Question

Question: How Coronavirus can affect the economies of developing countries? explain the answer to question in 800 words.

(COVID-19: The Impact On Developing Economies)

Answer 1

Developing nations will surely be hit hard by what the International Monetary Fund is doing, and some will warn of the worst decline since the Great Depression of the 1930s. This year, the IMF expects 170 nations-rich and poor-to experience a fall in economic activity per person. That means a decline in the average standard of living.
The pandemic is hitting the developing economies in distinct ways:

Many are the exporters of industrially used commodities. The closure of many factories around the world means that there is less demand for such goods, and in some instances, their prices have fallen sharply.Oil is the most glaring example. The loss of demand has been particularly serious, as the crisis has resulted in a significant reduction in demand for transport fuels, of which more than 90 percent are produced from crude oil.

For a while, the situation has been aggravated by what was in effect a price war between Russia and Saudi Arabia, the two biggest exporters. An unusual condition has occurred in which certain oil prices remain below zero. It is not a general feature of the oil market, but it does highlight the huge supply-demand imbalance. Other commodities also saw sharp falling prices, albeit not generally on the oil scale. For example, copper is now around 18 per cent cheaper than it was in mid-January, and the price of zinc is lower than 20 per cent.

In that case, the low-income countries will be especially vulnerable. A quarter of the Sub-Saharan African population is now suffering from malnutrition.Many non-food product types have also been affected. The Bank reports that Kenya 's exports of fresh flowers have fallen by 80 per cent following the travel restrictions.Rubber rates were also affected. Since people drive less they don't have to change tires too much. Prices of maize and some other crops are also vulnerable to a decline in biofuel demand.

A decline in the value of a national currency makes repaying loans in other currencies, or paying interest on them, more costly In a period when government budgets for developing countries are under pressure to address the health crisis and its economic implications, debt payments may be a significant diversion of scarce resources.

The G20's leading economic powers decided to delay-not postpone-debt payments for a wider community of the poorest nations from May until the end of the year. The agreement includes debt payments by a total of 77 countries to G20 governments.It ensures that in the coming months, cash can be redirected to deal with the crisis, rather than make certain payments. Yet that does mean they'll need to make additional payments. But developing-country debt relief activists think the G20 and others should go further For example, the Jubilee Debt Campaign described the G20 change as a first step but called for a complete cancelation of the payment obligations.

Dealing with the health issues poses unique challenges in developing countries' heavily populated urban areas. In this context social distance is especially difficult
And for those working in what's called the informal economy, sitting at home is. Most will go out to work in order to feed themselves and their family.Also, developing countries are likely to be affected by a decline in money which migrant workers send home to their families. As they are called, these remittances are mostly sent from the wealthy to the poorer countries, and they can be a very important contribution to the standard of living of a family.