2020: The Year Defined By Covid-19

As a year of COVID-19 crisis draws to a close the world remains nowhere near finding a definitive treatment, or providing long-term protection, against the disease. The relatively rapid development of a handful of vaccines that have proven to provide protection against the infection has been a sliver of silver lining amid the grim scenario. But the virus has also proven to be more versatile and resilient, with more than 12,000 mutations in its genome catalogued by researchers since the virus first appeared.

The ultra-microscopic virus has on its own managed to disrupt the launch of two major global events in 2020 — the Summer Olympics in Tokyo and the World Expo in Dubai — both of which have now been postponed to next year. The virus has also strained the health capabilities of nations and devastated the global economy.

A year of living under the oppressive shadow of the virus is clearly sapping the resources of the international community. No wonder then that the rollout of the Pfizer-BioNTech vaccine in the United States and a few other countries, as well as vaccines developed in Russia and China, have been readily accepted by people wherever it is available. The world appears willing to grasp even the thinnest straw offered, as long as it promises a way out from the crisis.

However, while a select-few have already been administered the vaccine, or are in the process of receiving it over the coming weeks, to the vast majority of the global population the chances of receiving a vaccine anytime soon probably remains as remote as it was at the start of the pandemic. The world is still awaiting an effective, affordable and easily available vaccine that provides long-term protection against the virus, or for some breakthrough treatment that could offer effective treatment for those already diagnosed with the disease. In the meantime, the virus continues to remain potent, infecting millions and extracting a heavy toll on human life.

Latest available data indicates that globally the virus has so far infected more than 80 million people, led to the death of over 1.75 million, and left tens of thousands in serious or critical condition. In Kuwait we have had nearly 150,000 infections and around 926 deaths from the virus so far. While the infection and death rate in Kuwait appear relatively low, for a country with a population of around 4.8 million people the numbers are quite significant.

The high level of infection relative to population also raises inconvenient questions on why the impact of the virus has been higher among the economically weaker section of society, especially blue-collar expatriate workers. Perhaps it is time to reevaluate social policies that confine many expatriates to reside in congested and unhealthy living conditions, as well as examine the drawbacks in not providing access to free healthcare for the less privileged members of society.

Nevertheless, in Kuwait, we are also lucky to be among the few countries that have begun to administer the Pfizer-BioNTech vaccine against COVID-19 to the entire population free of charge. The vaccination campaign that began on 24 December is expected to continue as more vaccines arrive in batches over the next full year. This initiative on the part of Kuwait is acknowledged as a continuation of the country’s globally accredited humanitarian traditions, and is considered as a right step in the right direction that needs to be emulated by more nations.

Meanwhile, heightening the prevailing dire statistics on COVID-19 is news that just as the first wave of infections appeared to be receding in some countries, a second more potent wave has emerged in Europe and elsewhere. And, even as the second wave swings a lethal scythe across several nations, a new variant of the virus that spreads more rapidly than the earlier version has been identified in Great Britain, and has since spread to a few more countries.

If anything, the pandemic has highlighted the urgent need for effective, accessible and affordable healthcare for everyone everywhere. While this still remains a distant dream, the need for such an affordable and universal healthcare has never been more apparent. Data from the World Health Organization and World Bank Group show that even before the crisis began, people in developing countries paid over half-a-trillion dollars out-of-pocket for health care. This costly spending causes financial hardship for more than 900 million people and pushes nearly 90 million people into extreme poverty every year — this dynamic has now been exacerbated by the pandemic.

While the headline news and emphasis has been mainly focused on health aspects of the pandemic, its impact on the global economy and its repercussions on the livelihoods of people around the world have been no less severe. Many emerging and developing economies, which were already experiencing weaker growth before the arrival of the virus, are predicted to suffer the brunt of the economic headwinds arising from the crisis.

Emerging and developing country economies are expected to be buffeted by increased pressure on their already weak health care systems, loss of trade and tourism, reduced remittance inflows, subdued external capital investments, and tight financial conditions amid mounting debt. The economic shock of COVID-19 amplifies the challenges faced by these economies, said the World Bank Group in its assessment of global economies in the wake of the pandemic.

The COVID-19 crisis is now being considered as having caused the deepest global recession in history, with the baseline forecast by the Bank envisioning a 5.2 percent contraction in global GDP in 2020. Most countries are expected to plunge into recession in 2020, with per capita income contracting in the largest fraction of countries globally since 1870.

In its June analysis, the World Bank noted that despite the extraordinary efforts of governments to counter the downturn with fiscal and monetary policy support, the ongoing crisis is likely to reverse years of progress toward development goals and push between 88 and 115 million people into extreme poverty this year. At the height of the pandemic more than a third of the global population had their mobility curtailed due to lockdowns and curfews, which in turn led to severe economic repercussions worldwide.

Unlike past economic recessions or financial crises, the current economic predicament was fueled by disruptions to both, the supply and demand side of the economy. On the supply side, infections reduced the availability of labor supply and impacted productivity, while concomitant breakdown of supply chains through lockdowns, business closures, and social distancing pushed retail supplies into disarray. On the demand side, layoffs and the loss of income from cuts and suspension of salaries, as well as unemployment from work loss, worsened economic prospects, depressed consumer sentiment, and reduced household consumption, as well as dampened investment in firms.

As millions of people across the world join the ranks of those under extreme poverty, it is important to note that remittances — the money that migrants send to their home countries — which play an increasingly important role in alleviating poverty and sustaining growth in many developing countries, have also been acutely affected by the crisis. According to a brief on Migration and Development published by the World Bank, as the COVID-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14 percent by 2021 in comparison to 2019.

Remittance flows to low and middle-income countries (LMICs), which reached a record high of $548 billion in 2019, are projected to fall by 7 percent to $508 billion in 2020, followed by a further decline of 7.5 percent to $470 billion in 2021. The main factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries; weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

As remittances decline, experts fear that poverty will rise, food insecurity will worsen, and households risk losing the means to afford services like healthcare. Along with these declines in remittances, the number of international migrants is also expected to fall in 2020, for the first time in modern history, primarily due to slower new migrations and an increase in reverse migrations. Over the longer horizon, the falling remittances and deep recession are expected to leave lasting scars on the global psyche.

The impact of the virus on human capital development through its effect on education has been another major casualty of the crisis. Temporary school closures in more than 190 countries have kept nearly 1.6 billion students out of school, with estimates that 94 percent of the world’s student population, and up to 99 percent in low and lower-middle income countries have been affected by school closures.

While most countries have made efforts at launching remote and remedial learning strategies, learning losses are expected to accumulate, resulting in not only short-term learning losses, but also this generation of students will face the prospects of diminished economic opportunities in the long-term. A recent study on national education responses to COVID-19 conducted jointly by the United Nations Children’s Fund, UNESCO and World Bank shows that students currently in school stand to lose US$10 trillion in labor earnings over their work life. Preventing a learning crisis from becoming a generational catastrophe requires urgent action from all.

The COVID-19 crisis highlights the need for global coordination and cooperation on all fronts in order to achieve public health goals, protect vulnerable sections of society, and enable a robust and sustainable global recovery. We need to strengthen health services through universal healthcare coverage; revive economies through targeted stimulus packages, including providing support for the private sector; getting money directly into the hands of people, and sustaining economic activity with support for households, firms and essential services.

Though a vaccine against the virus has now been developed, policymakers need to be aware that there is no vaccine against the fear and uncertainty of economic fallouts. Unless countries work towards preventing economic decline, its impact could outlive the health crisis caused by COVID-19.

 

SOURCE TIMESKUWAIT

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