ADVERSE EFFECTS OF LOCKDOWN IN TERMS OF FINANCE AND POVERTY LINE
Author: B.A. Pratheshta
The whole world is fighting the second wave of the deadly coronavirus. All the countries went into full lockdown during the first wave and currently, again countries are going into full lockdown to take control over the spread of the second wave of coronavirus. Continuous lockdowns, strict restrictions over normal daily lives have brought enormous economic losses across the world. Though these are the only ways to control the current situation, it is affecting most people below the poverty line and all the people financially. Lockdowns are imposed to control the spread of the virus presently, but in the long term, the days are going to be tough enough to bring back normally and financially, post Covid-19 situation. These times are considered to be black swam events to the world.
World Fighting Covid:
The world is facing a tough time now and in the future after the pandemic, the world is feared to have a tough time financially and the recovery time is estimated too much longer than the original growth. The 2020 World Bank report gave a shocking estimate that over 60 million people across the Pacific and East Asia could fall into poverty and among the four continents over 700 million people would fall below the poverty line. This sends a shiver down our spines.The current pandemic has adversely affected a large number of companies and global markets. The economicshutdowns have brought so many losses in many sectors especially service sectors like tourism, hospitality sector, travel, air crafts, railways, banks, hotels, retail, education, IT, recreation, media, and others have collapsed. These sectors are contributing largely in the developing countries and now a large part ofnational income has drastically reduced in these countries. The total losses incurred around the world are yet to be calculated as the global pandemic is not yet fully over. The world has faced pandemics earlier but the present world is way different from the past. So the comparison between the past and present pandemics is impossible and the same kind of resolutions cannot be made.
PRE-COVID SITUATION OF FINANCE AND POVERTY:
The world was focusing on Sustainable development growth of nations by 2030 with the help of the United Nations. Financing hasalready fallen short to the developing, low-income countries before the pandemic to achieve growth. Revenue from the tax, the major form of domestic public resources and single largest source of development finance, had been insufficient in a large number of countries, particularly in comparison to the Sustainable Development Growth spending, before the global pandemic. As per 2017 tax revenue published data of 124 eligible countries for the official development assistance, more than one third had tax to GDP ratios below 15%, which is a widely considered benchmark for effective state functioning and to promote economic development. The GDP growth in the recent years before the global pandemic had already decelerated in many countries like African countries and few East Asian countries.
Not only the financial conditions of the countries but the people’s living conditions aresuffering. There are people below the poverty line and the unemployment situations were being in existence at large prior to the pandemic. Be it a developed country or third world countries there are certain sections of people being suffered.
POST-COVID- FINANCE AND POVERTY:
The Covid pandemic has made the world market standstill. The manufacturing and supply chain hasbroken, and all trade interlinks around the world are cut down. This in turn has reduced the revenue of the countries. As the countries’ trade connections with other countries were cut off, the nations were forced to work with the limited resources and fiscal space they have. The pandemic has pushed developing countries into greater financial difficulties. It has not only demanded large financing to tacklethe health, social and economic consequences, it has also widened the Sustainable Development Growthfinancing gap. The current pandemic, public health, and economic crises havefurther depleted developing and third world countries’ domestic public resources by reducing their tax and non-tax revenues.
Reduction of government revenue and shutdowns haveheavily impacted the people’s livelihood. As a consequence, the percentage of people below the poverty line has increased. Especially overpopulated countries like India are facing more financial struggles as the government has the responsibility to fight both the health crisis and also protecting people from poverty by providing at least half of their basic needs. The country’s growth may be slowed down as the recovery of all the industries can take time.
COMPARATIVE ANALYSIS OF DIFFERENT COUNTRIES:
Every country is trying to get out of this killing pandemic with all possible measures. Even though half of the world is still battling with this virus few countries have fought successfully to bring back their normal. Few countries like New Zealand, Israel, Vatican City, Seychelles, Fiji, and North Korea are officially corona-free countries with very few cases reported in recent days. On the other the side, India is being the most affected and has the highest number of cases reported every day. The main reason for the spread of the virus in India can be various factors. They may include, overpopulation, less awareness, people’s carelessness, and most importantly the financial difficulties of the people, struggling for their daily livelihood. The pandemic not only has affected the country’s economy but also increased the poverty crisis.
The main difference between the lesser cases reporting countries and India isthe level of the country’s availability of resources for the people and the poverty level in the country. As the poverty level of the country is high shutdowns are making the situation even worst.
India has a very big task of battling this health crisis along with the financial and poverty crisis. The government has to ensure that every person below the poverty line gets the basic needs to keep them calm at home. Staying home for few weeks and avoiding going out without any emergencies is the only hopeful remedy to tackle these difficult times. The frontline workers, doctors, officers, and police are putting their life at stake to save ours. The help we can do to them is to stay home and break the chain of spread. These times shall too pass.
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