Publications /
Policy Brief

Back
Covid-19 and the Dilemma of the Developing Countries
Authors
January 26, 2022

COVID-19 has caused serious damage throughout the entire world. As of mid-2021, the global fiscal cost of COVID-19—excluding the most important consequences, such as human lives, mental health effects, restrictions of human freedom, and other non-pecuniary components, have amounted to at least $16.5 trillion, about 18% of world GDP (Dinh 2021). Financial support has varied across countries depending on income level, political willingness, and the extent of the pandemic in each economy. As a result, fiscal deficits in both developed and developing countries have risen. For the former, the increase in the fiscal deficit comes from both rising expenditures and declining revenues. For the latter, the fiscal deficit increase heavily reflects the collapse in fiscal revenue.

However, the saga does not end here. In the coming 12–18 months, developing countries will continue to deal with the pandemic. They will be required to find resources to control the disease. In addition, governments are expected to continue to provide social protection— especially in terms of cash transfers for vulnerable populations—in order to protect the labor supply. These needs will pose massive challenges for countries under tight financial constraints, especially those at risk of debt distress. Thus, we will explore the implications of this necessary spending on the macrostability of selected developing countries.

RELATED CONTENT

  • Authors
    Gerson Javier Pérez Valbuena
    Diana Ricciulli
    Jaime Bonet
    Inácio Araújo
    Fernando Perobelli
    December 28, 2021
    This paper analyses the regional economic differences in the impact of lockdown measures to prevent the spread of COVID-19 ordered by Colombia’s national gov­ernment. Using an input-output model, we estimate regional economic losses by extracting a group of formal and informal workers from different sectors of the economy. Results show regional differences in the impact of lockdown measures on their labour markets, local economies, and productive sectors. We also find that periphera ...
  • Authors
    October 21, 2021
    In the World Economic Outlook, published October 12, the International Monetary Fund (IMF) slightly lowered its forecast for global economic growth this year to 5.9%, while maintaining a forecast of 4.9% for 2022. It also emphasized the “divergence” in the pace and extent of economic recovery in different countries. Two factors are highlighted in explaining the divergence. First, there are the different paces and extent of vaccination in different countries, that is, the ‘Great Vac ...
  • March 02, 2021
    The Covid-19 pandemic has severely damaged the global economy. Confinement policies, global value chains disruption and risk aversion in the financial systems markets have brought the glo ...
  • Authors
    Paola Maniga
    Yassine Moustanjidi
    February 15, 2021
    The COVID-19 pandemic has exposed new vulnerabilities in social, infrastructure, and governance systems. In the first months of the pandemic, there was a genuine concern about the capacity of the Global South to contain the spread of the virus. African cities were particularly vulnerable, with some experts1, including the head of WHO2, predicting a catastrophe for the continent. Despite the structural and chronic challenges that African cities face, including informality, poverty, a ...
  • Authors
    February 12, 2021
    This paper provides a preliminary assessment of COVID-19’s impact on Africa, focusing on the sub-Saharan Africa (SSA) countries, based on information available as of October 2020. We first identify the two key long-term issues of the SSA countries before the crisis: resource dependency and slow productivity growth. COVID-19 has hit SSA countries hard, causing human and economic destruction and wiping out economic progress from the last decade. Instead of growing at 2.9% in 2020, as ...
  • Authors
    Sous la direction de
    Muhammad Ba
    Amanda Bisong
    Rafik Bouklia Hassane
    Salma Daoudi
    Pierre Jacquemot
    Leo Kemboi
    Jacob Kotcho
    Mouhamadou Ly
    Solomon Muqayi
    Meriem Oudmane
    Mohamed Ould El Abed
    Kwame Owino
    Asmita Parshotam
    Fatih Pittet
    December 29, 2020
    Dès les premiers cas du Coronavirus relevés en Afrique, les prédictions les plus sombres ont été faites sur la catastrophe sanitaire à venir sur le continent, en raison d’un certain nombre de caractéristiques supposées favoriser la propagation de l’épidémie. Ces prévisions ont été démenties par la rapidité des ripostes des Etats et par divers autres facteurs. La progression de la Covid-19 en Afrique n’est pas le fait d’une dynamique unique mais plutôt de multiples profils de risques ...
  • Authors
    Fernando S. Perobelli
    Inácio F. Araújo
    Karina S. S. Bugarin
    December 14, 2020
    This paper explores the use of simulations in policy decision-making in the Brazilian State of São Paulo in fighting the COVID-19 pandemic. We propose a methodology for assessing the daily economic costs of control strategies for mitigating the effects of coronavirus. The method is based on the partial hypothetical extraction approach to input–output systems. Simulated daily scenarios based on different levels of compliance to the control measures are used to help guide the design o ...
  • Authors
    December 14, 2020
    L’économie marocaine fait face à une année 2020 extrêmement difficile et complexe. La crise provoquée par le choc de la Covid-19 est singulière, multicanale et fondamentalement différente des crises précédentes. Elle altère le système productif par un double choc d’offre et de demande, amplifié, de passage, par une crise de confiance. Alors que l’année 2020 touche à sa fin, il est crucial de dresser une première évaluation circonstanciée des ramifications de cette crise, qui permett ...