By Alex Callinicos
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Lockdown policies hit the Global South

This article is over 4 years, 3 months old
There’s an old cliche about the economy falling off a cliff. This time it really has, all over the world.
Issue 2699
The effects of coronavirus are beginning to be felt across the globe

There’s an old cliche about the economy falling off a cliff. This time it really has, all over the world.

A series of graphs appeared last week summarising recent economic figures. Usually they are quite jagged and uneven, but can be smoothed into curves. 

These ones are all straight lines—going up or down. Unemployment claims in the United States, up nearly ten million in two weeks and 950,000 applications for Universal Credit in a fortnight in Britain. 

British services managers’ index down from 53.3 to 34.5 percent between February and March, and Eurozone composite index down from 51.6 to 29.7 percent in the same period.

“This is a crisis like no other,” says Kristalina Georgieva, managing director of the International Monetary Fund (IMF). 

“Never in the history of the IMF have we witnessed the world economy coming to a standstill. It is way worse than the global financial crisis.”

The suffering in the advanced capitalist economies is immense. But this is nothing compared to what is starting to happen in the Global South.

This is partly because these are poorer societies, whose states have fewer resources than their northern counterparts, and whose relatively weak healthcare systems have been harshly squeezed in the era of neoliberal “structural adjustment”.

But it’s also because so many working people in the south belong to the so-called informal sector. The lockdowns mean that many of their jobs have just evaporated. 

In India the cruelty of Narendra Modi’s Hindu chauvinist government sent millions of migrant workers fleeing the cities, harassed by the police and local and state governments.

In South Africa the Institute for Poverty, Land and Agrarian Studies warns, “While the formal food system is for now relatively protected against supply shocks, enormous numbers of people (the working poor, those in the informal economy, those in precarious employment) will have suffered a sudden and long-term loss of income. 

“Even if there is food on the shelves, they will not have access to it.”


The same report points out, “Street food traders have been locked down and lost their markets. This is devastating to the livelihoods of the vast number of people involved in this economic activity. It is also having an immediate and dramatic impact on what people buy and eat.” 

India and South Africa are two of the biggest and wealthiest economies in the South. 

The economic effects of the Covid-19 crisis will be much more severe in poorer parts of the Third World.

The scale of the developing recession—what economist Nouriel Roubini calls the “Greater Depression”—explains the measures that governments have taken to prop up businesses and wages. But these are largely national responses. 

At the height of the 2007-9 global financial crisis the G20—which links together the largest economies North and South—did coordinate state responses. 

This is isn’t happening now, mainly because of the growing tensions between the three major centres of the world economy—the US, China, and the European Union.

The economic collapse puts enormous pressure on governments to end the lockdowns. We may still be only in the early stages of the pandemic—the great flu outbreak at the end of the First World War lasted over a year. 

In Britain, the deaths and infections are yet to peak, but Boris Johnson’s government and its advisers are already speculating publicly about their “exit strategy”.

My guess is that states, desperate to get their economies going again, will use mass testing to establish that enough of the population have developed the necessary immunity to go back to work. 

This is very risky because the virus may mutate—there were three waves of infection in 1918-19. 

So we need to be ready to fight, not just for mass testing and the protection of essential workers, but to ensure a safe end to the lockdowns.

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