Published in Berkeley Public Policy Journal | April 22, 2020
Co-authored with Rifaiyat Mahbub
Since the implementation of lockdowns in developing countries, debates have ensued on whether the poor will starve to death before the virus kills them. People are on the streets demanding the right to wages and food. In the US, a country with a much larger GDP and fiscal space relative to developing countries, 22 million people have filed for unemployment insurance claims since March. Last week, Oxfam warned that COVID-19 could cause approximately half a billion people globally to slide into poverty. Although economic losses have been felt globally, poor countries are more acutely faced with making a choice between lives and livelihoods, including our own —Bangladesh. The World Bank estimates that the country’s GDP growth will drop from 8 percent to 2 percent by the end of June .
We believe that the choice between lives and livelihoods that the poor are faced with in developing countries is a false dilemma. To ensure livelihood in the long run, it is essential that we take steps to save lives now. Failure to suppress the virus in some countries could make it endemic, causing it to circulate in regular intervals elsewhere in the world until a vaccine is developed.
In reality, COVID-19 has exposed the glaring inequalities that exist in the society today. Newly released data shows 30 percent of COVID-19 patients in the US are African-American—predominantly from poorer states in the South with fewer facilities—even though African American constitute only 13 percent of the national population. In many developing countries, adequate health facilities do not even exist. Bangladesh reportedly has 500 ventilators for a population of 165 million while Liberia is believed to have none. The curve is already skewed against the poor. They are disproportionately affected everywhere, and forced to choose between staying healthy and putting food on the table.
What the Numbers Aren’t Telling
We argue that developing countries should engage in suppressing the outbreak precisely because they completely lack the health capacity to treat patients with COVID-19. Whole-of shutdowns allow them to slow down the pace of the outbreak and buy them time to reorganize existing health capacity until a vaccine becomes available. Although models estimate that the mortality rate from COVID-19 in poorer countries like Bangladesh is lower than those predicted for the US and the UK, they do not account for several factors: (1) the prevalence of underlying health conditions, (2) high population density, (3) intergenerational cohabitation, and (4) subjective expectations and behavior.
Researchers claim that expected mortality rates are lower in developing countries because a higher proportion of their population are under sixty. But the stark difference in Covid-19 death rates between countries indicates we cannot entirely rely on age-specific variations for predicting death rates. Last week’s data indicated that 60 percent of COVID-19 patients in Bangladesh are between 21 and 50 years old. In Maharashtra, India’s worst-hit state, 70 percent of patients are below 50. Mortality rates are a function of when countries are able to test, track, and treat cases. Overstretched health systems are struggling to treat patients before they are sufficiently ill, a problem that will be magnified in developing countries. In the absence of universal or random testing, we do not and cannot have sufficient data to accurately determine the number of infections nor the number of deaths in the population.
Moreover, through our extensive work in South Asia, we know that populations in slums and refugee camps suffer from chronic illnesses due to malnutrition, household air pollution and occupational exposure. In the US, the high prevalence of underlying conditions in African Americans is one of the likely contributors to higher COVID-19 fatality rates, suggesting current models might be underestimating the same in poor countries. Numerous studies have also shown mortality rates from underlying conditions are more pervasive among younger groups. In 2013 alone, noncommunicable diseases like heart failure, diabetes and cancer killed 8 million people before their sixtieth birthdays in developing countries.
In the absence of widespread disease suppression, it is not clear to us how the elderly can be protected from exposure to the virus. In Bangladesh, an average household has five members and usually includes three generations. Families in slums use one latrine and over 80 percent of households share the same water source with more than five of their neighbors. If working-age members are in fact allowed to go out and work, maintaining distance between other members of the family back home is physically impossible. At least 40 percent of three generation slum households are headed by women, typically engaged in informal work such as domestic help, cleaner and street vendors. We know women perform twice as much unpaid care work than men, meaning they will not be able to avoid taking care of elderly family members after the day’s work and will be at higher risk of contracting and transmitting the virus.
