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COVID-19: The Impact On Developing Economies

The coronavirus pandemic has hit global economies hard. But how have developing economies been affected by the virus?

What can be done to help developing countries? 

The United Nations Department of Economic and Social Affairs warns that COVID-19 threatens to undo the progress that has been made since the current Sustainable Development Goals were introduced in 2015. These call for continued work towards ending poverty, as well as promoting sustainability across the world.   

Developed countries continue to have a responsibility to developing countries as Covid-19 begins to take root. The World Economic Forum is calling for an increase in official funding assistance, broader debt relief, and the urgent establishment of an international solidarity fund.

But developing countries can also help themselves, Tomasz argues. “What might be needed is a sort of Marshall plan for many developing countries soon, which would create a win-win for both developed and developing countries. 

“Such proposals were on the table even before the pandemic, concerning especially African countries in aiding their development and halting immigration to Europe and the U.S. But I am not optimistic. 852e7c3d8be1ca5a1fe22c4d9d7b151b07c3a8a8.jpeg

One solution Tomasz suggests could be for developed countries and banks to consider writing-off existing debts for developing countries where possible. Developing countries shouldn’t be penalized for defaulting on payments by further restricting their economies through new trade barriers or ‘reshoring’ resource industries, e.g. sourcing textile materials from other countries.  

But, as Giovanna (pictured) points out, this can only be achieved if countries––both developed and developing––work together. 

“Nobody has a crystal ball,” she admits, “but we’re all realizing the virus is here to stay and need to adapt accordingly. It’s going to change our behaviors for quite some time.” 

BB Insights examines the latest news and trends from the business world, drawing on the expertise of leading faculty members at the world's best business schools.



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