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The COVID Tsunami and Emerging Markets

No one is sure why poorer countries have suffered proportionally fewer infections and deaths during the pandemic: weaker health systems, worse nutrition, and larger numbers of people with pre-existing medical conditions suggested the opposite outcome. But the economic implications have been clear.

LONDON – A tsunami-watcher’s job is thankless. If an earthquake hits Australia, or an underwater volcano erupts near Java, naval stations in Japan, Vietnam, the Philippines, New Zealand, and even far-away Peru and Chile go on alert. Residents of coastal areas are warned that a big wave may be coming. Get it right, and tsunami-watchers save millions of lives; get it wrong, and they try to ignore the scorn, knowing that next time may be the big one.

In 2020, the COVID-19 tsunami was expected to devastate poor and middle-income countries everywhere. The wave did come, and its consequences were painful, but less so than anticipated.

Contrary to most forecasts, rich Western Europe and North America have suffered much worse loss of life and economic damage. Former World Bank Chief Economist Pinelopi Koujianou Goldberg and Tristan Reed report a strong positive correlation between income per capita and deaths per million inhabitants. As of late January, deaths per million in the United Kingdom were twice as high as in South Africa, 13 times higher than in India, and approximately 30 times higher than in Bangladesh, Pakistan, Syria and The Gambia. The United States is little different.

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