The Coming Collapse of the Developing World

In Europe, North America, Oceania and East Asia, the Covid-19 pandemic has been a tragic, wrenching experience, creating more depressed and divided societies. Yet, as we have been gazing obsessively at our own problems, a spectre infinitely worse is emerging in the most populous, fastest growing and least resilient parts of the world.

Covid has caused a deep crisis in the already suffering developing world, which contains nearly half of all humanity. And this will have serious implications for the future of the world economy and political order.

Initially, Covid was something of a rich country’s disease. It started in industrial China and spread to places like the United States, Italy and the United Kingdom. But now none of the wealthiest countries falls within the top 10 worst-hit countries in terms of Covid deaths per capita. In the US, Covid has gone from the leading cause of death to seventh place in just over a year.

According to Bloomberg, the countries now most resilient to Covid and its variants are all among the richest – the United States, New Zealand, Israel, France, the UK and Spain, along with some wealthier East Asian countries, including China. In contrast, the pandemic rages on in Latin America and the backwaters of Eastern Europe. Impoverished Peru has been particularly hard hit, recording a Covid fatality rate twice that of any other country.

At the bottom of the list, according to Bloomberg, lies Argentina, the Philippines, India, Malaysia, Indonesia, Colombia and Pakistan, where on average just five per cent of the population have been vaccinated. We may be seeing the fruits of what the Nation describes as ‘a gargantuan north-south vaccination gap’.

A vaccine apartheid

By June this year, the US and Britain had jabbed half of their populations, and the rest of the EU had jabbed a third. In contrast, the Democratic Republic of Congo, Ethiopia, Nigeria, South Sudan, North Sudan, Vietnam and Zambia had vaccinated between 0.1 per cent and 0.9 per cent of their populations. This is a world lurching towards vaccine apartheid.

Indeed, given the fear Covid-19 instils in people, developing countries in which infections are rife could become like no-go areas for Westerners – places that Western businesses avoid, except to acquire raw materials, such as the minerals that are critical to meeting the climate goals of Western countries.

Even before the pandemic, many economies in the developing world were experiencing difficulty accessing world credit markets, and that access will likely now worsen. Vaccination apartheid will exacerbate pre-existing problems. For example, according to 2019 data from the World Bank, youth unemployment was approaching 25 per cent in Turkey, India and Iran. In South Africa, it was over 55 per cent. Already high levels of youth unemployment will become much higher.

In the mid-2000s, before the financial crisis, there was widespread hope for developing countries. In 2006, Nigeria became the first African country to pay back its debt entirely, while the South African economy, after the end of Apartheid, had been growing at an annual rate of 3.1 per cent. Yet even in the growth years, many African nations did not develop their broad economy. Instead, they became dependent on the Chinese mineral boom. Today, 24 out of the 54 African countries still depend on mining for over 75 per cent of their export earnings.

With the Chinese demand for African resources peaking in 2015, well before Covid, African countries took on large amounts of debt – most notably Zambia, which has now defaulted on Chinese predatory loans. Today Botswana stands as the only African country with a strong credit rating, according to credit agency Standard and Poor. The African Development Bank warns that the continent’s risk of a debt default is increasing.

Covid has had a disproportionate impact on poor people everywhere. But the biggest impacts are being felt in largely impoverished developing countries. As in past pestilences, these impacts are connected to poor sanitation and lower levels of access to healthcare.

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