The global response

The coronavirus has plunged the global economy into a new phase of uncertainty and created extreme shock which made all its other problems look smaller. Since emerging in the Chinese city of Wuhan in late 2019, the virus has spread to almost all countries and territories in the world. To stem further spread, authorities around the world implemented measures to lockdown countries to varying degrees, which include closing borders, shutting schools and workplaces, and limiting large gatherings. Those restrictions, which the IMF called the “Great Lockdown”, brought much of global economic activity to a halt, impacting businesses and jobs.

To understand and explain the dramatic impact of the Covid-19 pandemic, one needs to look first at the economic structures of neoliberalism. The neoliberal phase of capitalism rests on fictitious capital, a vast expansion in debt creation, deregulation, outsourcing, and privatization of almost all public services such as energy, water, trains, health, education, roads and prisons. Neoliberalism treats healthcare as a private good for sale rather than a public good paid for with our taxes. This relocation of healthcare from the state to the free market has a detrimental effect both on access to healthcare services and the quality of what is affordable for many people. In many countries, the number of hospital beds were reduced, sections of essential healthcare were privatized and/or outsourced, and serious cuts were made in health budgets. Forty years of neoliberalism across the continents, especially in the so-called “advanced” western economies, have left the countries ill-prepared to deal with a public health crisis of this kind. Preventative medicine is a massive undertaking that requires heavy investment in research and development and only states can afford such undertakings, but neoliberal policies have meant that public investment in infrastructure, equipment, research and development of vaccines, medicines and skills has been significantly reduced, whereas private pharmaceutical companies have little or no interest in non-remunerative research on infectious diseases such as Covid-19.