World experiencing deepest recession due to COVID-19

The world will see another deep recession in the economy after the great depression in the 1930s. This depression is caused by the effects of the novel coronavirus pandemic.

This pandemic has caused a catastrophic effect on the economy of the richest and the poorest of nations. The World Bank president has said that given the extent of the economic contraction, there was a rising risk of the disruptive debt crisis in countries. Mr. Malpass told the media at the start of an annual meeting in the International Monetary Fund and the World Bank:

“The recession has been deep, one of the deepest since the Great Depression. And for many developing countries and the people in the poorest countries, it is truly a depression, a catastrophic event. It is continuing to add to the ranks of those in extreme poverty.”

Growth program

The world bank president said to the media that they are building a growth program for the developing countries. This is to help them overcome the effects of the pandemic on the economy of these countries. The board extended the health emergency programs to up to $12 billion for vaccines and therapeutics. And also the distribution of those in countries that do not otherwise have access.

Preserving the core industries

During this depression, the world bank has asked countries to preserve their core industries. This would help them stand up again after the pandemic is over. Infrastructure like that of health, education, enterprises must be focused on. Malpass also said that a critical step for countries is to reopen schools.

“We think there are as many as a billion children still out of school in the developing world. And in those cases, learning goes backward, which has a considerable future cost for countries. This is particularly true for girls left out at a critical point in their lives, left out of school. That’s a high priority,” he said.

Restoring infrastructures

The IFC will work on the infrastructure that helps provide electricity and low carbon methods that help provide clean water, providing global public goods. This means assisting countries to achieve an equilibrium with their natural resources and the climate that will ensure safety benefits their neighbors.

The documentation and standardization of the infrastructure projects hence become crucial in dealing with the recession. The world should move into pooling multiple infrastructure projects. This will reduce the risk of the entire package of industries to fall.

Image courtesy of Mark Van Scyoc/Shutterstock

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