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Florida as a Developing Country

Summary:
During the first waves of the COVID-19 pandemic in Asia and Western advanced economies, there was a clear pattern of lockdown, containment, and gradual economic reopening. But now a third pandemic wave has brought a new, more disturbing pattern to both developing countries and major US states. MILAN/HANGZHOU – The COVID-19 pandemic has arrived in waves, starting in Asia, where it quickly spread from mainland China to South Korea, Hong Kong, and Taiwan. These governments all reacted quickly with aggressive tracking, tracing, and containment programs, and China induced a massive but short-lived economic contraction to stop the virus more or less in its tracks. Meanwhile, a second wave, now in its middle to late stages,

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During the first waves of the COVID-19 pandemic in Asia and Western advanced economies, there was a clear pattern of lockdown, containment, and gradual economic reopening. But now a third pandemic wave has brought a new, more disturbing pattern to both developing countries and major US states.

MILAN/HANGZHOU – The COVID-19 pandemic has arrived in waves, starting in Asia, where it quickly spread from mainland China to South Korea, Hong Kong, and Taiwan. These governments all reacted quickly with aggressive tracking, tracing, and containment programs, and China induced a massive but short-lived economic contraction to stop the virus more or less in its tracks.

Meanwhile, a second wave, now in its middle to late stages, has swept mostly through the developed economies of Europe, North America, and Oceania. As in Asia, there has been variation in containment approaches and results across countries; but, generally speaking, most of these governments responded late, allowing the virus to spread widely before introducing countermeasures.

In any case, the pandemic has followed a clear pattern in both first- and second-wave economies. After a sharp economic contraction (phase one) comes a trough (phase two), when the virus’s rate of spread is reduced to the point that recoveries exceed new confirmed cases. Then comes a period of gradual, sequenced reopening, with precautions to contain the virus remaining in place (phase three).

Florida as a Developing Country

The pandemic’s third wave, however, has taken a different shape, and is raising serious concerns. Though it arrived later, it is quickly sweeping most of the developing world, home to two-thirds of the global population. Moreover, this wave, which now accounts for over 60% of confirmed new cases, has left an alarming number of highly populous countries stuck in the pre-phase three period of the “pandemic economy,” with the economic and public-health crises both essentially spinning out of control.

Florida as a Developing Country

The apparent difficulty in controlling the spread of the virus even with sustained periods of economic contraction is a unique and disturbing feature of the third wave. And as Figures 2 and 3 show, it can be found in a wide range of countries in Asia, Latin America, and Africa.

Florida as a Developing Country

In most developing countries, a significant proportion of the population lacks the resources to withstand an extended economic lockdown, and the government’s fiscal capacity to provide a buffer is limited, sometimes severely. As a result, many of these countries will have no choice but to begin reopening their economies regardless of whether the virus has been contained.

Despite the tragedy that is unfolding across the developing world, the third wave has received somewhat less attention than the crisis in the United States, where aggregate nationwide data obscure the fact that there are now two pandemic economies within the US, each with a very different pattern....

Michael Spence
Nobel Prize in economics, Economics professor at Stern School of Business NYU, author of The Next Convergence

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