Manjit Bhatia

Opinion | To avert a pandemic catastrophe, wealthy nations need to help the world’s poorest

Without urgent economic assistance, the world’s poorest countries face the prospect of Covid-19 ravaging their inadequate health care systems, overcrowded jails and refugee camps – bringing a global catastrophe

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Rohingya refugees join in a mass prayer session at Kutupalong camp in Cox’s Bazaar, Bangladesh, last August. Millions across Asia live in overcrowded refugee camps. Photo: Reuters

Manjit Bhatia

Published: 5:00pm, 5 Apr 2020Updated: 8:19pm, 5 Apr 2020

Covid-19 infection rates are slowing in some places, thanks to state-enforced lockdowns, bringing a glimmer of hope. Western governments, having ditched their free-market mantra, are continuing with Keynesian interventions to “hibernate” their economies, and protect them from carnage. But how do poor, developing countries do this, and can they?

While the world locked eyes on Covid-19’s sweep, the G20 summit, held virtually on March 26, went unnoticed. Just as well: it delivered nothing. The World Health Organisation warned of the pandemic accelerating, but G20 leaders ignored the potential catastrophe awaiting many developing countries.

Covid-19 could rip through these largely commodity-producing and low-cost manufacturing economies and wreak a second wave of havoc on the struggling world economy.

Developing countries should be taken seriously. If the OECD is correct, they will surpass their advanced counterparts in aggregate terms, with longer-term forecasts suggesting “developing and emerging countries are likely to account for nearly 60 per cent of world GDP by 2030”, ceteris paribus (all else being equal).

But the pandemic is undermining notions like ceteris paribus. Equally, forecasting models aren't gospel. We may not return to pre-Covid-19 “normalcy” or to a post-Covid-19 “new normalcy” if the disease sweeps through developing countries.

If the virus is not effectively contained in the next three months, a deep recession is assured. But if the disease ignites or reignites in the least-developed parts of the world, we face an economic depression.