HomeOpinionInequality gap widens as Covid-19 bites hard

Inequality gap widens as Covid-19 bites hard

By Zvikomborero Sibanda

THE outbreak of Covid-19 pandemic has unexpectedly disrupted the lives. It brought about a ‘new normal’. While this new normal calls for governments, corporate world and the public to become innovative for survival, coping strategies have intensified inequality within society.

This pandemic has become the world’s most contagious disease in a century since the 1918 influenza pandemic which according to the US Centers for Disease Control and Prevention, infected an estimated 500 million people and killed 50 million globally.

The Covid-19 pandemic has widened the global inequality gap which will take decades to reduce.

Statistics show that the labour market impact of the pandemic is unequal and varies with job, worker and company characteristics. The rate of job losses is highest in industry, which have jobs that are least amenable to working from home while many small companies with a low revenue base are being forced to close. The irony is that the virus is not showing any signs of varnishing soon.

The corporate world takes the risks seriously and this means certain production processes are being viewed as riskier. Since robots are least affected by pandemics, where possible, they are replacing humans while ‘Zoom’ has replaced travel.

Also, the pandemic is now a threat to livelihoods of children as it is negatively affecting their education. In-person classes have been affected and schooling turned online.

However, for poor countries like Zimbabwe with the majority of its population living in rural areas with no access to electricity and high data cost, e-learning is becoming impractical. This is depriving millions of kids of their right to uninterrupted education. Also, pandemic graduating students face risk of being discriminated by employers. There is enormous evidence based on past pandemics suggesting that disrupted schooling negatively affect learning and produce observable differences years later.

Poverty rates have increased sharply in the developing world as unemployment skyrockets. Governments of the developed world to this day are paying billions of dollars in direct payments to individuals as well as unemployment benefits. This huge spending is now having negative effects on stability of certain metrics such as inflation.

However, because most developing nations are highly informalised, in debt stress and facing high inflation levels, they are constrained in cushioning citizens and economies. When Covid-19 emerged, Zimbabwe was already witnessing triple digit inflation levels and a huge debt overhang in excess of 70% of GDP complicating the country’s response. The economy is highly informalised, and lockdowns are exposing the poor households living on a hand to mouth basis. In the middle of the fight, hope has now come in the form of vaccines which were discovered in a record time late 2020.

However, the distribution of these vaccines globally is showing inequality patterns: Countries with strong financial muscle have ordered enough vaccines for themselves leaving the poor stranded.

The rate of vaccinations in the advanced world is miles ahead of developing countries as the latter are relying mostly on donations.

The underlying gaps between advanced and developing nations, the poor and the rich have widened. Nevertheless, Zimbabwe has surprised many in the procurement of vaccines which are vital in the fight against the pandemic. After a false start, the government has now intensified its vaccination programme, targeting to vaccinate 60% of the adult population by December 2021. Last week the nation procured 1,5 million doses which were delivered in three batches of 500 000 jabs each. To date, a cumulative 7,3 million doses including donations have been received.

It is reported that Treasury has reportedly disbursed another US$40 million for vaccine purchases after the initial budget of US$100 million was exhausted.  As of August 21, a total of 2,301,641 people were vaccinated against Covid-19, and of this total, about 1,450,981 were fully vaccinated.

Interestingly, vaccine hesitancy among the citizens is now dwindling as shown by rising daily jab uptake driven by the fear of lethal delta variant of the virus. The government’s effort in the fight against this global pandemic which has thrown millions of Zimbabweans into abject poverty is commendable.

A quick administration of jabs will also lead to a quick re-opening of the economy. The existing Level 4 lockdown restrictions are not only hurting the formal sector but also the informal traders. According to the IMF, Zimbabwe’s informal sector constitutes about 60% of the economy and employs the majority of women and youth. The lockdown restrictions are also constraining the distribution of food into the open markets especially staple maize.

Furthermore, last week an oxygen plant was commissioned in Mutare, Manicaland province. This plant was developed by Verify Engineering, a state-owned entity. It has an Air Separation Unit (ASU) that produces gaseous oxygen, liquid oxygen, and nitrogen at an installed capacity of 20 tonnes (gaseous oxygen), 16,5 tonnes (liquid oxygen), and 2,5 tonnes (nitrogen) per day.

The plant will play a major role in the fight against the global pandemic, Covid-19, providing medicinal oxygen for Covid-19 patients and nitrogen which will be used as a coolant in the storage of these vaccines.

Medical oxygen is listed by the World Health Organization (WHO) as one of the most essential tools to fight the pandemic. Covid-19 patients experiencing severe symptoms depend on this oxygen.

More so, the plant will save the country millions of dollars in reduced oxygen imports. Barring public corruption, the saved foreign currency will then be used for importation of key raw materials to be used in industrial production. Also, the funds can be used in the provision of other critical social services for vulnerable people.

However, in this fight, there is need to accelerate up-skilling and training of people that matches the changing labour market. New innovative business ideas are needed to solve the new challenges of the 21st century. As for the government, new policies that greatly focus on creating employment of all groups should be targeted to reduce income inequality.

  • Sibanda is an economist at Equity Axis. — zvikomboreros@equityaxis.net.

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