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.