The Pandemic and Poor Countries

It is reasonably certain that COVID-19 will extract its deadliest toll on poorer countries, due in part to rules set by Western-led global institutions. 

Global economic crashes are more pronounced in low-income countries, due to the bargain-basement prices multinationals offer countries in exchange for vast amounts of commodities and cheap labor. 

World Health Organization Director General Tedros Adhonom Ghebreyesus has urged governments to “double down” against the pandemic. But austerity measures imposed by the IMF and World Bank have stripped the world’s poorest nations of the resources to do so. 

The world’s poorest regions are mainly agrarian, lacking the population density hastening the spread of COVID-19. For instance, stereotypical media images of crowded Indian cities bridling against Prime Minister Narendra Modi’s lockdown ignore that India is two-thirds rural. 

Marginalized places also lack the vast human flows now coursing through the world’s economic centers. 

Yet poor countries are in no shape to battle a new pandemic. These governments pay out exorbitant sums to lenders like the IMF and World Bank, which has responded to calls for debt relief in large part by offering new loans. Debt service costs for nations in the Global South have increased in recent years, squeezing social spending in those countries. 

IMF and World Bank-designed austerity packages catalyzed cuts to health budgets in the 1980s and 1990s as HIV/AIDS infected millions of people. In the absence of aggressive action during its early years, deaths reached genocidal proportions. The HIV/AIDS epidemic still kills 770,000 people per year. 

Millions more have died because of the prohibitive cost of new life-saving drugs. World Trade Organization intellectual property rules have restricted access for the poorest patients by enforcing the rights of pharmaceutical companies to maintain inflated prices worldwide. 

Meanwhile, the Trump administration is working to strengthen patent enforcement further through new trade deals, and is even trying to monopolize potential coronavirus vaccines, according to a March 15 report in The Guardian.

Global economic crashes are more pronounced in low-income countries, due to the bargain-basement prices multinationals offer countries in exchange for vast amounts of commodities and cheap labor. 

For example, the Central African Republic exports more to France than to its immediate neighbors. Its major exports are diamonds, copper, timber, and coffee. Despite the high value these things carry, France’s per capita GDP is 63 times higher than its former colony. 

The continent of Africa is more dependent on outside trade than any other large region, with 90 percent of exports leaving at prices set by multinationals. Africa accounts for just two-percent of international trade.    

Sudden drops in commodities prices devastate poor countries. The most recent cratering in prices ran up debt, in 2016, worldwide. The 2008 Wall Street-led meltdown resulted in a crash in raw goods prices, causing what anthropologist Jason Hickel called “a massive spike in hunger.” 

In 2001, a few multinational buyers drove down the price of coffee beans. By 2002, Ugandan farmers got $0.14 for one kilogram of beans, which sold for $26.40 in the United Kingdom. This caused famines, put children out of school, left health systems in tatters, and fueled an illicit drug trade.  

With major markets shuttered, the U.N. Assistant Secretary General Luis Felipe López-Calva has warned that the outbreak posed “a threat to the macroeconomic stability of Latin America and the Caribbean.” 

Africans are bracing for the fallout, with no expectation of aid from the rich world whose policies have put them at risk. Funding for global health cooperation by the United States has been under relentless assault by the Trump administration. 

COVID-19 is a global crisis. We are all in this together. From this point forward, in our collective response to this pandemic, we should be mindful of the cruel inequities that our nation has helped create, and work to change the system that created them.