NEW YORK - In New Delhi, a fruit vendor whose sales have dropped by half now dilutes the milk she serves to her five children. In central Turkey, a company that runs hot air balloon rides for tourists has banished its 49 employees to indefinite leave while cutting their wages by half.
"This will be as bad, or potentially even worse, than the global financial crisis for emerging markets," said Mr Per Hammarlund, chief emerging markets strategist at SEB Group, a global investment bank based in Stockholm."It is grim." The pandemic has triggered a sharp reversal of international investment away from emerging markets and toward the safety of US government bonds.
Most economists assume that a worldwide recession is already underway - a synchronised downturn that is punishing countries indiscriminately, turning traditional economic strengths into alarming vulnerabilities. In wealthy nations, quarantines have been mandated, while governments and central banks have unleashed trillions of dollars in spending and credit to limit the economic damage. But in poor countries, where families cram into teeming slums, quarantining may be impossible. People who support themselves by collecting scrap metal harvested from garbage dumps risk hunger if they stay home.
Mr Mahender, 60, who shines shoes, slept by the roadside, his head propped on the cloth bag that holds the tools of his trade. Before the coronavirus, he earned about 400 rupees per day. Now, he makes 100 rupees. Argentina was in peril before the pandemic. Its currency, the peso, lost more than two-thirds of its value in 2018 and 2019, as inflation exceeded 50 per cent. Its economy contracted by 2 per cent last year, the continuation of a long-running slide in national fortunes. Government debt approached 90 per cent of annual economic output, a flashing signal of distress.
In Turkey, companies are saturated in debt, much of it in foreign currencies. The debts are the result of President Recep Tayyip Erdogan's pursuit of growth at any cost. He has jailed his enemies and seized their assets, while protecting those who borrow to finance monuments to his prowess, like a new Istanbul airport.
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