How poor countries can deal with the economic shock of COVID-19

The coronavirus crisis could increase the number of poor and hungry by 2%.
Countries should refrain from imposing trade restrictions where possible.
Governments should enhance affordable internet access to enable e-commerce.

The least developed countries (LDCs) have limited capacity and preparedness to handle the economic fallout of the COVID-19 crisis, and are likely to face significant hardships. Initial estimates suggest that these disruptions could potentially contribute to increased global poverty, with the number of poor and hungry people rising by 2%.

However, with appropriate support measures and policies, and coordinated efforts, the world’s poorest countries can navigate this crisis. Here’s how:

1. Keeping trade open
2. Providing investment-related support
3. Increasing aid for trade flows
4. Harnessing the potential of e-commerce
5. Designing and implementing safety net policies

Although LDCs may not have the capacity to undertake such measures, they should use this crisis as an opportunity to put in place safety net mechanisms to provide relief to their companies, particularly MSMEs, and the poor and vulnerable segments of society. In order to ensure LDCs do not increase their debt burden, we should fully explore and make use of any support extended by international financial institutions – including a recent Call to Action to suspend debt payments from the so-called IDA countries, which are home to two-thirds of the world’s population living in extreme poverty.

Read the complete article on WEF Agenda