With these caveats, it is difficult to put our faith in statistics that show that developing countries are likely to have a lower mortality rate. Moreover, given mass hysteria, misinformation, and stigma surrounding coronavirus, if infections are among the poor, they are less likely to show up at health facilities. Their deaths will remain unreported and never tallied into the official COVID-19 dashboard.
The Many Perils of Being Poor
Even if the economy were to open up during this crisis, it is unlikely to fully restart. The pandemic has disrupted the global supply chain and reduced demand in developed countries where the economy continues to be shut. A million Bangladeshi garment workers have already been laid off; 72 percent of buyers with canceled orders have refused to cover costs of raw materials and 91 percent have declined to pay production costs. If workers start coming back, it is less probable they will have any work to do.
This disconnect between demand and supply affects all sectors of the economy. Wealthier employers are willing to accept a higher income loss in exchange of health gains. They are less likely to have jobs in the informal workforce or to interact with them for fear of contracting the virus. If schools and workplaces remain closed, rickshaw pullers do not have passengers. If upper middle class neighborhoods have restricted access, domestic help, cleaners and technicians do not have work. And if places were to be selectively opened, it only exacerbates uneven safety standards for the poor.
Systemic class, religious, racial and gender tensions further disenfranchise the poor. When governments in Bangladesh and India announced shutdowns and thousands of migrant laborers were forced to travel back to the safety of their villages, our own social networks were saturated with incendiary commentary holding the poor as criminals in the case of community transmission. If lifting lockdowns result in unexpected peaks in infected cases, the animosity towards the poor will inevitably rise. Knowing very well that economic fallout from the pandemic will outlast the health costs, developing countries often rely on individual donations and altruism to help carry the underprivileged through crisis. If the rich stop feeling benevolent, can democratic governments alone save the poor? As long as a widespread threat of COVID-19 circulates in the world, low-income groups will continue to be left at the bottom of the totem pole.
Can the Government Save the Poor?
Perhaps —and it requires governments to act both quickly and efficiently. Low income countries need to slow down transmission to have fewer sick patients overall and buy time to ramp up testing and quarantine facilities. With the monsoon season upon us, Bangladesh is faced with dengue, chikungunya and typhoid incidents that already stretch the country’s limited health resources. At current capacity, the poor will not be able to additionally afford getting tested, treated or isolated, which basically means they just cannot fall sick.
Flattening the health curve through social distancing translates to flattening the economic curve. A centralized government response is therefore critical in strengthening and repurposing existing social safety net programs to soften the blow from income shocks. Last week, Bangladesh announced a $8.5 billion stimulus package (equivalent to 2.5 percent of GDP) that—among other things—aims to widen social safety net programs. The package is ambiguous in how it aims to cover about 87 percent of the informal workforce, among whom 10 million are dependent entirely on daily incomes. There are already widespread reports of irregularities in distribution. It is therefore imperative that the government step up and implement a more comprehensive plan to create coverage for those in need.
Historically, governments have struggled with targeting social safety net programs and faced concerns around under-coverage. The poor are a highly dynamic group—migrating, switching jobs and sliding between poverty thresholds. We do not know who the poor are, where they live and how we can direct cash or food to them. In the absence of strong identity infrastructure coupled with frequent, nationally representative demographic surveys, it is challenging to direct programs to those who meet all the criteria. Our analysis seconds expert opinion that targeting is the wrong concern at the moment. To reduce corruption and misappropriation of resources, but most importantly, to ensure the availability of resources to those most in need, we recommend universal targeting of food rations and broadening the base for unconditional cash transfers. These measures follow two important principles: erring on the side of inclusion rather than exclusion, and anchoring policy around future income instead of current.
Although food security is a concern, Bangladesh’s Prime Minister announced the government’s reserve already has 1.7 million tons of food grains; in the upcoming Boro harvest, the country will have plenty more. Food Corporation of India also confirmed 77 million tons of rice and wheat in stock. However, famine among the poor and vulnerable can arise even in the absence of a food shortage. Lockdowns can disrupt the production and distribution of food, and therefore the government needs to have robust infrastructure in place that facilitates efficient distribution and prevents starvation when the economy is shut down. Universal targeting of food rations solves three immediate challenges: (1) lowering risks of starvation; (2) mitigating risks of under-coverage; and (3) keeping food supply chains functioning by buying directly from farmers and freeing up granaries.
