In 2020, rich nations spent nearly $12trn , more than 31% of their combined GDP, to avert economic meltdown and cushion the effects of the COVID-19 pandemic on their citizens. This ‘fiscal stimulus’ does not include monetary stimulus in the form of lower interest rates and central bank purchase of financial assets.
In stark contrast, their response to the catastrophic economic effects of COVID on so-called developing countries in Africa, Asia and Latin America – described by World Bank president David Malpass as “worse than the financial crisis of 2008 and for Latin America worse than the debt crisis of the 1980s” – has been a kick in the teeth. In November, Ken Ofori-Atta, Ghana’s finance minister, commented that “The ability of central banks in the West to respond [to the pandemic] to an unimaginable extent, and the limits of our ability to respond, are quite jarring… You really feel like shouting ‘I can’t breathe.’”
Poor nations’ ability to respond to the pandemic is also hampered by woefully undeveloped healthcare systems. Average health spending per capita in high-income countries in 2018 was $5,562, 156 times higher than the $35.6 a year per capita spent in low-income countries and 21 times more than the $262 spent per head in ‘developing countries’ as a whole.
