Global growth outlook remains unpredictable amid the COVID-19 pandemic crisis. 2019's global growth rate stood at 2.9 percent, according to a research paper.
The paper was issued by Mahmoud Mohieldin, the UN special envoy on financing the 2030 Agenda for Sustainable Development, who sent it exclusively to Ahram Online.
The research noted that the crisis resulted in the loss of more than 300 million jobs and a decline in global trade ranging between 13 percent and 32 percent.
It also anticipated remittance flows to developing economies to drop by 20 percent, private portfolio flows to fall by over 80 percent, and foreign direct investments (FDI) to decline by 35 percent.
The total emerging markets' debts hit $71.1 trillion by the end of 2019, up from $67.7 trillion in 2018, which is a cause for concern for such markets amid the crisis, according to the paper.
Collapsing oil prices, increasing unemployment rates, and declining FDI flows to those markets because of the crisis have added to their woes, continued the paper.
Pointing out the recovery efforts, Mohieldin said that when an economy reopens it must do so while managing the health aspects extremely carefully with enhanced testing, tracing, and quarantine, and markets must be prepared for additional public spending.
He added that key support is needed to micro, small, and medium enterprises as well as the informal economy, while the design of universal basic income (UBI) should be linked to employment and social protection policies.
UBI is a model for providing all citizens of a country or a geographic area with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.
Mohieldin asserted in the paper the need to invest in three key sectors for emerging markets to survive: human capital, resilience, and infrastructure.
The paper highlighted how the COVID-19 crisis imposes a “new normal” that all the globe must adapt to, noting that post the pandemic global megatrends are going to shape a new and different world.
These megatrends include demographic transitions, fast urbanisation, climate change, shifts in the global economy, market volatility, commodity cycle, fragility and violence, techonological changes, controversry regarding geopolitics and globalisation, in addition to pandemics, communicable and non-communicable diseases.
The new normal also includes adapting to a new world that must head to digitalisation, localisation, standardisation, and setting new regulations.
Recovery from the repercussions of the pandemic is faced by a number of obstacles, including trade protectionism, restrictions on investment and capital flows, populism and labour movement, according to the paper.
The paper said that eight out of the 17 Sustainable Development Goals (SDGs) in emerging markets have been affected, including loss of income that is pushing families into poverty.
Poverty and food supply disruption increase hunger, while hundreds of millions of children are out of school with many without access to remote learning. Moreover, violence against women at home has increased.
Additionally, unemployment has increased particularly for migrant workers or in sectors that were perhaps already treated unequally.
Populations in urban areas, notably slums, face higher risks of exposure. Commitments to environmental action have been suspended, and those in conflict zones are at risk of devastating losses.
International cooperation for the fulfillment of the SDGs is being tested amid the crisis, especially that the current conundrum is a result of neglecting one of the major SDGs, which is boosting healthcare.