Max Mendez- Parra, April 2020
Management of the COVID-19 pandemic is generating an unprecedented economic crisis. The depth of the crisis remains to be seen but it is by far one of the sharpest ever recorded. All countries are simultaneously being affected, with no one country able to provide any countercyclical demand.
Trade has plummeted, a result of the fall in economic activity, travel bans and lockdowns. The WTO forecasts a fall in global trade of between 13% and 32% in 2020. The fall in commodity prices paints a very dramatic picture of the effect on exports from developing countries; where export of services are also likely to be impacted.
Many countries are exacerbating the situation created by fall in trade by restricting exports of certain items (medical supplies, protective equipment, drugs) with the aim of supporting local efforts to address the pandemic. In this context, countries are adopting controversial and, in some cases, unsuitable measures to address the emergency. Such responses may be ineffective, inefficient and damaging to other countries’ responses.
Photo: International Airport in Kathmandu, Nepal during the coronavirus crisis. Narendra Shrestha/ Asian Development Bank. Licence: (CC BY-NC-ND 2.0)