Lockdowns and their impact on emerging markets

IN MARCH 2020, the World Health Organization (WHO) declared Covid-19 – an acute respiratory disease caused by the coronavirus Sars-CoV-2 – a pandemic. Governments around the world adopted policies of extreme social distancing or “lockdowns”.

These lockdowns have had an enormous impact on the global economy and society, particularly in emerging markets – with China being the prime example. Many of the emerging markets experienced a credit crunch, which made it difficult to pay back or refinance loans.

This caused problems for many large businesses including Evergrande and Country Garden Holdings in China, Bed Bath and Beyond in the US, and over 280 businesses in India. The lockdowns not only hindered economic progress, they also impeded education and hurt children’s development, in addition to innumerable other consequences that cannot yet be completely ascertained.