What are international institutions pledging in the wake of the pandemic?
The unprecedented COVID-19 pandemic is first and foremost a humanitarian disaster. Expectedly, its effects go beyond the health of populations as it impacts most economies across the globe. For the least developed countries (LDCs), as for others, a swift response is required.
Lessons can be learned from the Ebola crisis in West Africa, where engaging communities quickly was key to containing and stopping the spread of the disease. Beyond this, and national responses to flatten the curve and control the spread of the virus, much needs to be done at the regional and international levels to orchestrate the response and lay the foundations of recovery.
Forecasts for the global economy and trade in 2020 have been revised downwards by the International Monetary Fund (IMF), the World Bank and the Organisation for Economic Co-operation and Development (OECD). Trading partners of LDCs, including the top three (i.e. China, the European Union and the United States), have had to take measures to confine their populations in a bid to curb the spread of the virus. Global trade is therefore being disrupted by factors such as decreasing levels of consumption, restrictions placed on the movement of people, business shutdowns and lower productivity in operations. In addition, foreign financial flows may be shifted away from coronavirus‑affected countries, and there is an underutilization of domestic capital and labour as factories are left idle and people stay at home.
These global supply chain disruptions are impacting LDCs, affecting, for example, textile product exports from Bangladesh and Cambodia where many factories are already closing due to a shortage of raw materials from China. In Cambodia, it has been reported that impacts are significant.
Although countries with tourism sectors will be impacted irrespective of their level of development, in LDCs this impact is likely to compound with other forms of economic and social fragility.
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