Poverty increasing COVID-19 death rates in poorer countries 

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Poverty increasing COVID-19 death rates in poorer countries 
OrnaW / Pixabay

Senior Analyst at International Investment firm, EXANTE, Vitaliy Kin says Covid-19 death rates are rapidly increasing in poverty-torn countries and this could bring down the whole production chain, as the world relies on these countries for supplies.

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The Third world is an important gear in production chain, any problem would affect the whole world and not regions.

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The virus is hard to manage, but more counties are being affected, including Mexico, Argentina, Chile….. The epicentre has already moved to Latin America.

The biggest hindrance when reviewing anti-virus policy is poverty, in my opinion. And the problem is, it is hard to change.

COVID-19 Death Rates Increasing In Poverty-Torn Countries

If you look at all of the poverty-torn countries, their COVID-19 death rates are increasing rapidly. Whilst Europe and America is beginning to finally be on top of the virus, countries in Africa and South America, which may have been slower to catch the virus, are now struggling to get it under control.

Peru, for example has a strict lockdown policy — stay at home and even curfew. But still, it has not been able to stop the great outbreak. The daily death toll, which yesterday was 159, is the fifth in the world. It’s confirmed case stand at 5,772 - sixth in the world. And total cases are 129,751 - making it twelfth in the rankings.

This is because there are 49 per cent of families without a refrigerator, so they are forced to go to a market daily to buy food, and masks are insufficient. While government release cash for bailout, only 38 per cent of adults have a bank account, so many have to line up to collect money. Those who breach lockdown rules are then also locked up in a crowded jail where there is a high risk of infection. The medical system is going to collapse.

Big Outbreak In Brazil

There is also a big outbreak of Coronavirus in Brazil, with the daily death toll already surpassing the US. Brazil at 806 deaths daily ranks first, and US is second with 505.  However, total confirmed case in Brazil are 376,669, which are currently lower than in the US, which stands at 1,706,226.  But the population of Brazil is just 212,405,664 and US is 330.806.424. The Brazil President Bolsonaro has not taken the virus seriously and said it is just a small flu. He does not want to launch a Stay At Home policy and still goes out for mass gatherings without a mask. All he wants is to bloom the economy, but he has been faced with much objection from the cabinet. There are 14,000,000 Brazilians living in poverty and the risk of a great outbreak is quite high.

I believe that the third world is now a time bomb. Peru, Chile and India may have a bigger outbreak soon. Under globalisation, no country can stand alone. When re-opening economies we need to be mindful that an outbreak from the third world it surely going to bring great hindrances to recovery.

As a result stocks will rise and Gold will fall. Gold has lost its position as a safe haven because the potential vaccine has taken its place.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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