How will the impacts of COVID-19 differ between emerging markets and their developed counterparts?
The impacts of COVID-19 will vary from country to country depending on the policy response to the virus itself as well as the fiscal/monetary support that can be provided by that country to support economies through the virus. Significantly, most countries have now enacted some form of fiscal and/or monetary policy response. Collectively, these policy actions amount to powerful economic stimulus.
Today, emerging economies must navigate the COVID-19 pandemic amid collapsing exports, dwindling remittances and tightening international credit conditions that call for austerity. To contain the pandemic, the necessary limits on economic activity fall more heavily on these economies than in the advanced countries.
To help us answer these essential questions we received 4 experts from several emerging markets:
When Covid-19 hits emerging markets, what’s the impact?
✽ Papua New Guinea: populations living outside urban centres and difficulties to evaluate the impact.
- Officially, the number of cases is 8 and no deaths. However, as the country doesn’t have proper infrastructures for testing, the numbers of infected cases is probably inaccurate.
- 80% of the population lives in rural areas and are self sufficient. Everything seems normal in people’s everyday life.
✽ Cambodia, a strong economical challenge and a struggle for the locals
- No-lockdown plan for now but several health measures from the government to limit the spread.
- The situation has been economically hard as the main sources of revenue are tourism, agriculture, manufacturing and property. (You can now visit the Angkor temples with no one around you!)
- Isolation is quite a luxury and it can be a much harder in emerging countries to survive.
✽ Nepal, a population eager to go back to work
The situation seems fine and a lot of testing are going on (58 infected cases).
The government established a “soft” lockdown to limit movements of people. People are getting anxious form staying at home after 38 days working from home.
✽ Indonesia, local businesses are trying to pivot quickly
Similarly than other countries, hospitality and tourism have been the most impacted fields in Indonesia.
Most of local businesses (especially in food sector) are trying to pivot: sell some groceries on take away or go digital
Governments provide less help to businesses and start-ups
✽ For Nepal, Papua New Guinea and Indonesia, no government initiatives have been actioned to assist businesses and support the economy.
✽ In Cambodia, few such measures have been taken but they include discounts on electricity bills or rent, health care is free for infected cases, a minimum wage for those who lost their jobs.
✽ However, we can see a lot of solidarity within the different communities: Facebook groups, mutual supports.
Hints & Tips to support your business during the crisis: digital & strategic thinking
✽ Now is the best time to retain your client and expand your customer database (vouchers, marketing techniques).Maintain the relationship with your existing and potential Customers by understanding their changing needs and creating content to cater for them.
✽ The main opportunity is definitely going digital! Use this time to develop your virtual services (improve your website, define your digital strategy, create a market place)
✽ Perhaps, it’s the best time to diversify your offer and develop your products and services where there are opportunities.
A positive after crisis impact on emerging countries
✽ One of the most positive impact on people in emerging countries after crisis will be more awareness on digital world and it’s infinite possibilities. People have gained 3 or 4 years of technology advancement. Digital is the new norm.
✽ The growth of online education allows an easier access to education everywhere for everyone.People now have the ability to learn from home and acquire new skills.
✽ In emerging countries, people tend to focus their efforts on local businesses. Now, most of them are discovering new opportunities to go global.
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