The current outbreak of the novel coronavirus (COVID-19) has completely shaken up Asian societies. The economies of the nations were in shambles, and billions of working poor were on the brink of an economic collapse. Several countries in the Asian region are under complete or partial lockdown.The economic activities came to a standstill causing innumerable hardships on the lives of the people.
A nightmarish future is awaiting the poor in Asia. The World Bank’s report predicted that East Asian economies would contract by 0.5%, with China’s growth slowing down to 0.1%. Poverty has always been a major problem in Asia. About 35% of the world’s poorest people are living in Asia; the corona pandemic would do unprecedented havoc on those people.
According to the World Banks’ prediction, the corona pandemic would push another 11 million into poverty. South Asia, the region comprising the most vulnerable sections, would be the hardest hit.
Urgent and innovative measures were needed to protect people and prioritizing a nation’s resources to meet the current health emergency.The domestic governments were mobilizing resources to healthcare systems.
For instance, in Singapore, the consumer bank DBS announced complimentary insurance coverage and home-loan-payment relief for employees in affected industries and gave support packages for small and midsize enterprises. It also provided a free insurance policy for COVID-19 hospital expenditure along with special services like online consultations with doctors.
China set up tens of thousands of hospital beds with thousands of doctors. Around $142 billion, i.e., 1% of GDP, was released to spend on building public infrastructure and to help the redeployed and affected laborers. South Korea followed the practices of widespread testing, tracking, and isolating and monitoring the transmissions. Singapore also spent two stimulus packages of $38 billion, which was about 1% of GDP.
How was the response of international institutions, such as the United Nations, World Bank and International Monetary Fund, since the outbreak of coronavirus? Truly, it was very distressing and disappointing.
The 193-member United Nations General Assembly (UNGA) and the 15-member United Nations Security Council (UNSC) did not take up the issue in an earnest manner. On March 3, the World Bank announced a package of $14 billion to assist countries to respond to the health emergency. On April 2 it assured a “first set of emergency support operations for developing countries around the world, using a dedicated, fast-track facility for COVID-19 response.” But these announcements came only after three months of the coronavirus outbreak, when millions of people were already infected and thousands of people died.
The Bank also noted that it “is prepared to deploy up to $160 billion over the next 15 months to support COVID-19 measures that will help countries respond to immediate health consequences of the pandemic and bolster economic recovery.” While the pandemic is currently spreading and attacking the people, it is ironical that the Bank talks of a plan “over the next 15 months”! Only in April’s first week, the Executive Board of the International Monetary Fund (IMF) announced the disbursement of about $147 million to meet “the urgent balance of payments needs stemming from the COVID-19 pandemic and the terms of trade shocks.”
The somewhat indifferent attitude of these global institutions originated from their historical inclination towards the big corporate-dominated powerful nations, such as the US. The governments of the third world were subservient to the dictates of these institutions. It was now evident, with the surge of COVID-19, that their capacity to react to health emergencies was crippled.
The World Bank’s Pandemic Emergency Financing Facility (PEF), the pandemic financing instrument, was devised in 2017, to save the people and the economies during a pandemic outbreak. Bangin Brim and Clare Wenham, in their analysis, said that the World Bank’s pandemic financing scheme serves private sector interests at the cost of global health security and noted that PEF had paid $114.5 million to private investors as coupons, mainly financed through public funders.
Such ways of disbursement of funds raised serious questions over these institutions whether they were serious in helping the people at the time of emergencies.
While the governments of the developing countries were battling the surging outbreak, the main stumbling block that they were facing was the much-weakened health systems in their own countries. This was the consequence of the implementation of the prescriptions of these financial institutions, like IMF-imposed fiscal consolidation, the Bank’s recommendation of public-private partnerships, encouraging private sector involvement in healthcare and cuts in social spending. According to the Health Expenditure Report 2019 by the World Health Organization, the low income countries were spending only US$41 a person in 2017 for health and it was US$2,937 in high income countries. The steady decline of the health expenditure was in response to the structural adjustments programs of the World Bank and IMF .
The middle and low-income countries had external debt of around US$6 trillion.The poorest countries with Gross National Income per capita of below US$1,175 have actually doubled external debt since 2008. Even now, the concerned institutions do not bother about the demands of debt alleviation and immediate waivers on interest payments for 2020.
Henry Kissinger recently called for rulers to prepare to transition to a post-coronavirus world order. In this context, it could be recalled what Noam Chomsky said about the former National Security Adviser while referring to US bombing campaign in Cambodia in 1970: “Henry Kissinger would certainly be brought to trial for his role in the bombing, if the world were governed by justice, not forces.”
The Kissinger era created unjust, reckless world order with numerous institutions that were insensitive to peoples’ hardships. On many occasions, such global order had failed to save the people from their sufferings. The emerging new order should be a humane order with justice and equality as core principles.
N. Gunasekaran is a political activist and writer based in Chennai, India.
From The Progressive Populist, May 15, 2020
Blog | Current Issue | Back Issues | Essays | Links
About the Progressive Populist | How to Subscribe | How to Contact Us