Faced with an economic crisis that could lead to starvation or riots, a finance minister was forced to default on their country’s debt, massively devalue the currency and freeze water and electricity tariffs. The actions led to 42 transnational corporations initiating lawsuits for lost profits. This sounds like a story unfolding right now, but it is actually an account of Argentina in the midst of its 2002 financial crisis. And in the wake of COVID-19, it could certainly repeat itself in country after country as they take exceptional measures to grapple with an unprecedented economic shockwave.
The scale of the economic impact of COVID-19 is only starting to become apparent. UNCTAD has warned of a ‘looming financial tsunami’ that could cut global investment by 40% and have urged a 2.5 trillion-dollar crisis package for developing countries. Worldwide, governments have been forced to take financial and economic measures that were impossible to conceive a couple of months ago. Not only have they been forced to disburse limited public funding to strengthen health systems, to protect the poor and vulnerable, to support workers and small businesses, and to scale up unemployment benefits and social protection, they have also had to take emergency measures such as suspending payments to private companies or taking over private corporations to manufacture essential health equipment.
The government actions will put unprecedented pressure on already strained public budgets, particularly those of Global South countries. However, less well known is that they
— source longreads.tni.org | 2020