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Corona pandemic: recession gives the world an even bigger catastrophe

by drbyos

FAt least 80,000 people worldwide have died of Covid-19, the disease that is caused by the novel corona virus. That is the status of April 7th, and there will surely be many thousands more in the coming weeks, despite the radical measures that are in effect almost everywhere in the world.

However, far more people will die from the economic consequences of these measures than from Covid-19 itself. Various aid organizations point out that take care of the poorest in the world. Forecasts now predict 35 to 65 million people who will slide into absolute poverty as a result of the global recession. And many of them face starvation.

Around a third of humanity is currently no longer allowed to work. As a result, the global economy has been largely idle for weeks, and the forecasts now look correspondingly devastating. The rating agency Fitch, for example, assumes that German economic output will collapse by 3.8 percent this year, the decline in the euro zone could be 4.2 percent, and still 1.9 percent worldwide.

Source: WORLD infographic

Other forecasts come to similar values, some are a little more optimistic, others even more pessimistic. However, one thing is certain: The global economy will not grow by around three percent this year, as originally expected, but will at least stagnate, probably even shrink.

These are abstract numbers. But behind it are billions of individual fates. Hundreds of millions of people are no longer able to work in Germany and other western industrialized nations, but they are often replaced by at least part of their salary by the employment office Short-time work allowance.

However, such aid does not exist in many developing and emerging countries. In India, millions of day laborers from the cities were sent back to their villages; in Indonesia, Thailand or South Africa, hundreds of thousands lack the income from tourism. And they don’t get any help. They now have to live from their savings – which they usually don’t have.

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Consequences of the corona pandemic

According to Welthungerhilfe, around 820 million people worldwide are already suffering from hunger. “People have already had no reserves due to droughts or floods in recent years,” explains Mathias Mogge, Secretary General of Welthungerhilfe. The already difficult food situation is now exacerbated by the measures taken to contain the pandemic. “They will exacerbate the global hunger situation and destroy many livelihoods.”

The international Catholic mission mission Missio is already receiving dramatic reports from its local helpers, for example from Mumbai, where sisters organize meals for hungry children and their families during curfews. “There will be more starvation deaths than corona victims,” ​​warn the helpers.

The situation is exacerbated by the fact that Food prices have increased significantly in recent weeks. “There are also signs that individual countries are restricting the export of agricultural products,” says Roukaya Ibrahim, strategist at the analysis house BCA Research. Vietnam, for example, has temporarily suspended rice exports. At the same time, global demand is increasing, also because of the hamster purchases in many western countries. This exacerbates the situation.

Source: WORLD infographic

The International Food Policy Research Institute in Washinghton has tried to figure out how many people will ultimately be in need due to the global recession. The scientists use a model that in an extensive study was developed and based on an analysis of 300,000 households. Building on this, they conclude that for every percentage point by which global economic growth declines, the number of people in absolute poverty increases by 1.6 to three percent.

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People who live on less than $ 1.90 a day are considered to be living in absolute poverty. This amount is adjusted for purchasing power, so it is taken into account that significantly more can be bought in poorer countries than, for example, in this country. However, $ 1.90 is considered the bare minimum to survive without suffering from hunger.

As global growth will decline by at least three percentage points this year, the number of people who have less than this subsistence level should increase by 4.8 to 9 percent. That corresponds to around 35 to 65 million people worldwide. As a result of the global economic crisis, they are also acutely threatened by hunger.

Source: WORLD infographic

The range of estimates can be explained with different assumptions. If the crisis is limited, for example, to the fact that people can no longer work, the number is likely to be at the lower end. If at the same time a large part of the economy is idle and there are also restrictions in global trade, the upper limit is more likely to be reached.

In any case, the worst hit is the countries south of the Sahara. Almost half of the people who will slide into extreme poverty live here. South Asia, and with it India in particular, is the second particularly badly affected region.

That is why there are now initiatives to mitigate the consequences for developing countries. Norway, for example, has brought into play a UN aid fund that is to be financed by the richer nations. His country is ready to participate, said Norwegian Development Minister Dag-Inge Ulstein. UN Secretary General António Guterres has also called for solidarity with the poorest countries.

The World Bank and the International Monetary Fund, in turn, have made a joint appeal to the G20 countries, their poorest Debts to be enacted or at least deferred so that they would have the means to mitigate at least the worst consequences of the crisis.

So far, however, there have been few reactions. No wonder, the industrialized nations concerned are concerned with their own crisis. Therefore, the only thing that could help the poorest in the world would be if the economy in the rich nations and thus globally got back on its feet as quickly as possible.

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