Developing Nations Face Highest Risks In Easing Coronavirus Restrictions

In this Tuesday, April 14, 2020 photo, volunteers from Lebanese charity Beit el-Baraka, fill boxes with essential food supplies to distribute to the poor, during a lockdown due to the coronavirus, in Beirut, Lebanon... In this Tuesday, April 14, 2020 photo, volunteers from Lebanese charity Beit el-Baraka, fill boxes with essential food supplies to distribute to the poor, during a lockdown due to the coronavirus, in Beirut, Lebanon. Wealthier Western countries are considering how to ease lockdown restrictions and start taking gradual steps toward reviving business and daily life. But many developing countries, particularly in the Middle East and Africa, can hardly afford the luxury of any misstep. Consider tiny Lebanon, a country teetering on the abyss of bankruptcy with a fragile health system, a restless population and no tools for mapping a way out of the pandemic. (AP Photo/Bilal Hussein) MORE LESS
Start your day with TPM.
Sign up for the Morning Memo newsletter

BEIRUT (AP) — As some wealthier Western nations begin easing coronavirus restrictions, many developing countries, particularly in the Middle East and Africa, want to do it too, but they cannot afford the luxury of any missteps.

They lack the key tools — a sturdy economy, well-equipped hospitals and large-scale testing — that are needed for finding their way out of the pandemic.

Even a spirited public debate about an exit strategy, common now in Europe, seems unthinkable in countries battered by conflict, corruption or poverty.

Consider Lebanon, a tiny country teetering on the abyss of bankruptcy with a fragile health system and a restless population. A monthlong lockdown has thrown tens of thousands more people into poverty, pressuring the government to loosen restrictions. But medical resources are limited, prompting doctors to call for continuing them, even at the risk of a social explosion.

It’s the same in many developing countries: Easing lockdowns could increase infections and quickly overwhelm hospitals with limited beds and breathing machines. Keeping restrictions in place risks social upheaval and more economic losses.

At the same time, inadequate testing and a lack of transparency could lead to misguided decisions, said Rabah Arezki, chief economist for the Middle East and North Africa at the World Bank and a senior fellow at the Middle East Initiative.

“I worry that a disorderly release of the lockdown would be doing more harm than good in the context that we are navigating without statistics and relevant data,” he said.

Even wealthy nations have little room to maneuver.

Germany, Europe’s largest economy, announced a slight easing of restrictions, including reopening most shops next week. But Chancellor Angela Merkel cautioned that restarting the economy too quickly could rapidly overwhelm its comparatively robust health care system.

Western nations also face a severe economic downturn, but the impact is softened by massive government rescue programs for businesses and struggling families, including $2.2 trillion in the United States. EU countries have agreed on a $550 billion package and are working on tax breaks and other measures to cushion the impact.

The global community is offering help to poorer nations. The International Monetary Fund said it’s prepared to commit its $1 trillion in lending capacity to needy nations. The world’s richest countries agreed to temporarily freeze poor nations’ debt obligations, mainly in Africa.

Pakistan’s prime minister has gone further, appealing to richer countries and international financial institutions to write off the debts of poorer countries. The IMF gave Pakistan $1.5 billion in emergency financing to help absorb the impact of the pandemic.

In Egypt, the Arab world’s most populous country where one in three people lives in poverty, the government has opted for a partial lockdown that includes a nighttime curfew, fearing a full closure would devastate a fragile economy.

Lebanon has been hesitant to apply for IMF assistance mainly due to reservations by the powerful Hezbollah group that it would come with conditions and encourage political interference.

Even before the pandemic, Lebanon was one of the world’s most indebted countries and struggled to come up with a reform plan that would unlock billions in international aid.

In early March, the government defaulted on its sovereign debt. The currency has lost up to 60% of its value, inflation has soared, and banks have imposed capital controls on cash withdrawals and transfers, putting more strain on hospitals struggling to pay workers.

Firas Abiad, director of the Rafik Hariri University Hospital in Beirut, said the financial crisis also disrupted the import of medical supplies, leading to shortages of urgently needed protective equipment.

Lebanon must expand testing, including in rural areas and refugee camps, and trace patients before restrictions can be eased, Abiad said.

In Yemen, Libya and Syria, where years of conflict have led to humanitarian disasters, there is fear that the scope of the outbreak is unknown due to a lack of testing, supplies and trained professionals.

In Africa, the virus has been confirmed in 52 of 54 countries, and lockdowns appear to be choking the continent’s already vulnerable food supply.

South Africa, with the continent’s most cases, has been able to slow the pace of infections with a strict lockdown that will last at least through April. But Africa’s most industrialized economy was already in recession before the virus, and Finance Minister Tito Mboweni said restrictions must remain until the country can be sure to minimize the loss of life.

In Lebanon, there’s no reliable social safety net. It announced plans to give about $120 per needed family three weeks ago, but even that tiny aid has yet to materialize. Meanwhile, prices have more than doubled and its currency hit its highest pound-to-dollar exchange rate ever this week.

