Has COVID-19 Exacerbated Economic Inequalities?
Mehul Joshi
Turmoil and turbulence are the two constants in the global financial markets. Periodic fluctuations and macroeconomic volatility create disruptions in international trade and economies. Mankind has been witness to the wreckage caused by the two major economic crises of modern day, the Great Depression and the 2008 Sub-mortgage crisis. Towards the end of 2019, global economies started weakening and a period of economic depression was forthcoming. But there wasn’t the faintest idea that a deadly pandemic was on its way.
The COVID-19 pandemic has stalled public life and created far reaching and long-term impact in all spheres of life. With prevalent economic divide between the different stakeholders of the society, the COVID-19 has not just widened these inequalities but might also reverse the progress made by nations in this field. International financial organizations such as the World Bank, International Monetary Fund, Food and Agriculture Organization of the United Nations, International Labor Organization, etc. have been quick to respond with policy guidelines and funding for mitigating the economic repercussions of the pandemic.
The most basic economic inequality is the urban-rural divide. The pandemic has direct and indirect impact on the populations. Urban areas are disproportionately impacted due to the globalized nature of their economies. Physical distance, relative isolation and lower population density play in favor of rural areas in terms of the direct impact of the pandemic but as the pandemic spreads rural areas with weak healthcare systems and largely informalized employment are hit hardest. There is a failure to comply with lockdown regulations in these regions because of the lack of proper sanitation and healthcare facilities, eminent digital divide and lack of safety net. The poorest of the poor including casual and seasonal workers face a crisis of livelihood. These issues compound the underdeveloped healthcare and information dissemination. Affordability of food resources is a rapidly emerging threat. There is an urgent need to recognize the basic urban bias in the policy formulation and implementation mechanisms of response to the pandemic. Taking due cognizance of the widening urban-rural divide and shaping the response to the pandemic with respect to restrictions of rural areas is the need of the hour. The focus of policy response should be on the most vulnerable: indigenous people and other marginalized groups such as women, the elderly, children and the poorest of poor, including casual and seasonal labor who have insufficient access to productive assets, are without savings and with little recourse.
Conflict and post-conflict regions face an unprecedented burden of risk with countries Burkina Faso grappling for provision of bare minimum subsistence. Yemen, which is facing what has been called the worst humanitarian crisis on the planet, records an estimated 80% of households facing deprivation. Global action to mitigate the pandemic should prioritize Least Developed Countries (LDCs) and countries with ongoing conflict.
Another aspect which deserves attention is the effect of the pandemic on gender economic inequalities. Women bear a disproportionate burden of COVID-19 pandemic not just as health workers but with responsibility for out-of-school children and the sick, reduction in economic opportunities and reduction in access to reproductive and health sector services. There is an urgent need for integration of rural women’s knowledge, voices and leadership in the COVID-19 response given the disproportionate impact on rural women, to ensure that their needs and priorities as producers, processors, traders, wage workers and entrepreneurs, are adequately addressed. The policy response should also address the need for increased availability of sex and age disaggregated data and analysis in order to assess the gendered impact of lockdowns on rural women and men and to design tailored and differentiated response and mitigation measures, as well as monitoring and reporting frameworks.
The COVID-19 pandemic’s impact will mingle with the existing inequalities and widen them. While the privileged exploit the wide array of resources at their disposal, the most vulnerable bear brunt of the pandemic. Considering the pandemic blessing in any manner is a sheer display of mindless privilege. Governments need to be proactive in their response and center it around the poorest of the poor and socially disadvantaged.
References:
FAO. 2020. Social Protection and COVID-19 response in rural areas. Rome. http://www.fao.org/documents/card/en/c/ca8561en
ILO. 2015. Global evidence on inequities in rural health protection. New data on rural deficits in health coverage for 174 countries. https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---soc_sec/documents/publication/wcms_383890.pdf
Garcia Mora, A., and Rutkowski, M. 2020. Remittances in times of the coronavirus – keep them flowing. https://blogs.worldbank.org/psd/remittances-times-coronavirus-keep-them-flowing
FAO, WFP. 2020. Joint WFP-FAO Press Release on Food Insecurity in Burkina Faso. http://www.fao.org/africa/news/detail-news/en/c/1304461/