Countries facing Economical Default
It is a matter of fact that during this pandemic, all the attention of everyone automatically goes towards the effect of this pandemic on developed countries. These countries are totally focusing inwardly on the issues related to pandemic at home and the anticipated exit from severe lockdown.
No one is focused on the fact that developing countries are also facing some serious problems. A huge economic and health disaster is emerging in developing countries as well. These economic and health disasters make up 85% of the world’s total population.
Due to this corona virus, infection rates are still rising rapidly in a lot of countries and it is not a hidden fact that these crisis are much rising in developing countries. These types of countries are suffering from overwhelming weak healthcare systems. This kind of issues is still pending and unsolved.
The massive economic damage which is going on due to this pandemic is even more worrying aspect of this state. This damage is caused by both; the pandemic and the widespread corona along with fever lockdowns that most of the developing countries are going through. The lockdowns that are imposed in almost every country results in a lot of loss at different scales.
There is an official estimate regarding the loss in different fields. This estimate is done by UN agencies and according to them, 1.5 billion people that is equal to the half global labor force, becomes unemployed due to the latest conditions that are prevailing around the world.
It is also said in the estimate that 500 million people heading quickly towards poverty. Along with that, 250 million could face harsh famine that will result in reversing all the blessings and gains of the past few decades.
Another alarming fact is that the collapse of the global economy will surely damage all the chances of recovery badly. This global economy damage will be hurting all the import and export systems. It will surely disrupt the supply chains as well and will openly become a serious threat for global financial system.
-How Domestic Economics have been severely affected by the Lockdown?
it is an acceptable thing to say that the majority of the occupation who is working in the informal economy without relying on the regular jobs, their social benefits and all the employment rights, have immediately lost all of their assets and livelihoods.
No one is taking the responsibility to facilitate such people. They are just standing on the edge on nobody is there to help them or guide them. Even the governments are not providing any safety nets to pay their wages or contribute in preventing the destitution.
This clearly results in rapid and huge fall in the economic outburst. It also causes massive dislocation among many countries as millions of people are being forced to return to their countryside without their will of going back.
-How the collapse of World Trade has accelerated this decline?
This is a very clear state for almost all the countries whether they are developed or not that there is no country left who is earning good from exports. So, without having enough income from exports program, many developing countries are facing payment crisis on a wider scale.
The reason behind this payment crisis lies in the fact that they have not earned enough foreign currency to buy any essential imported item. The purchasing of imports is a source of keeping their economies running. It helps in a lot of major requirements such as food, medicine, fuel etc.
While on the other hand, in a lot of other cases, it causes a sudden fall in the value of currency as well. This fall in the value of their currency makes the foreign imports much more expensive than before.
It is also an acceptable fact that most of the good jobs in developing countries lay in the export industries. If these export industries are facing this much crisis than it is obvious for every mind to think that it will result in huge and enormous damage to the country itself.
The most worrying aspect is that the economic crisis is not limited to one country or a single region only. It is spreading across the whole world rapidly just as an enormous fire. This simultaneous downfall clearly means that the global economy is likely to shrink as quickly as it does since World War 2