The economic impact of the global pandemic on developing countries is very significant and complex. In many aspects, these countries are more vulnerable due to their high dependence on certain sectors, such as tourism and commodities. Border closures and travel restrictions have resulted in revenues from the tourism sector plummeting. For example, countries such as Indonesia and Thailand have experienced a drastic decline in tourist arrivals, which has had a direct impact on national income. Apart from that, the distribution of goods and supply of raw materials was also disrupted. With many factories forced to close or operate at low capacity, developing countries that rely on imports are experiencing price spikes and shortages of goods. This causes higher inflation and a decrease in people’s purchasing power, resulting in many individuals falling into poverty. The agricultural sector also faces challenges. Farmers have difficulty reaching markets due to mobility restrictions. Delays in the distribution of agricultural products lead to decreased production and unstable prices. As a result, food security has become a serious issue, especially in countries that are already vulnerable to food crises. Foreign direct investment (FDI) was also affected. Many investors choose to hold their investments due to economic uncertainty. This decline in FDI has resulted in a lack of innovation and infrastructure development that is essential for long-term growth. For example, countries such as Nigeria and Ethiopia experienced a sharp decline in FDI which impacted development projects. Developing country governments are faced with major challenges to overcome the impact of this pandemic. Many governments are implementing stimulus programs to protect the public and businesses. However, budget constraints and increasing debt make implementing the program difficult. The large informal sector in many of these countries is also unprotected, worsening economic conditions. Changes in consumer behavior as a result of the pandemic are also a challenge in themselves. People have become more careful in shopping, causing demand for goods and services to decline. This forced many small businesses to close and resulted in increased unemployment. Apart from that, access to digital technology is very important. Companies that do not adapt to digital transformation are forced to face the risk of bankruptcy. However, on the other hand, the pandemic has also created new opportunities, especially in the field of e-commerce and digital services, which have recorded rapid growth. Disrupted education during the pandemic has long-term impacts on human resources. Many children in developing countries lose access to quality education, which can perpetuate the cycle of poverty. Limited distance education initiatives indicate a significant digital divide in these countries. In conclusion, the economic impact of the global pandemic on developing countries shows how vulnerable they are to facing the global crisis. Responsive policies are needed to promote sustainable recovery and build resilience for the future.
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