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Country sustainability during COVID-19
The COVID-19 and the resulting global lockdown have had two major impacts on assessing countries sustainability. Firstly, the lockdown has seriously jeopardised the production of data. Particularly in emerging economies, which are not equipped to ensure continuation of data collection and statistics. The countries’ access to data and their ability to properly update it have been challenged and at risk for the coming months. The Millennium Goals, initially, and then the Sustainable Development Goals (SDGs) have substantially improved the coverage of data for several emerging economies. Unfortunately, the sanitary crisis has impacted data coverage. The consequences will be more visible in the coming months, and limit the availability of the most recent data. Indeed, according to the United Nations, 65% of statistics headquarters have been partially or fully closed. Meeting international data reporting requirements has been particularly complicated in sub-Saharan Africa but also in Latin America and the Caribbean.
Secondly, the sanitary crisis has reversed the observed positive trend in almost all objectives. The SDGs have experienced massive setbacks in several areas like poverty, food insecurity, health, education and gender diversity. This is pity for sustainable and inclusive growth, and is certainly not restricted to emerging economies. The interactions between developed and emerging countries are important and can create virtuous or vicious circles, depending on the trends. Indeed, since the interaction and interdependency between all countries, the individual achievements of SDGs and their costs depend on the results achieved by the community. The negative externalities from migration, health, sanitary or climate issues affect the sustainability of growth in emerging economies. However, these externalities also have a negative impact on inclusive growth in developed markets.
The COVID-19 has highlighted the importance of several indicators within the Population, Health and Wealth distribution driver in DPAM’s country sustainability proprietary model, which was created in 2008. We list some of these here:
The 2008 financial crisis left a tangible impact for several consecutive years. Lessons from the model have shown that drivers like education and health were the first victims of the resulting restrictions. Today the number of countries that run a high risk of indebtedness has doubled. The International Monetary Fund estimated in 2018 that 40% of low-income countries were exposed to a high risk of indebtedness.
As a result, the continued assessment of sustainability at a country level remains as essential as ever.