Global trends and Covid-19

In their article “Global Trends in 2021. How COVID-19 is Transforming International Development” Mikaela Gavas and Samuel Pleeck are writing for the Center for Global Development about recent economic, social and technical trends in the time of the Covid-19 pandemic.

Economy

The authors write that the pandemic has pushed Africa into its first recession in 25 years and that COVID-19 could push as many as 34 million people into extreme poverty, erasing at least five years of progress in fighting poverty in Africa. They note that in order to limit long-term damage to the economy and facilitate the recovery, governments as in Africa largely chose to pursue expansionist fiscal policies, hence creating budget deficits and increasing public debt. Also, these debt-related strains will, according to the authors, add to broader social fractures around the unequal sharing of crisis and recovery burdens by income group, occupation, region, age, gender, ethnicity, and geography as in cases of gig-economy and migrant workers.

When it comes to tourism, global arrivals fell by 72 per cent in the first 10 months of 2020, while the World Bank estimated in 2020 that remittance flows to low‐ and middle‐income countries declined and mostly affecting countries in Central Asia, East Asia and sub-Saharan Africa.

COVID-19 and the resulting lockdowns have also triggered a mass migration from analogue to digital and highlight that access to the Internet is crucial for socio-economic inclusion. At the same time, half of the world’s population does not have access to the Internet, either through a mobile device or through fixed-line broadband. Countries in sub-Saharan Africa and emerging and developing economies in Asia are among those with the lowest access to the Internet. Authors write that the pandemic is also worsening income inequalities within countries.

Politics and institutions

Authors note that “patterns of de-globalisation and rising self-protection instincts of nation-states are being reflected in tensions between multilateral collaboration versus go-it-alone nationalism”. Faith in globalisation had already profoundly eroded, especially among large middle-class cohorts whose real incomes were left behind in the 2010s and who have become more fragile. “Nation-first” behaviours are also based on underinvestment in public services and undermined social contracts. The authors write that the pandemic, despite being a threat that knows no borders and calls for global solutions, appears to have, if anything, hardened nationalism.

While leaders may understand that the pandemic is a global problem that can only be truly defeated globally, they are under intense political pressure to make their own citizens their top priority. Also, while the richest nations have secured billions of doses of COVID-19 vaccines, developing economies are struggling to access supplies. Tackling global challenges requires engaging with high- to middle-income countries that are major emitters (in the case of climate change) and/or otherwise are well-positioned to help mitigate catastrophic risks.

The authors also write that it is five years since the UN Agenda 2030 started. The SDGs faced strong headwinds even before COVID-19 due to their large intrinsic scope and diversity, undefined sequencing choices, and diffuse leadership and funding responsibilities. Also, populist pressures have called for greater visibility of national contributions and stronger articulation of strategic interests served by cooperation. Strategic interests also encourage greater synergy and leverage between other external policies as trade, climate, science, security, migration links and financial cooperation per see. At the same time, a growing number of low-income countries are increasing the likelihood of a new systemic debt crisis.

When it comes to humanitarian and development aid, as demand for assistance increases and supply depletes, development agencies have to do more with less. For example, an analysis by Development Initiatives in 2021 based on data from the International Aid Transparency Initiative (IATI) reveals that total bilateral aid commitments fell by 19 per cent in 2020 compared to 2019.

Public goods and global risks

The authors note that dealing with cross-border challenges and threats and the provision of global public goods have become the focus of increased concern. According to them, tackling global challenges also requires sophisticated foreign policy approaches, including engaging with high- to middle-income, often no longer aid-receiving countries that are major emitters and/or otherwise are well-positioned to help mitigate catastrophic risks.

The crisis has amplified the tension between protecting the global commons and fighting extreme poverty. For example, in 2019, total climate-related bilateral ODA disbursements were valued at almost $27 billion and equivalent to about 20 per cent of total bilateral disbursements from DAC providers, including EU institutions. Aid budgets will need to be seen to contribute to massively expanded global health pandemic security, especially health R&D spending and COVID vaccine . Finally, while resilience is the most prized characteristic of governments and public services, it is increasingly clear that development agencies have not always cultured it.

For more information, you can read the article via this link.

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Vladan Lausevic

Vladan Lausevic

I am active as a social and policy entrepreneur. SEEDS ambassador. Motto: I have no identity, I have only identities.