Global ‘catastrophe’ looms as Covid-19 fuels inequality

The pandemic has exposed and reinforced deep inequalities across the world, with the true extent yet to be seen, according to a major new report.

The crisis in the poorest countries threatens to escalate into a catastrophe as job losses and food insecurity mount. “The economic, social and political impacts are only starting to unfold,” says Building Back with Justice: Dismantling Inequalities after Covid-19, to be published by Christian Aid later this month.

The number of people facing acute hunger could double to a quarter of a billion in 2020 without urgent support. Some countries have already seen big increases in the cost of food. In parts of Afghanistan, for example, wheat prices have risen 20%.

In India, 80 million migrant workers have lost employment in cities, leaving them hungry and homeless and their families without crucial remittances they depend on.

Routine healthcare, such as immunisation and maternity care, has been severely disrupted. “In many countries, the disruption to non-coronavirus-related healthcare could cause more deaths than the virus itself,” the report says.

Precautions against Covid-19, such as regular hand washing, are more challenging in countries with poor sanitation. According to the report, three billion people – about 40% of the global population – do not have access to a basic hand-washing facility at home. In Ethiopia and Democratic Republic of Congo, Africa’s second and fourth most populous countries, fewer than one in 10 people can wash their hands at home.

Nine out of 10 school students across the world have lost part of their education. Many – especially girls – in poorer countries may never return. “Experience from the west African Ebola epidemic shows school closures led to higher rates of permanent dropout for girls, and to a rise in child labour, neglect, sexual abuse, teenage pregnancies and early marriage.”

The report adds: “There is growing evidence that women are bearing the heaviest social and economic burden during the crisis.” Women do most social care and health work, and tend to work in the lowest-paid roles in these sectors. They are more likely to work in the informal economy, face a heavier care burden at home, and are more exposed to violence at times of economic crisis.

The report highlights the contrast in the way richer countries have mobilised huge sums of money to support their economies with the response of poorer countries already burdened with massive debt. Germany and Italy have spent more than 25% of GDP on economic stabilisation whereas Malawi, Kenya and DRC have spent less than 1%.

The debt repayments of the world’s poorest countries were suspended from 1 May until the end of this year, but Christian Aid is calling for “a comprehensive 12-month cancellation of debt principal and interest for 76 low-income countries”. Debt cancellation, it says, “could be one of the fastest ways to free up resources for some of the countries worst affected by the pandemic and its economic impacts”.

The charity also wants to see a crackdown on tax abuses and tax avoidance, and the introduction of wealth taxes. For example, in India a flat rate 4% wealth tax on 953 ultra-rich families could raise just over 1% of GDP, enabling the government to double its health budget, it says.

The pandemic needs coordinated action at global, national and local levels, but the response has been “characterised more by competition than by collaboration”. The UN and international financial institutions have been sidelined, with governments prioritising national responses.

Recovery from the crisis must be green and sustainable, says the report. “The level of the challenge should not be underestimated. However, the crisis has also demonstrated that governments can intervene decisively when the scale of an emergency is clear and the public supports action. The aim must be to decouple growth from greenhouse gas emissions, and to halve global emissions by 2030 and be carbon free by 2050.”

In a foreword to the report, Jayati Ghosh, a leading development economist, says vision and ambition are needed to prevent catastrophe and “to enable a broad-based and equitable global recovery that radically transforms our economic and social relations, and puts people and planet at its centre.”