Question

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

The answer must be plagiarism free.

(COVID-19: The Impact On Developing Economies)

Answer 1

Coronavirus has led to widespread lockdown across the world including the developing countries.

It has led to economic slowdown leading to recession, wide-spread unemployment, shutting down of businesses due to the fear of growing debt, heavy rent and almost no sales.

It is causing wipe-out of the tax revenue of the government, which is being used to feed a large population who were heavily dependent on daily wages.

Due to the severity of poverty and given no source of income, the current pandemic situation has led to an increase in crime rates.

The nutritional and productivity level of the larger section of lower-middle-class and lower class is adversely affected, thereby leading to decreased life expectancy due to health reasons.

Coronavirus pandemic has resulted in people being uncertain about the future. They resorted to saving more and spending less thereby leading to the problem of low aggregate demand in the economy. There is reduced level of economic activity.

The government faces the risk of low business & economic activity, low money circulation, low tax collections, low socio-economic infrastructural development, low employment opportunities, low earnings and low aggregate demand.

The adverse effects are being observed among inter-city and inter-state migrant workers. The people are forced below the poverty line.

The international investors are pulling out the money from the developing countries to the safety net, thereby causing an unprecedented reversal of capital flows.

The inequality in the distribution of wages and salaries and wealth has increased by many folds.

The children of the people with a limited source of income are being deprived of their education as the schools & colleges shut down and education started getting imparted online.

The mobility of the people has restrained. The cities and countryside heavily dependent on tourism industry are badly affected.

The people working in the logistics sector have lost their jobs.

People took the route of borrowing money from the near ones to support their current essential expenditure, thereby making them more vulnerable to the tortures and exploitation of creditors in the unorganized sectors.

The government and federal authority are finding it difficult to boost the economy using some expansionary measures as it is evident that such measures may not be able to elicit increased economic activities.

The migrant workers are returning to their hometown with no or very little intension to come back and provide their services to the small industries and businesses in big cities. The owners are finding it difficult to reap the benefits of relaxation that the government has provided from time to time.