How will poor countries cope with COVID-19?

Chicago Booth’s Raghuram G. Rajan discusses the challenges of confronting an outbreak in the developing world

Mar 30, 2020

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Collections COVID-19 Crisis

As the world’s most advanced economies buckle under the strain of the coronavirus pandemic, Chicago Booth’s Raghuram G. Rajan looks ahead to how those in emerging markets will cope with the virus if they begin to experience greater numbers of cases.

Video Transcript

There is a real concern about whether poor countries, which currently don’t seem to be experiencing the virus—at least to the extent that industrial countries are—have the resources to tackle it.

There are three possible reasons I can think of right off the bat for why they’re not experiencing the virus. One, they actually didn’t get it because they’re not that well connected to the source in China. Second, they have it, but they’re not really able to measure it. And third, they tend to be hotter countries, and hopefully, the virus tends to die down in its spread as you get to hotter, more humid countries. That’s an untested proposition, but certainly consistent with these facts.

Now, it could be any of the three, and my suspicion is, it’s a little bit of everything: that it is, in fact, spreading—perhaps a little less fast than in temperate climates—and that poor countries are not measuring it, are not testing enough and simply don’t see it.

They’re also typically younger, so it may be that the younger population is a little more able to bear it. But, they do have their share of the elderly, and they will be severely affected if the virus spreads quietly.

Now, the problem in poor countries is that the kind of social isolation—that is, social distancing—that is possible in industrial countries is much harder there. If you’re in a slum in Mumbai, it’s very hard to stay some distance from people within your house, let alone people in the community. And, of course, public services are less well developed. If you are in a state of lockdown, how do you get milk, how do you get bread or naan every day? That becomes a problem.

So, my guess is, when the countries in the emerging markets really have to fight this virus, they will need all the help they can get. The ratio of ventilators per hundred thousand population is much lower in these countries. So, we have to be prepared.

Hopefully, they’ll reach their peak at a point later than the industrial countries, and there’s both resources as well as medicines to spare at that time. And hopefully, we can do a better job at fighting the epidemic then than we are currently doing.

But, it remains to be seen. A number of countries have started the fight on their own. Let’s see how it goes.