The COVID-19 Pandemic Threatens to Erase the Bridge Between Rich and Poor Nations

Source: WSJ

The disparity between rich and poor countries has only been expanded by the COVID-19 pandemic, with less developed countries expected to take years to bounce back to their 2019 levels.

• Richer countries have already started to rebound due to their access to COVID-19 vaccines and government assistance for businesses and workers with the lockdowns.
• Meanwhile, developing nations are likely to take years for them to rebound to 2019 levels, with the International Monetary Fund dubbing the gap “the great divergence.”
• The divergence threatens to erase the gains recorded in developing economies which posted faster growth than richer countries in the first decade of the century.
• The widening gap is reflected in the drop of remittances to developing countries, as countries imposed lockdowns and caused unemployment to increase.
• This is expected to increase individuals in extreme poverty or those living with less than $1.90 a day, as defined by the World Bank.
• Economists believe the pandemic will hit the capacity of poorer countries for growth, along with gender equality efforts.