Monday, September 28, 2020

Do Politicians Causing This Economic Human Catastrophe Believe They Won't Be Held Accountable?

tribunemag  |  All over the world, Covid-19 is putting jobs and incomes under threat. As UNCTAD’s most recent Trade and Development report outlined, more than 500 million jobs across the globe are at risk during the crisis, and at least 100 million won’t be coming back. And this is only half the story. Much of the world’s population never had formal employment to begin with; for them, the future looks particularly bleak. Between 90 to 120 million people are likely to be pushed into extreme poverty by the pandemic.

UNCTAD’s report points out that the dire predictions about the potential impact of the crisis are not preordained; what happens between now and the discovery of a vaccine, and the shape of the recovery after that, will be determined by policy decisions made by governments. In much of the rich world, jobs protection schemes of one kind or another seem to have limited the impact of the crisis on formal employment so far. The main outlier is the United States, which had no such centralised scheme. While statistical estimates aren’t all that reliable in the midst of a crisis like this, unemployment claims, which tend to understate the scale of the problem, hit one million in the US this August.

In the Global South, the picture is far bleaker. UNCTAD’s report points to precarious work conditions, high debt levels and pressure from international financial markets as the main constraints on Global South states seeking to respond to the crisis. The report claims that the Global South is facing a $2-3 trillion financing gap as a result of the pandemic. If this gap is not bridged, many of these states will simply be unable to implement the public health and employment support measures needed to tackle the crisis.

One of the most significant challenges for states in the Global South is the scale of the euphemistically termed ‘informal’ economy, which often employs the majority of the population. Street vendors, transport workers and waste collectors make up a significant proportion of the urban economies of the Global South, which have swelled substantially in recent years due, in part, to falling employment in agriculture. Providing targeted support for these workers is much harder than those in ‘formal’ employment – i.e. employment recognised by the state.

Yet these workers tend to be the ones who will require the most help. Many live on or near the poverty line, have few savings and large families. Informal workers are also disproportionately likely to live in informal housing, where crowded conditions and poor sanitation facilitate the spread of the virus. In fact, many of these workers may already have had the virus – recent research suggests that 80% cases of Covid-19 in Africa have been asymptomatic, and the mortality rate for Covid-19 on the continent is much lower, meaning the virus may have swept through the population almost unnoticed. This is substantially due to Africa’s youthful population and lower life expectancy.

Even if the virus may prove less deadly among younger populations in the Global South, the economic impact of the looming global economic crisis will be severe. Indeed, the entirely avoidable economic consequences of Covid-19 may end up killing more people than the virus itself.