ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Datawatch

Russia and Brazil becoming new epicenters of coronavirus

Outbreaks in heavily indebted countries pose risk to global economy

COVID-19 cases are rapidly rising in countries such as Brazil and Russia, even as they contemplate loosening restrictions on private business activity. (Reuters and AP)

SAO PAULO/TOKYO -- While the U.S. and Europe move to reopen their economies, novel coronavirus cases are increasing rapidly in a number of big developing countries. New infections in developing countries have overtaken those in the rich world, with the number of new confirmed infections hitting 50,000 on Friday.

Developing countries are rushing to reopen their economies despite weak health care systems, sparking fears of an explosion of infections. Severe COVID-19 outbreaks in heavily indebted nations could drag on the world economy.

Nikkei has examined coronavirus cases using data from the World Health Organization. The number of new infections in developed nations has fallen by more than 40% in developed countries since the first half of April, but the virus continues to spread in emerging economies.

In Russia, new cases topped 10,000 for a seventh straight day, through Saturday, driven by a string of infections at hospitals and in the military. Nearly two-thirds, or 64%, of the infections have occurred in hospitals, according to a government-affiliated research institution.

With daily new infections topping 10,000, Brazil now has the world's second-highest COVID-19 death toll, behind the U.S. Slums in Sao Paulo and other big cities have become hotbeds of the outbreak, as many shopkeepers ignore stay-at-home orders.

The risk is growing in Africa as well. So far there have been more than 40,000 confirmed cases and about 1,300 deaths from the coronavirus on the continent, according to the WHO. If no steps are taken to prevent the spread, up to 44 million people could be infected and up to 190,000 people could die in Africa over a 12-month span. The WHO warns the epidemic looks particularly fierce in South Africa and the West African nation of Cameroon.

The epidemic in developing countries -- where public health systems are more fragile than in developed countries -- is more likely to lead to the collapse of health care systems and additional deaths.

According to the WHO, average health care spending as a share of gross domestic product in emerging nations is 3%, much lower than developed countries' 8%. In Russia, Brazil, Iran, India and Mexico, where the coronavirus is spreading rapidly, health expenditures as a percentage of GDP are below the global average of 6%.

In Brazil, free medical care is guaranteed under the constitution. But there are not enough public hospitals to meet demand. While hospitals that cater to the wealthy have beds to spare in intensive care units, the poor, who rely on public hospitals, are dying in large numbers -- many without receiving proper treatment.

In Iran, the coronavirus has dealt a further blow to a health care system already battered by U.S. economic sanctions. A shortage of ventilators, protective masks and gowns at hospitals has pushed the death rate higher.

Even as emerging economies face a surge in infections, more are lifting stay-at-home orders and reopening businesses. India, which introduced a nationwide lockdown in March, has allowed economic activity to resume in some areas of the country where the number of COVID-19 cases is small.

Brazil's President Jair Bolsonaro has called the novel coronavirus "just a little flu" and tells citizens that coronavirus shutdowns will destroy the economy and jobs.

On Wednesday, the Russian government discussed easing restrictions on activity, depending on the number of new cases in each region. In Moscow, it will allow construction companies and manufacturers to reopen, starting Tuesday.

Developing countries have little choice but to try to kick-start activity because of their fiscal and economic weakness. Unlike developed countries, they cannot offer large cash handouts or other types of aid, which means public discontent can quickly boil over. Iran, for one, has eased restrictions on business despite experts warning the move comes too soon.

Fiscal deficits are swelling in developing countries through a combination of stay-at-home orders and higher government spending, prompting anxious foreign investors to pull back. Their currencies are falling as a result, swelling external debts. More than 100 countries have sought emergency loans from the International Monetary Fund.

The pandemic will continue unless an explosion of infections in poor countries can be prevented. That could lead to widespread defaults on public debt, throwing the world economy into even greater disarray. This highlights the urgent need for aid to shaky health care systems and support for the global economy.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media