The economic impact of the global pandemic on developing countries is significant and varied. Many of these countries face serious challenges in health, social and economic aspects. In an economic context, this crisis resulted in reduced growth, increased poverty, and labor market disruption. One of the main impacts is the decline in foreign direct investment (FDI). Investors tend to reduce risk by withdrawing their investments. This affects much-needed infrastructure projects, hinders industrial development, and results in job losses. According to UNCTAD, foreign investment in developing countries declined by 30% in 2020, creating long-term impacts on economic stability. The tourism sector also suffered a heavy blow. Developing countries that depend on this sector for foreign exchange earnings and job creation are feeling the impact directly. The level of international tourist arrivals has plummeted, causing many hotels, restaurants and small businesses to close. For example, countries such as Thailand and Indonesia experienced drastic declines in flight ticket and accommodation revenues. Global supply chains were also disrupted, leading to delays in the supply of goods and raw materials. This has a negative impact on local industrial production. Products that are usually exported are at a standstill, and developing countries that rely on exports are facing a liquidity crisis. Market uncertainty makes it difficult for local producers to survive, so many are forced to lay off their jobs. Governments in developing countries must face health emergency measures that require large budget allocations. This often comes at the expense of investment in infrastructure development and other public services. Countries such as Ethiopia and Bangladesh were forced to shift their budgets to deal with the pandemic, which reduced spending on education and health long-term. Global poverty is also increasing rapidly. It is estimated that more than 100 million people will fall into extreme poverty as a result of this crisis. Weak social protection programs in many developing countries leave vulnerable populations worse off. Children are the group most affected, with long-term impacts on their education and health. The agricultural impact is no less important. Lockdowns and mobility restrictions disrupt the distribution of agricultural products, causing shortages and spikes in food prices. Countries dependent on subsistence agriculture are having difficulty surviving. Climate uncertainty is also exacerbating the situation, with farmers struggling not only against COVID-19 but also extreme weather. Innovation and digitalization are opportunities. Developing countries are being forced to adapt to new technologies, driving growth in the e-commerce and fintech sectors. The use of applications for online shopping and digital payments is increasing rapidly. However, access to technology remains a major challenge, with the digital divide exacerbating socio-economic problems. Overall, while the global pandemic is bringing grave challenges to developing countries, it is also creating opportunities for fundamental reform and innovation. The rise of the technology sector and the contribution of local communities in fighting the pandemic show new hope.
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