NEW YORK:The economic fallout from COVID-19 is likely to get “much worse” before it gets better for some six billion people living in developing economies, the UN said on Monday, in an appeal for a $2.5 trillion rescue package to boost their resilience to further hardship.
According to new analysis from UNCTAD, the UN trade and development body, commodity-rich exporting countries will face a $2 trillion to $3 trillion drop in investment from overseas in the next two years.
An economic downturn in these emerging economies was already evident in the last quarter of 2019 – before the new coronavirus outbreak emerged in central China last December – said Richard Kozul-Wright, UNCTAD director of globalization and development strategies.
“The health crisis is still to come in many developing countries,” he told UN News. “Now, if that crisis comes as these countries have been significantly weakened by the economic shockwaves from the crisis. And that is a…very vicious combination of an economic crisis and a health crisis. So we’ve got to find ways of strengthening the healthcare system and services in developing countries and building up resilience on that front very quickly.”
Rich industrial nations have already announced a $5 trillion global rescue package plan to provide an economic safety net to their businesses and workers. This unprecedented measure should reduce the extent of their shock – “physically, economically and psychologically” – said Mr. Kozul-Wright. It is also expected to create $1 trillion to $2 trillion of demand among the major G20 economies, boosting global manufacturing by two per cent, he writes in his latest report.