The Best Medicine

The editors of the Washington Post remind us that the poorest countries will need help in dealing with COVID-19:

GOVERNMENTS OF the world’s 20 largest economies — the Group of 20 — agreed Wednesday to a debt-service moratorium worth as much as $20 billion for the world’s 76 poorest nations, through the end of the year. The relief applies to government-to-government loans and may be renewed for an additional 12 months. The G-20 called on private lenders to grant similar forbearance; the Institute of International Finance, representing bank lenders to developing-nation governments, has spoken favorably about the idea (but not formally agreed). The International Monetary Fund (IMF) already offered some debt relief and pledged to deploy at least $1 trillion in lending power.

All of the above are steps in the right direction, if likely only the beginning of what it will take to prevent the coronavirus crisis from undoing the past two decades of progress in the world’s less developed countries, during which global poverty rates fell by more than 50 percent. Even as the United States, China, Europe and Japan are themselves reeling from public health and economic calamities, it is a moral imperative to help the developing countries and their people. It is also a matter of self-interest: We need healthy customers in emerging markets; the virus itself cannot be contained if developing countries must spend scarce resources on debt service rather than public health.

If we are really concerned about poor countries, the very best thing we could do for them is to get American consumers back on their feet. Whatever the role of other countries as markets for U. S. goods, it’s dwarfed by the role that U. S. consumers play in the economies of those countries.

We might also consider that American companies’ disentangling their supply chains from China and relocating them in not just one but multiple other countries would be of enormous economic benefit to the rest of the world.

It may also bear mentioning that about 150 countries, most of them poor, are paying debt service to China.