Some economists believe that vulnerable economies require access to additional resources to fight not just the Covid-19 pandemic but the economic impact resulting from it. Researchers reveal that countries with stronger estimations of GDP decline in 2020 witnessed larger number of deaths in excess of official Covid-19 fatalities.
Dean Baker, senior economist and co-founder of the Center for Economic and Policy Research (CEPR) in Washington, D.C., retweeted an article on the IMF’s allocation of $650bn in SDRs being significant in bolstering the fight against Covid-19. However, economists believe that the world, and especially the vulnerable economies will require more assistance to respond to the impact of the Covid-19 crisis, and now the rapidly spreading Delta variant.
Co-Director of CEPR, Mark Weisbrot believes that the global pandemic has already worsened than when it was decided to allocate the SDRs to the poorer nations. Additionally, many developing economies are still short of vaccine supplies and distribution, making it more difficult to curb the disease. High-income countries intervening on behalf of intellectual property protections for the big drug makers have also made it more difficult for other countries to develop effective coronavirus vaccines.
Economists believe that the re-emergence of more dominant virus variants like the Delta, future lockdowns, restrictions, struggling businesses, inability to return to work, and overwhelmed health care systems will only require more support in the form of SDRs.
The IMF's allocation of $650 billion in #SDRs today is welcome, but much more will be needed to respond to the global challenges resulting from the COVID pandemic, which is spreading more rapidly due to the delta variant. @MarkWeisbrot #GlobalCovidResponse https://t.co/mgKSXhZDZo
— CEPR (@ceprdc) August 23, 2021
Adam Tooze, historian, professor at Columbia University and the director of the European Institute, shared an article on Covid-19 having found its way into neglected cracks in several economies such as US, UK, and Asia, where poor working conditions in factories, care homes, and meat plants have been documented to help in spreading the virus.
The campaign group Labour Behind the Label is now blaming clothing sweatshops in Leicester for contributing towards a local surge in Covid-19 cases. The campaign believes that some company’s suppliers have contributed to the spread of the virus.
A 2018 research suggested that Leicester garment factories were crammed into old crumbling buildings, where expensive machines were outcompeted with illegally underpaid humans. The success of online fashion retailers is largely dependent on the supply of clothing from these Leicester factories. Boohoo, for example, which supplies 40% of the clothing in the UK, and much of it from Leicester, prospered during the Covid-19 lockdowns by shifting to leisurewear as against rivals trying to ship summer wear from Asia.
Leicester’s sweatshops were an open secret much before the investigation began. However, the pandemic has revealed the costs of online fashion and the bill of government inaction has finally come due.
Fair question, but I would say @sarahoconnor_ would have a fairly credible answer to the suggestion you are implying. For my money, she is one of the outstanding labour/social affairs journalists writing anywhere. For e.g. https://t.co/aIg4iKprUa
— Adam Tooze (@adam_tooze) August 23, 2021
Chris Williamson, chief business economist at the IHS Markit, shared an article on how the pace of US economic growth slowed down sharply in August as private companies struggled to meet the demand due to supply and labour shortages. In addition, new orders growth also dipped due to rising Covid cases in the country owing to the rapid spread of the Delta variant.
Severe supply chain disruptions increased the cost burdens of private firms during the third quarter, with both manufacturing and service sectors registering a quick rise in costs. Additionally, material shortages, lack of new staff, and the rapid spread of the Delta variant highlighted major backlogs of work during August.
Despite concerns over the virus spread, companies remain upbeat about an increased output in the coming year. They are expecting that a cooling demand due to rising Covid cases should alleviate some of the inflationary pressures in the short term.
The pace of US economic growth slowed sharply in August according to the flash #PMI, as companies struggled to meet demand due to supply and labor shortages, through new orders growth also dipped due to rising covid case numbers https://t.co/N8wFnX22lL pic.twitter.com/oHVmeQk7Q9
— Chris Williamson (@WilliamsonChris) August 23, 2021