ROME -- As the world continues to grapple with the coronavirus disease 2019 (Covid-19) outbreak, millions in the poorest countries have become more vulnerable to the economic downturn and food insecurity, UN experts warn.
The World Food Program (WFP) said the economic outlook — and risks of food insecurity — continues to darken because of effects of the coronavirus pandemic, posing further threats to regions in Africa that are already battling extreme poverty.
An estimated 265 million people could go hungry in 2020, nearly doubling 2019 figures, according to latest WFP’s forecasts.
Experts explain the way the global economic downturn is affecting low-income economies is that it is becoming “increasingly visible” and acts through different channels.
“Countries depending heavily on tourism, remittances, food imports or primary commodities exports are going to face a dire situation,” Susanna Sandstrom, head of the WFP Economics and Markets Unit, told Anadolu Agency.
She noted most vulnerable countries are those hit by not just one, but several damaging factors at the same time, and will not be able to protect themselves.
Key economic effects
The first factor hurting vulnerable economies is the price of primary commodities, which have plunged as the price of crude oil fell to record lows, cutting export earnings vital for large parts of the developing world.
The second is tourism, which contributes significantly to foreign exchange earnings in many fragile countries.
The UN World Tourism Organization expects international tourist arrivals to decline by as much as 30 percent in 2020, hitting countries in developing areas that base their economies on the flux of foreign tourists.
Remittances — the third key channel through which the economic downturn reverberates on poor countries — are responsible for up to 30 percent of gross domestic product in low-income economies and are expected to fall dramatically, as they did during the 2008 economic crisis.
Economists expect the flow of foreign direct investments to shrink by up to 40 percent in 2020.
The other key factor impacting the poorest countries is the dependence on food imports, which leaves those relying on imports exposed to the economic downturn and increased food insecurity.
That puts upward pressure on domestic prices at a time when households’ purchasing power is tumbling due to the large percentage of income lost amid the crisis.
The Covid-19 pandemic and forced lockdowns that followed, is taking a heavy toll globally in terms of unemployment.
The International Labor Organization (ILO) estimates a reduction in working hours in the second quarter of 2020 that is equivalent to 195 million full-time workers.
“Those people who were already living below the international poverty line, now are also losing their jobs. Those are the ones who risk the highest damage,” said Sandstrom.
She stressed economic insecurity, due to the stopping of remittances and job loss, translates into food insecurity, which is also aggravated by increasing food prices.
“The areas at highest risk are mostly countries in Africa that were already facing economic problems and food insecurity,” said Sandstrom, citing South Sudan, Nigeria, Angola and the Middle East.
She noted the struggling population of refugees living in camps is particularly exposed to sanitary and the economic effects of the pandemic, which are often combined with other distressing factors.
“This is happening for instance in Bangladesh, where the pandemic crisis has coupled with the monsoon season,” she said.