By 2025, developing countries will be $ 12 trillion poorer due to the COVID-19 pandemic, according to a new report by the United Nations Conference on Trade and Development (UNCTAD). The reasons include problems with the distribution of vaccines.
In its annual report on trade and development, UNCTAD said low-income countries were hit much harder by the COVID-19 pandemic than during the 2008 financial crisis, increasing debt and putting pressure on public finances.
Richard Kozul-Wright, UNCTAD’s director of globalization and development strategy, warned that “over the past 40 years we have witnessed the emergence of a full-blown, global-scale, debt-dependent economy.”
Coronavirus – World Economy
The organization wrote that there was a growing risk that low-income developing countries would be lagged behind due to limited progress in implementing coronavirus vaccines. Projections show that by 2025, developing countries will be $ 12 trillion poorer due to the COVID-19 pandemic.
It has been noted that, according to some estimates, failure to introduce vaccines alone will reduce the incomes of countries in the South – mainly in Africa, South America and Asia – by $ 1.5 trillion.
UNCTAD believes that the global economy has rebounded hard this year, with continued financial support started in 2020 by governments around the world, as well as rapid advances in vaccination in advanced economies. The authority predicts that global growth will amount to 5.3% this year, the fastest pace in almost five decades, after a 3.5% drop. in 2020.
At the same time, it was warned that policymakers in advanced economies have not yet realized the extent of the shock or its persistence in developing countries. Geneva-based UNCTAD wrote that a concerted effort by the rich countries was needed to ensure that poorer countries had debt relief. In some cases, debt cancellation was necessary to “avoid another lost decade of development”.
UNCTAD is a subsidiary body of the United Nations.
Main photo source: EPA / MADE NAKED