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The Financial Express

2020 in retrospect: From ruins to revival


2020 in retrospect: From ruins to revival

Nobody could imagine at the turn of the new-year that a microscopic enemy in the shape of novel corona-virus would have such a devastating impact on human civilisation. The entire mankind appeared to be quite unprepared for such a sudden crisis, as they were ensconced in the comfort of a delusory belief that massive technological progress achieved by modern civilisation could neutralise any challenge both at the microscopic and macroscopic levels. But ultimately the Covid-19 pandemic ruthlessly upended societies and economies around the world, and even transformed how people worked, met, ate, played, shopped and travelled. The pandemic has effected visible changes on how students learned, men and women communicated, and how people were entertained. Its all-pervasive impact has also led to exacerbation of poverty, malnutrition and ill-health in many countries, and the widening of gap between the affluent segments who could work from home and those who were less fortunate.

Blissfully, safe and tested vaccines have now arrived in record time that holds the potential of beating the virus in not so distant a future. The economies also appear to be regaining their health as jobless people are getting back to work. But the global socio-economic landscape is bound to look different, at least in the foreseeable time-frame. Terminologies like 'lockdowns', 'quarantine', 'social distancing', 'mask mandate' and 'new normal' were quite unknown to the commoners at the turn of the year. But these are now part of everyday vocabulary as the pandemic continues to affect all aspects of human existence.

In a blog-post titled '2020 in Review: The Impact of Covid-19 in 12 Charts' published on 14 December, the World Bank (WB) has touched on 12 areas where the ramifications of the pandemic are visible. Poverty is one area where between 88 and 115 million people worldwide have fallen into the trap of extreme poverty. According to WB forecast, the largest proportion of these 'new poor' came from South Asia, with Sub-Saharan Africa following closely. These new poor were mostly engaged in informal services, construction, manufacturing and hospitality trades, which were severely affected by pandemic-related lockdowns, shutdowns and other restrictions on people's movements. Meant to contain the spread of virus and reduce pressure on the vulnerable and strained health systems, these restrictive measures had a detrimental impact on economic growth resulting in the worst global recession since the Second World War.

The recession has hampered the states' ability to counter the pandemic's multifarious impacts. About half of the low-income countries were in debt-distress even before Covid-19 had struck. They were therefore left with little fiscal space to assist the poor and vulnerable groups hit hardest by the pandemic. However, the Debt Service Suspension Initiative of the WB and IMF enabled these countries to keep billions of dollars in hand for pandemic responses. But debt service outlays for bilateral creditors would compel them to carry a huge burden for many years unless remedial actions are taken to avoid another lost decade. In the absence of such actions, sustainable recovery could be hampered in many countries. The pandemic is predicted to cause a 14 percent decline in remittances globally by 2021, although countries like Bangladesh have paradoxically fared better in the area.

Businesses and jobs have been severely impacted by the pandemic. The micro, small and medium enterprises (MSMEs) in developing countries were under intense pressure with more than half either in arrears or likely to fall into arrears soon. Many of these firms retained staffs with the hope of keeping them on board, and more than a third increased the use of digital technology for adapting to the crisis. But the firms' sales dropped by half, which forced many to reduce hours and wages. The pandemic also highlighted the need for accessible, affordable and effective healthcare system, which has proved to be quite inadequate in developing countries.

Besides, over 160 countries had ordered some form of school closures, thereby affecting at least 1.5 billion children and adolescents that not only caused loss of learning in the short run, but also diminished economic opportunities for those affected in the long run. An estimated USD 10 trillion in earnings or 10 per cent of the global GDP have been squandered due to learning losses and dropouts. Many countries have been exploring remote learning options for mitigating these losses and sustaining the learning process - but with mixed results. A key obstacle at many places has been a dearth of affordable and high-quality broadband connections. While the pandemic demonstrated the need for greater connectivity, it could potentially widen the digital divide as private investments became constrained and public funding had to be diverted to other priority areas like health and social protection.

The pandemic has also exacerbated the risks for women, and threatened their hard-fought gains over decades across multiple indicators. They lost their jobs at a faster rate than men, as they were mostly employed in sectors hit hardest by lockdowns like tourism and retail trade. Besides, women in low and middle-income countries were predominantly employed in informal jobs that entailed lack of access to social protection. People also became more vulnerable due to rise in food insecurity because of the crisis. In fact, the pandemic may have added between 83 and 132 million people to the global total of undernourished population during 2020. Food insecurity and Covid-19 have aggravated the impact of fragility, conflict and violence (FCV) at many places, which might have reversed the gains in socioeconomic growth achieved over decades.

As the world moves on to yet another solar year in this eternal journey of nature, there is now an urgent need for global solidarity and support, especially for the most vulnerable in our societies. Mankind can reasonably overcome the intertwined socio-economic impacts of the pandemic only through concerted and coordinated endeavours. We should not lose heart, as history tells us that great opportunities are born in the deepest of crises, and epoch-making transformations can materialise in mere months and weeks.

Dr Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. [email protected]

 

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