support from the international community, we risk a massive reversal of gains made over the last two decades, and an entire generation lost, if not in lives then in rights, opportunities and dignity.”

Global Recession

It is estimated that $1-2 trillion has already been knocked off the value of the global economy (1), given that the pandemic is affecting three major hubs – Europe, the USA and Asia. As countries in these regions enter economic stagnation/recession, global growth rates slow and this will adversely affect growth rates in developing countries. In addition, if the recession is prolonged, the purchasing power of consumers, including poor consumers, will decline leading to food security issues in the least developed countries.

Effects on food supply

Developing nations often have precarious food production and distribution systems. Whilst developed nations have stable supply chains and citizens have the means to advance purchase food stocks, many people in developing countries work as day-labourers and use their daily earnings to buy that day’s food. COVID-19 lockdown restrictions not only interfere with the production and distribution of food, but also with citizen’s means of purchasing it. Food shortages and price rises could lead to a food security crisis in these regions.

Effects on economies, trade and employment

It is predicted that the adverse effects of COVID-19 are likely to be more severe than those of the 2008 financial crisis, in part because both supply of goods and services and demand for them, are affected. Emerging economies are dependent on trade as a driver of growth, thus disruptions to trade will hit them hard. Loss of export earnings both through disruption of supply chains and lockdowns is projected to cost Africa upwards of $500 billion (2). Global recession means a severe decline in foreign direct investment for developing nations, in addition to removal of capital as investors retreat to less risky markets.

Unemployment is already a major concern in developing nations since the public and private sector do not produce adequate jobs to cover the majority population. This forces many people to create alternative employment for themselves by establishing small businesses as well as engaging in agricultural activities (3). 71% of Africa’s workforce is informally employed and most cannot work from home. Forced closures and reduced consumer demand due to COVID-19 protection measures will thus have a negative effect on both production and employment. All this combined with an absence of government-run social safety nets creates a perfect storm for an unemployment crisis and increasing poverty.

Effects on the most vulnerable

Many ordinary citizens in developing nations are vulnerable to the consequences of COVID-19, but some are especially so. It is women and children who bear the brunt of financial crisis impacts, as seen in the global financial crisis of 2008 (4). The inevitable rise in domestic violence under lockdown is one thing, but the pandemic is also deepening pre-existing inequalities. Women are more likely to lose their jobs than men and many women in developing countries are self-employed. Women entrepreneurs are often discriminated against when attempting to access credit. Female-dominated sectors such as food, hospitality and tourism are expected to feel the harshest economic effects of the pandemic containment measures (5).

How you can help

It’s a sobering analysis, but the problems are not insurmountable. Practical, on-ground responses to help poorer countries will include aiding small enterprises to adapt their business models and strategies to cope in a post-COVID-19 market. This is exactly where Grow Movement can assist. Bear in mind some sage words from HH the Dalai Lama; “if you think you’re too small to make a difference, try sleeping with a mosquito in the room”. Help a small business today – make a donation or become a Grow Movement volunteer consultant.

Links & References

(1) The Overseas Development Institute ‘Financing the COVID-19 response in sub-Saharan Africa’ (23rd April 2020)
(2) UNCTAD ‘Africa needs a Marshall plan to ride out Covid-19 crisis; prepare for uncertain times’ (16th April 2020)
(3) UN Africa Renewal (15th April 2020)
(4) The Overseas Development Institute, ‘Why gender matters’ (17th April 2020)
(5) UNCTAD ‘COVID-19 requires gender-equal responses to save economies’ (1st April 2020)
Photo by Mohammad Fahim on Unsplash

 

7 May 2020

Zoe Lawson is a social entrepreneur with an interest in translating innovations for international development. She has a PhD in biological chemistry and an MBA, and has been involved with Grow Movement since 2015 as a volunteer consultant and supporter.

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