By May 2020, every African nation had registered cases of COVID-19. By late July, cases had exceeded 844,000. A key factor in Africa’s struggle to mount a response to the pandemic (although not the only one) is that years of debt servicing have eroded states’ capacities to build strong health systems.
Research on crisis and pandemics in different parts of the world, particularly in sub-Saharan Africa (SSA), shows that countries will respond to COVID-19 in two phases – the fiscal expansion phase, which involves a series of stimulus packages, and the fiscal contraction phase, which is characterised by austerity. In the case of COVID-19, these phases will require significant levels of financing. In a region with predominantly low and narrow tax bases, debt and donor aid have become an alternative way for governments to finance state obligations. Currently average African debt-to-GDP is below the 60% (danger) threshold, which is way below the crisis levels of the 1980s and 1990s.
However, the cost of debt has exponentially increased due to low credit ratings translating into poor interest rates. By 2018, 18 SSA countries were at high risk of debt distress and governments made austerity cuts to public services to service their debt obligations. In 2018, 46 low-income countries — most of which are in SSA— were spending more on debt servicing than on healthcare. Annually, SSA countries were spending an average of $70 per capita on healthcare (supplemented with $10 external assistance), in contrast to $442 in China and an average of $3,040 in the EU.Read More »
As the COVID-19 health crisis deepens, it looks increasingly clear that the short-term collapse in global output is likely to exceed that of any recession in the last 150 years – that is, in the entire history of capitalism. The ILO estimates that the crisis will lead to the destruction of 195 million jobs.Hence, after discussing at length the epidemiology of the COVID-19 pandemic, media attention is now increasingly focused on how to restart the global economic engine. We may still be mourning our dead, but time seems to have come to discuss how we guarantee economic survival that, under capitalism, is based on production and work. Here in the UK, from where I am writing this piece, getting ‘Britain back to work’ is becoming the new mantra for the government, even if its own leader is still recovering from the virus. Similar concerns are debated across the world, as the pandemic has by now clearly turned from a planetary healththreat intoa planetary economicthreat. Yet, getting the world ‘back to work’ ain’t no easy endeavour, whilst maintaining social distancing. Global capitalism is based on social interactions. In fact, its global phase has aimed at erasing social distancing, not just between working people but also between countries, markets, commodities and consumers. But at present, the way in which we are used to regenerate life under capitalism would literally kill us, and this is no small print in explaining the impasse of the COVID-19 crisis. It should be the starting point to analyse it. Ultimately, before turning into a crisis of production, the current pandemic has created a systemic crisis of social reproduction. As argued by Tithi Bhattacharya, the pandemic has shown the centrality of life-making activities for the working of capitalism. Moreover, it has also shown the value of care, as well as the stark ‘care inequalities’ experienced by different communities and individuals across the globe. By all means, this is a reproductive crisis like no other before. Read More »
Most economists are greatly underestimating the economic challenges posed by the Covid19 pandemic. Without a correct understanding of those challenges, the aggressive monetary and fiscal measures many government are now pursuing will fall well short of their goals. They will go down in history as economic Marginot Lines—scaled up versions of tools designed to fight past crises.
The pandemic poses new and unique economic challenges. It compromises our ability to engage in productive and commercial activities requiring close contact between groups of people—that includes most of the things sustaining a modern economy. Epidemiologists tell us this is needed for several months. Responding in a way that minimises the loss of life and safeguards our long-term productive capacities requires two things: Temporarily shutting down large swaths of the economy, and focusing society’s productive resources on the kinds of work needed to fight the pandemic.
Most economists have not yet understood this partly because the scale and scope of what is needed pushes beyond the boundaries conventional economic thinking, and beyond what they generally consider to be legitimate “economic questions”.
The pandemic requires an unprecedented mobilisation of what feminist economists call care labour: work to care for ourselves, our families, and our communities. Over the next few weeks or months most people need to be focused on a vital job: caring for our collective health and helping save thousands or even millions of lives by staying at home. Many families will have to do this while simultaneously caring for millions of children now out of school, for other loved ones who cannot fully care for themselves, and for those who fall ill but do not require hospitalisation.
We need to allocate resources to enable people to perform this work.Read More »
In two previous posts on this blog, I’ve discussed the issue of premature deindustrialization and some of its possible consequences. In a recent paper, I, along with co-author Bret Anderson of Southern Oregon University, explored the potential consequences of premature deindustrialization further by examining the possible connections between premature deindustrialization and the defeminization of industrial employment. Premature deindustrialization is a situation in which the shares of manufacturing value added and employment begin to shrink at per-capita income levels much lower than those of the early industrializers, along with manufacturing employment peaking at lower levels. The scarce manufacturing jobs that do remain, however, are likely to be relatively high paying jobs that countries and workers compete for. In our work, we assessed whether premature deindustrialization is a feminizing or defeminizing force in industrial employment. By examining 62 countries from 1990 to 2013, we find that premature deindustrialization is likely to amplify the male bias of industrial upgrading.Read More »