The $12 trillion ripple effect of Covid-19

The disruption Covid-19 has wrought in our lives is hard to measure. Part of that reason is scale. The prefix ‘pan’ indicates that something is all-encompassing and global, an event that is defined by its enormity. But almost conversely, the pandemic also presents a problem of inequality. The pandemic has hit everyone, but it has hit us all in different ways.

Many lives have been lost, a number that just entered seven digits. Millions have lost jobs. Others have lost trust in their fellow citizens. Entire sectors of private industry have been upended. Those who have been infected and recovered may yet deal with medical repercussions for the rest of their lives.

None of the above consequences occur in a vacuum. They are not independent repercussions, but the interdependent fallout of a global health crisis. In this vein, you can’t tackle the multiple ripples created by the pandemic as if they were isolated from one another.

That’s the conclusion reached by innumerable experts, and laid out in the Bill & Melinda Gates Foundation 2020 Goalkeepers report. In the report, the foundation shows how the pandemic has created destructive shockwaves across multiple sectors – and how to best combat these impacts.

One of the key concepts mentioned in the report is the idea of mutually exacerbating catastrophes. It’s a social science term for the snowball effect, but even that doesn’t do it justice. A snowball rolling down a mountain becomes a bigger snowball; mutually exacerbating catastrophes become an avalanche.

To translate the analogy into real world events: the economic downturn that began with Covid-19 has been massive. That downturn has cost millions their jobs and financial security. Those without financial security have had less access to medical resources. As a result, they’ve become more susceptible to Covid-19 itself. The economic impact is linked to the medical, and vice versa; this pattern has repeated itself across the world.

The impact of the pandemic is universal, but it is not proportional. The flow of those ‘mutually cascading catastrophes’ overwhelms people who are already disenfranchised. In the United States, the pandemic is disproportionately devastating to people of color. Per the Goalkeepers report, because of Covid-19, “...23 percent of white Americans said they were not confident they could make rent in August, a frightening enough statistic. Among Black and Latinx Americans, though, the number was double that: 46 percent didn’t think they could pay for the roof over their head.”

This has been the impact in the largest developed economy in the world. It’s worse when you factor in the global economic fallout in developing nations. Vishal Gujadhur, who works in development and finance policy with the Bill & Melinda Gates Foundation, says developed nations have devoted some 20% of their GDP towards Covid-19 disaster relief. Developing nations have only been able to direct 3% of their smaller GDP pools towards the same goal. Before 2020, many low and middle income countries, particularly in sub-Saharan Africa, were on an upward economic trajectory. The pandemic has wiped out those gains.

But if the pandemic has created a cascade of catastrophes, fighting the pandemic could similarly reverse its myriad societal side effects. Yes, the virus must be addressed with vaccines, but the Gates Foundation also believes that strengthening testing and delivering healthcare tools into the hands of lower-income communities is crucial.

Doing so becomes a means of building civic agency and economic strength – a strength needed for rebuilding institutions wrecked by Covid-19 and tackling global challenges. The response must be multilateral and sustained, and it will be complex - but the tools are there.

Learn more about our Global Goals and the Goalkeepers Report.