The Power of Market-Creating Innovation

Everyone has been impacted by the global pandemic, but can you talk about the particular effects on emerging economies?

To be sure, the entire world has been impacted by COVID-19, but emerging economies have been severely impacted in four ways. First, there has been a significant loss of the capital required to jump-start an economy. Since the pandemic began, more than 100 billion dollars has been siphoned out of emerging economies by global investors who view the risk as too much to bear.

Second, governments in these economies have had to redirect their capital resources to deal with the crisis, which means they haven’t been able to provide the usual level of services. Third, on a social and household level, people throughout the global diaspora who typically send money home to family members have not been able to do so. Much of the Philippines’ GDP, for instance, comes from remittances which have been impacted severely by widespread job loss.

Since the pandemic began, more than 100 billion dollars has been siphoned-out of emerging economies.

The last key area is poverty.