Giving Compass' Take:

• As COVID-19 devastates the poorest around the globe, economists will have to look for resilience strategies that incorporate inclusive growth and not focus only on macroeconomic health.

•How can donors be part of economic solution-building that is inclusive? 

• Learn more about inequalities and COVID-19. 

The novel coronavirus has made the global economy sick. While the economic costs of the pandemic are certainly secondary to its tragic toll in loss of human life, the financial downturn has nonetheless been devastating for billions suffering from reduced or lost livelihoods around the globe.

The economic malaise caused by the pandemic manifests itself through a variety of symptoms. For instance, the total loss to global GDP due to the pandemic may reach $9 trillion, the equivalent of Germany and Japan’s entire economies combined, and nearly half the world’s workforce has been put at risk of losing their livelihoods.

Among the most concerning and potentially enduring economic effects of the pandemic is inequality. Pandemics tend to have the harshest repercussions for those who were poorest before the outbreak hit, while wealthier individuals rebound more quickly. This has been the case in the current pandemic; though job loss has been indiscriminate, less educated, low-income workers who don’t have the option of working remotely have been particularly vulnerable. The UN estimates that some 1.6 billion of the world’s 2 billion informal workers have suffered “massive damage” to their ability to earn a living.

As economies look toward recovery, it’s vital that success be defined by inclusive growth, not just general macroeconomic health, measured by indicators like GDP.

Read the full article about inequality during the pandemic by Lincoln Wilcox at Christensen Institute.