With a massive anticipated increase in poverty, the income level of the majority of the population, including the middle class, in developing countries is expected to fall. Governments should therefore consider broadening the base for unconditional cash transfer programs. Existing household surveys in most developing countries are woefully outdated, leaving governments with little flexibility to adjust who gets paid. However, these same countries are experiencing rapid increase in cell phone coverage that can be used to estimate relative wealth. In the medium term, high cell phone penetration coupled with offline social networks—imams and school teachers who are influential and tapped into the changing socioeconomic conditions of their localities—could offer powerful solutions, especially if changing cell phone usage data can be used to predict changes in income levels.
While some countries have sufficient infrastructure for digital transfers through bank or mobile accounts, not all have developed such a system. Still, even when countries do not have adequate systems in place, SIM cards are usually tied to national IDs and digital transfers can be achieved through structured text messaging in feature phones or apps in smartphones. Moreover, by fast-tracking specific, pending regulatory provisions, such as interoperability between authorized players, and encouraging time-bound entry of credible new players, governments can leverage existing infrastructure to widen coverage and usage.
The prospect of expanding social protection programs can seem daunting for developing countries that have fiscal constraints that are going to be further tightened by shrinking revenues. Conservative estimates from the World Bank suggest $1.14 trillion is required to provide $1.90 per day to 3.3 billion people over the next 6 months. In such circumstances, there is a strong moral case for developed countries to help out especially when only 2.95 percent of GDP of the ten richest G20 countries is sufficient to cover one-time emergency relief to 66 poor countries. Simultaneously, Muslim-majority countries like Bangladesh collects $1.4 billion in zakat annually that can be organized and repurposed to increase coverage over an extended period.
Beyond Social Protection
Suffice to say, there is no substitute for aggressive testing and contact tracing. Bangladesh has one of the lowest per capita testing rates and the government needs to work with nongovernment organizations and the private sector towards ramping up health capacity quickly. We have robust networks of community healthcare workers who are seen as exemplars in reducing polio, maternal and neonatal mortality and tuberculosis by taking frugal solutions to people’s doorsteps. With adequate precautions that ensure their safety, community healthcare workers can be critical in the country’s response strategy. To get to a stage where countries can realistically consider lifting a lockdown, governments need to be held accountable for increasing testing and setting up large quarantine facilities that would enable households to isolate the sick and at-risk people without infecting entire communities.
Additionally, the Kerala model of responding to COVID-19 could serve as a footprint for developing countries implementing social distancing policies. In Kerala, strict lockdown measures and aggressive testing were accompanied with food rations and delivery to vulnerable households. While other states in the country are reporting rising infection rates, Kerala has begun experiencing a decline in incidence of new COVID-19 cases.
In considering tradeoffs, we recommend resource-scarce governments to follow two rules-of-thumb. First, the current discourse treats helping the poor as altruism that is both unsustainable and misleading. Failure to suppress the virus among the poor could make it endemic, particularly in densely populated places, causing it to circulate and affect the whole population. Second, we exist in an extremely fluid situation that requires countries to be flexible with both immediate, timely policy responses and be prepared to plan for as long as 12-18 months. What works today, for example, nationwide lockdown, may not be equally applicable the following week if transmission rates are lower. It is therefore essential to continuously collect and analyze data and aggressively test to adjust and target measures at varying demographic and administrative levels.
It is clear that suppression measures lead to vastly different outcomes for different countries. The poor, however, cannot be collateral damage. A recent BRAC survey showed that although the lockdown has led to a 75 percent decline in average household income, 86 percent of respondents still support the measure. This underscores the economic lives of the poor are as important as their… lives. Governments need to think holistically about unintended consequences and be open to creative models to minimize loss.