We are witnessing unprecedented explosion in bankruptcies and an economic collapse in the developed world due to pandemic lockdowns. People insistent that the economic damage is worth it in order to save a relatively small number (if indeed this saves them) of lives will pooh-pooh those greedy souls who dare to point out how the cure for COVID-19 may very well be worse than the disease understate the number of very real domestic deaths which will happen due to coming depression.
One thing we are hearing nearly nothing about is how this world pandemic lockdown is going to impact developing nations.
As can be seen in the chart above, we had been doing very well for over 30 years in reducing extreme poverty. Starvation as a cause of death has been dropping throughout the world as well as death due to poor water supplies and lack of medicine.
There is still a long way to go but the world is in a best place as far as extreme poverty is concerned that we have seen in all of human history.
That is all about to change as pandemic shutdowns send a ripple effect through world trade chains which will decimate those fragile developing nations who were just starting to pull themselves out of extreme poverty.
The trend we are already seeing emerge among developed nations is a contraction in purchases in general and a stronger focus on domestic production and purchases. This makes sense from the perspective of putting local people back to work and we desperately need to do so. What will this do to the nations who used to supply us though?
Bangladesh is always right on the brink of starvation due to flooding and overpopulation. They have managed to become a major exporter of textiles however and that has allowed them to ease the poverty pain. When those exports collapse (and they will), what do you think will happen?
How about the favorite luxury good for hipsters, the avocado? Mexico, Peru and Indonesia are the world’s prime exporters of avocados. What will happen to their economies as 100 mile diets truly become the trend?
Rwanda is dependent on the export of rare metals. It doesn’t look like Niobium, Tantalum, Vanadium and Zirconium Ores are going to be high in demand for awhile.
Dozens and dozens of developing nations around the world had been climbing out of extreme poverty due to only a handful of select exports. It had been helping them but it had been dependent on wealthy European and North American markets in order to prosper.
The massive poverty caused by the world pandemic shutdown won’t simply kill people due to malnutrition and disease. The social disorder due to the poverty can and very well likely will cause millions more deaths as countries fall into mob rule and civil war. Particularly African nations. The only thing which has kept a lid on slaughters within some of those nations has been governments fearing world economic sanctions against them. If those dictators no longer have anything to lose, things are going to get ugly.
The consequences of the world shutdown due to pandemic fears are just beginning to be felt.
It is hard enough to look at the local economic devastation but it is horrific to think of the damage being wrought on developing nations. It will take a generation to bring those nations back to where they were but a year ago.
The world needs to do a very real cost/benefit analysis right now on the pandemic shutdowns and we shouldn’t forget to take the world’s truly most vulnerable into account when doing it.
So far the silence has been deafening on how the shutdown is impacting the developing world. Probably because most of us simply don’t want to think about it.