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The Pandemic Pain of Emerging Markets

Summary:
As COVID-19 continues its global march, the whole world is paying the price for some countries' negligent and incompetent political leadership and the virtual breakdown of the rules-based multilateral order. But emerging and developing economies are likely to suffer the most. CAMBRIDGE – The public-health and economic consequences of the COVID-19 pandemic have varied across countries. This is true even among emerging-market and developing economies (EMDEs), which, compared to advanced economies, have higher poverty rates, poorer health care, and a lower share of jobs that can be performed remotely. How to Prevent the Looming Sovereign-Debt Crisis Teradat

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As COVID-19 continues its global march, the whole world is paying the price for some countries' negligent and incompetent political leadership and the virtual breakdown of the rules-based multilateral order. But emerging and developing economies are likely to suffer the most.

CAMBRIDGE – The public-health and economic consequences of the COVID-19 pandemic have varied across countries. This is true even among emerging-market and developing economies (EMDEs), which, compared to advanced economies, have higher poverty rates, poorer health care, and a lower share of jobs that can be performed remotely.

And yet, surprisingly, COVID-19 infection and death rates have so far been lower in most EMDEs than in the United States and Europe, as Pinelopi Goldberg and Tristan Reed have noted (and as Raghuram Rajan has also pointed out). But this may partly reflect massive undercounting, and in any case the situation is evolving rapidly.

Latin America’s EMDEs have been the worst hit, with those of Southeast Asia the least affected. Vietnam and Thailand, for example, have reported remarkably few cases so far.

Obvious possible reasons why the coronavirus has hit Latin America so hard include the region’s inequality, large and densely populated cities, sizeable informal sectors, inadequate public-health systems, and high levels of internal migration. A less obvious factor is that Latin America has less recent experience of pandemics than East Asia or Africa, where SARS and Ebola have made people more aware of the dangers of deadly viruses and the consequent need for social distancing.

The picture in Sub-Saharan Africa is unclear. Although the numbers of COVID-19 cases and deaths to date are relatively low, owing perhaps in part to the region’s young population, the situation in South Africa is

Jeffrey Frankel
Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

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