Lebanon was among the first countries in the Middle East to close schools in February, followed by restaurants, and a total lockdown on March 16. Those measures are in place until at least April 26. The country’s prime minister on Thursday urged patience despite the “enormous economic price.”

The IMF projected this week that Lebanon’s economy will shrink by 12% in 2020 — the biggest contraction in the region.

There is concern that anti-corruption protests that began in October might re-ignite with more ferocity as conditions worsen. Small demonstrations already have broken out despite the lockdown. Last month, a Beirut taxi driver set his car ablaze after being fined for violating restrictions. In early April, a Syrian refugee died after setting himself on fire to protest his conditions.

Legislator Assem Araji, who heads parliament’s health committee, urged patience, saying a continued lockdown “is better than an uncontrolled spread of the disease” in a country of 5 million that also hosts about 1 million Syrian refugees.

But Hassan Sharif, a 42-year-old minibus driver from the eastern city of Baalbek, said he lost his income and can barely feed his two children.

“We have reached a level of total despair and will return to the street (to protest), because dying of corona is easier than dying of hunger,” he said.

___

Associated Press writers Kathy Gannon in Islamabad, Pakistan, Andrew Meldrum in Johannesburg, South Africa, and Samy Magdy in Cairo contributed.

___

Follow Zeina Karam at https://twitter.com/zkaram

Latest News

Notable Replies

  1. Avatar for docd docd says:

    They lack the key tools — a sturdy economy, well-equipped hospitals and large-scale testing — that are needed for finding their way out of the pandemic.

    I don’t mean to be flippant here, but it seems to me that having these key tools puts us in the category of “developing”. Under this administration we seem to be going in the opposite way.

  2. My thoughts as well.

    A statistic that I posted yesterday noted that during The Great Recession, the US economy shed 8 million jobs over the course of two years. Yesterday’s unemployment numbers reflected a loss of 22 million jobs in one month. Those numbers are depression-era figures.

    As for our medical system, the US healthcare system is built around them model of maximizing profit. It is not a system built for scale to treat the number of those afflicted with this disease. This is why “flattening the curve” has been a mainstay in our cultural vernacular. If successful, it will ease the strain on our system to fend off collapse.

    Yes, we, as a nation, are moving in the wrong direction, providing a poor reflection of our developed nation status.

  3. In the meantime, first world problems:

    https://finance.yahoo.com/news/the-stock-market-wants-to-embarrass-the-experts-144040527.html

    The stock market wants to embarrass the experts

    Bears looking for a retest of the market lows may soon have egg on their face.

    “Depending on how the market plays out over the next couple of days, this might be all she wrote in terms of a retest,” Sam Stovall, chief investment strategist at CFRA tells Yahoo Finance.

    He says we may have already hit the bottom as the conversation shifts from coronavirus cases to reopening the economy.

    “I see the bottom on March 23, but then I look and I’ve seen, we’ve already had one semi retest, where in a sense we’ve pivoted, come back down a bit, and then worked our way higher. We’re going through that process once again.”

    The Dow (^DJI) is up 26% from its 52-week low, while the S&P 500 (^GSPC) is up 25% from its low on March 23rd. On Thursday The Nasdaq (^IXIC) closed above its 200 day moving average for the 2nd time in three trading session as Amazon (AMZN) and Netflix (NFLX) reached all time highs.

    The rebound comes despite a backdrop of weekly unemployment claims in the millions, a historic plunge in retail sales, and the biggest drop in manufacturing since 1946. Goldman Sachs predicts GDP in the U.S. will shrink a whopping 24% in the 2nd quarter, and rebound in the 3rd and 4th quarter.

    Over the past weeks analysts and investors have warned we are not in the clear yet and to watch out for a ‘bear market trap.’

    “So many strategists are calling for a retest that Mr. Market will try to embarrass the greatest number of strategists at any one point in time,” said Stovall.

    [Read more: Stock market news live updates: stocks pare losses as Netflix, Amazon hit records ]

    ‘The market is just thrilled that now we’re talking about reopening’

    On Thursday President Trump laid out guidelines for reopening the economy. The plan defers to governors the reopening of their state economies. Governor Cuomo of New York has already extended the state’s shelter in place orders until May 15.

    “The market is just thrilled that now we’re talking about reopening because that re-establishes the opportunity for some sort of a V-shaped recovery,” says Stovall.

    The debate among strategists on what the shape of the recovery will look like has been ongoing. One BMO strategist says investors should stop trying to guess the shape of it, that the market still has to digest through the rest of earnings season. This week big banks reported quarterly profit drops as they set aside billions for expected loan losses.

    ”If we end up seeing some sort of an improvement in earnings estimates as the year progresses, then I think, you know, we could actually be seeing a positive second half,” said Stovall.

  4. I’m confused as I’m not sure what our nation is developing into?

Continue the discussion at forums.talkingpointsmemo.com

Participants

Avatar for discobot Avatar for becca656 Avatar for docd Avatar for maximus Avatar for yellowbeard Avatar for rascal_crone

Continue Discussion
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Deputy Editor:
Editor at Large:
General Counsel:
Publisher:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: