The COVID-19 pandemic has shaken the world unlike any other crisis in recent history. During 2020, world gross domestic product (GDP) fell by 3.3%, the deepest global recession in 70 years, with an estimated loss of 255 million full-time employment jobs and an additional 97 million people falling into poverty. The effects were especially severe in developing and emerging industrial economies, which suffered an average estimated output loss of 7.7% compared to 3.9% for industrialised economies, according to the UNIDO Industrial Development Report 2022. Within countries, SMEs were more likely to shut down operations than large firms and suffered larger declines in sales and profits. Across workers, women experienced greater labour-market losses than men.
By Haje Schütte, Senior Counsellor and Head, Financing for Sustainable Development Division, Development Co-operation Directorate, OECD
When scientists announced the discovery of a Covid-19 vaccine, the world sighed with relief. But soon after, many people around the globe discovered that others would get access to jabs faster than them. The sad term ‘vaccine inequality’ was coined. Only 6% of people are fully vaccinated in low-income countries today. In a bid to fill the gaps and curb the pandemic, there were calls for high-income countries to share and donate vaccine doses to developing countries, in particular through the COVAX Facility – the multilateral mechanism for providing developing countries with vaccines.
By Zhang Laiming, Vice President and Research Fellow of the Development Research Center of the State Council of the People’s Republic of China
In the fight against COVID-19, the most pressing priority is to bridge the global vaccine divide. While 71.56% of the population in high-income countries have been fully vaccinated, the same can be said for only 4.89% of people in low-income countries. As long as the vaccine divide exists, the coronavirus will not stop spreading and mutating, and no country will be safe. To this end, countries must work together. So, what needs to be done in the near future?
By Daniel Prinz, Research Economist and Country Programme Manager at the Institute for Fiscal Studies(IFS) Centre for Tax Analysis in Developing Countries (TaxDev)
Given the massive impact of the COVID-19 pandemic on public finances globally, it is little surprise that the IMF’s October 2021 forecasts of debt and debt servicing costs in sub-Saharan Africa are substantially higher than was projected in October 2019 (Figure 1). Many countries in sub-Saharan Africa may need to impose fiscal consolidation measures to enhance the sustainability of their public finances even before their economies have fully recovered from the pandemic. The need for higher public revenues is an opportunity for countries to make their tax systems more efficient and equitable, particularly through well-designed green taxes, property taxes and rationalised tax expenditures. Getting these reforms right will be essential to ensure they do not slow the recovery and that they are socially and politically acceptable.
By Rachel Thrasher, Researcher, Boston University Global Development PolicyCentre
By only granting a 13-year extension in a critical time for economic recovery from COVID-19, Members of the World Trade Organization may be creating more severe challenges for Least Developed Countries and the global economy down the road.
Without much fanfare, on June 29, 2021, the member countries of the World Trade Organization (WTO) quietly agreed to extend the transition period for least-developed countries (LDCs) to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) for another 13 years.
The recently granted extension falls substantially short of what was requested, though it is slightly longer than the previous two nine-year extensions. The news has received relatively little attention in the midst of negotiations for vaccine access and pandemic fears about new vaccine-resistant variants, but to be sure, the failure to acknowledge the need for a longer-term transition period has substantial impacts for LDCs’ development trajectories.
By Ambassador Dr Mohan Kumar, Chairman, RIS, Dean/Professor, Jindal Global University, Sonipat, India, Former Indian Ambassador to France1
It is a truism that the European Union (EU) welcomes, prefers and supports a multipolar world; a strategic world view that is fully shared by its partners like India. More fundamentally, it is in the interest of the EU and its like-minded partners to ensure that the international order is not underpinned by a G2 system of government where the rules are essentially shaped by the US and China. This, however, entails the EU being strong enough to occupy an independent pole in the multipolar system. The EU is not quite there yet, but its friends and partners will certainly wish this to occur, sooner rather than later.
By José Antonio Ocampo, Professor at Columbia University and former UN Under-Secretary-General for Economic and Social Affairs and Finance Minister of Colombia
The decision of the IMF Board last Friday to approve the allocation of $650 billion in Special Drawing Rights (SDRs) is excellent news for the world economy. This proposal had been on the table since the early phase of the COVID-19 crisis. It was vetoed by the United States under the Trump administration, but endorsed by the Biden administration, who proposed the magnitude of the agreed allocation.
By Dražen Kučan, Sector Lead / Senior Urban and Energy Efficiency Specialist, Green Climate Fund
Guilty as charged: cities and urban populations are among the core drivers of anthropogenic climate change. Cities produce between 71% and 75% of total greenhouse gas (GHG) emissions1. There needs to be a ‘paradigm shift towards low emission and climate-resilient development pathways’. A shift that can happen in developing countries by supporting and investing in high impact climate mitigation as well as resilience and adaptation initiatives.