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Rolling out the stimulus package

  • Published at 02:54 pm May 4th, 2020
D2_April 4, 2020_Covid-19 Mastermind
Photo: Bigstock

The existing pandemic and the response of the third world

In times of crisis, action speaks louder than words. Many governments in today’s world have announced the introduction of a certain degree of stimulus package for those being affected severely by the ongoing pandemic. However, the successful implementation of these packages is debatable. Many a times, economists have discussed the opportunity costs involved with such packages, and to what extent these schemes can actually soothe the damages suffered by those in need.

Now, a number of developing countries, such as India, have introduced plans to present appropriate packages, intended to serve the people being affected; primarily for the low-income group. A majority of such states are resource-strapped, emerging economies, and these governments face their own fiscal limitations in implementing such major interventions. But, the unprecedented nature of the crisis has influenced the authorities in taking rapid decisions without enough research and survey based evaluation and thus, making such schemes vulnerable to drawbacks. Due to inadequate analysis, packages introduced in the third world can be expected to face failures. In many of the developing nations, the middle-income households represent a large group of the population and a majority of such households are not covered by the social security system. In such a context, the people belonging to middle-income households are suffering the most as many of the nations have not expressed direct plans to help the middle-income households. Besides, governments such as that of Bangladesh, have introduced programs to financially help export-driven industries that contribute a large proportion to the economy’s productive potential. In such circumstances, if the financial help is delivered with the utmost expression of honesty, the industries can definitely be helped. However, corruption is a major problem in the political sector of the third world, and uncertainty persists whether stimulus packages would finally reach the people in need.

Certain nations, where agenda such as climate change were given key importance, are now being sidelined. The United Nations High Commission of Refugees (UNHCR) and the World Bank have emphasized and worked skillfully over the years to mitigate the refugee crisis in countries such as Jordan, and now, every such developmental work may be paused for a significant time-span due to the pandemic.

Governments may create a skilled task-force for an equitable distribution of the relief aid during this crisis. Besides, in the upcoming fiscal year, budgets have to be re-designed to account for the public expenditure in response to the pandemic. People are losing their lives; governments and relief agencies have to work through mutual consensus to alleviate the crisis. At this point, expenditure in the healthcare sector has to increase and a certain proportion of expenditure in areas that do not lead to satisfactory social welfare may be reduced, as developing nations work with a strict budget constraint.

The writer is an A Level student of Mastermind school.

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