This global corona crisis will most likely hit the world’s poorest countries hardest, posing a serious threat to nations like Kyrgyzstan and Nepal. There is a lot at stake, and Europe urgently needs to turn its gaze beyond its own borders.
Our shared experience of a collective emergency resulting from the Covid-19 pandemic could lead to a new global understanding. Certainly, there is a lot of talk of ‘this crisis bringing people together’ and the ‘pressing need for solidarity’ these days. Perhaps the widespread lockdown will indeed create a new feeling of togetherness, a feeling of shared identity in the long run, despite the social distancing enforced upon us. Yet while half the planet is currently ‘locked down’, true global solidarity seems as far off as ever; indeed, as borders everywhere – even in Europe – are closed, solidarity seems to stop at national borders.
Perhaps the crisis will prove that it harbours the potential for a fresh progressive start. But at the moment, it is bound to cause major economic disruption in world’s poorer countries, a serious cause for concern. Covid-19 could soon cause a humanitarian crisis and become a matter of sheer survival for large swathes of humanity, and while countries like Germany get their ‘bazookas’ out to fight the effects of the pandemic on their economies and shield their citizens from the worst, others such as Nepal and Kyrgyzstan have their backs to the wall. These two land-locked states both lack any substantial industrial infrastructure, leaving them dependent on imports for literally everything from fuel to basic foodstuffs.
The result is a massive trade deficit financed mainly by exporting cheap, unskilled labour and the remittances sent home by these migrant workers. Destinations for these workers are often oil-producing economies such as Russia (for Kyrgyzstan) and the Gulf states, where they usually work in construction or domestic services; many Nepalese also set out for the booming Asian economies to earn a living. Yet the collapse in the oil price, fuelled by Russia and Saudi Arabia entering into a price war to attract the few remaining buyers on the global market, along with the worldwide recession ahead, will hit these migrant workers first. The remittances from migrant workers abroad make up around one third of both countries’ gross domestic product. The earnings primarily support the worker’s families at home and are used to build homes.
As soon as these remittances will stop, it won’t just be the families dependent on them who will feel the pinch, but the entire economy as investment, trade and domestic consumption will drop drastically. The immediate consequences will be widespread deprivation and the collapse of whole economies – in countries already dependent on international donors.
The lockdowns are already hitting hard
For many Nepalese and Kyrgyz citizens, there is no other option for a better future than to leave their home country; yet, what often awaits them are poor, even dangerous working conditions. This fact has been put on the global agenda by the many deaths on the construction sites in Qatar in preparation of the 2022 football world championship. In Nepal, rumour has it that still barely a day goes by without a body being repatriated from the Gulf. Though, this also has stopped in the last weeks. The air traffic has been grounded and the country is now cut off from the rest of the world. For almost a month now, there has been a curfew for everyone except those working in what are deemed essential services like water provision, food production and distribution, public security; the rest of the population may only venture out to buy groceries. The situation for the country’s migrant workers in the Gulf is already harsh in many places, while the Nepalese tourism sector has experienced a complete collapse.
For a long time, Nepal remained unaffected by the coronavirus, with only one confirmed case - a student returning from Wuhan in January. Following its second and third cases in March ( citizens returning from France and the Gulf states), the government opted for drastic measures – understandably so, given that the country’s health system would immediately crumble if faced with a largescale outbreak. As such, the only hope is that the virus can be contained. With the country only having carried out several thousand tests to date, however, the number of unknown cases may already be high.
A day after Nepal, India too declared a three-week lockdown – a challenging undertaking in the world’s largest democracy; the open border between the two countries was closed to the greatest possible extent. While there is an official exemption for goods crossing from one country to the other, Nepal will start suffering shortages in the foreseeable future as it imports a wide range of everyday items from its southern neighbour which has already blocked the export of rice.
The fear of right-wing populist demagogues and their supporters might prevent the EU from taking significant action.
In central Asia’s only democracy, Kyrgyzstan, the situation is equally grim. After imposing controls on entrants from high-risk countries and closing schools, the government declared a state of emergency on 25 March, applying a range of draconian measures as an attempt to stop the officially low number of cases from rising. In the capital Bishkek and elsewhere, public life has ground to a halt. Here too, the drastic reaction is understandable in view of the country’s underfinanced and poorly-resourced health system, which stands to be overwhelmed by a widespread transmission of the virus.
Currently, the borders to the country’s neighbours are sealed for passenger traffic; while goods – including key imports from Russia – may pass the border from Kazakhstan, lorries are piling up at the crossing points and supply shortages, including basic foodstuffs, are looking increasingly likely. In combination with an approaching explosion in poverty as many workers, especially those who are employed in the informal sector and account for 60% of the labour force, will lose their jobs and have hardly any financial savings. The near-future scenario could represent a threat to the stability of the only parliamentary democracy in a region otherwise dominated by authoritarian regimes.
With tax revenue set to drop off a cliff just as expenditures on social welfare and health will rocket, the outlook for Nepal and Kyrgyzstan is poor in the medium term. While Kyrgyzstan has now been granted emergency funds from the International Monetary Fund and other donors in order to respond to the crisis, they will not be enough to tackle the longer term economic and social costs/impacts. Already fragile, the country’s domestic economy risks being thrown back years in terms of development, and while Europe is busy with its own crisis management, Kyrgyzstan’s gigantic neighbour China is ready to step into the void with substantial aid packages.
China’s ‘soft power’ opportunity
Around a year ago, the European Union officially branded its second-biggest trade partner China a ‘systemic rival’. After several difficult years for western donors, during which China was able to continually expand its influence in developing countries, scepticism of its motives and concerns about potential dependency has been on the rise lately. China’s ‘Belt and Road Initiative’ has begun to lose traction as Beijing remained unable to win the hearts and minds of the people abroad.
Among Central Asian populations, suspicion towards China has always been widespread – and was aggravated by the Chinese government’s treatment of the Uighurs, a Muslim minority in the country’s western province of Xinjiang. Where China has been lacking in ‘soft power’, the European Union has benefited from upholding a rule-of-law oriented and rules-based cooperation approach; should the EU now remain absent in times of major crisis, it could lead to reputational damage and a loss of trust.
For China the current European paralysis presents a prime opportunity to work on its ‘soft power’ deficit on a large scale – even more so as Russia and India, the other major regional powers, will be largely unable to step up: while Russia will be dealing with the economic fall-out of the crisis, India will be busy fighting the virus at home.
In Nepal, currently governed by a communist administration, the door for the Chinese neighbour was already wide open. Kyrgyzstan, however, had recently been trying to reduce its dependency on China; but the approaching emergency will leave it with few alternatives. China will look to address the need for support with direct aid in fighting the pandemic and in dealing with its consequences across the region. A proactive European foreign policy should be aware of this and be ready to provide development cooperation to stabilise the countries; simply re-declaring funds already promised will not be sufficient.
It is more likely, though, that Europe will do the opposite. With borders closed inside the EU, a regression into uncoordinated measures on member state level, and the prospect of rising sovereign debt, European politics may well prove unable or unwilling to commit to substantial international solidarity during and after the pandemic. The fear of right-wing populist demagogues and their supporters might prevent the EU from taking significant action.
Though, now is precisely the moment in which the EU should step up to ensure that the development efforts of decades do not crumble. Experience has taught us that early aid interventions are far better value than dealing with the long-term consequences of humanitarian and political crises after they have taken place. Plenty of reasons for a strong European engagement during and in the aftermath of the corona crisis. Europe needs to stop navel-gazing and take the imperative of solidarity serious beyond its own borders.