This review draws pragmatic lessons for developing countries to address COVID-19-induced recessions and to sustain a developmental recovery. These recessions are unique, caused initially by supply disruptions, largely due to government-imposed 'stay-in-shelter lockdowns'. These have interacted with falling incomes and demand, declining exports (and imports), collapsing commodity prices, shrinking travel and tourism, decreasing remittances and foreign exchange shortages. Highlighting implications for employment, wellbeing and development, it argues that governments need to design comprehensive relief measures and recovery policies to address short-term problems. These should prevent cash-flow predicaments from becoming full-blown solvency crises. Instead of returning to the status quo ante, developing countries' capacities and capabilities need to be enhanced to address long-term sustainable development challenges. Multilateral financial institutions should intermediate with financial sources at low cost to supplement the International Monetary Fund's Special Drawing Rights to lower borrowing costs for relief and recovery.
Reviewing selected policy responses in Asia and South America, this paper draws pragmatic lessons for developing countries to better address the COVID-19 pandemic. It argues that not acting quickly and adequately incurs much higher costs. So-called 'best practices', while useful, may be inappropriate, especially if not complemented by effective and suitable socio-economic measures. Public understanding, support and cooperation, not harsh and selective enforcement of draconian measures, are critical for successful implementation of containment strategies. This requires inclusive and transparent policy-making, and well-coordinated and accountable government actions that build and maintain trust between citizens and government. In short, addressing the pandemic crisis needs 'all of government' and 'whole of society' approaches under credible leadership.
The current era of financial hegemony is characterized by a dense financial actor concentration, an exacerbated reliance of many South countries on private credit and an internalized compliance of South states to financial market interests and priorities. This structural power of finance enacts itself through disciplinary mechanisms, such as credit ratings and economic surveillance, compelling many South states to respond to creditor interests at the expense of peoples' needs. As a human rights paradigm, the Declaration on the Right to Development has the active potential to redress the structural power of finance and the distortion of the role of the state through upholding the creation of an enabling international environment for equitable and rights-based development on two levels of change. First, structural policy reforms in critical areas of debt, fiscal policy, tax, trade, capital flows and credit rating agencies. Second, systemic transformation through delinking as articulated by dependency theorist Samir Amin, which entails a reorientation of national development strategies away from the imperatives of globalization to that of economic, social, and ecological priorities and interests of people.