All over the world, Covid-19 is putting jobs and incomes under threat. As UNCTAD’s most recent Trade and Development report outlined, more than 500 million jobs across the globe are at risk during the crisis, and at least 100 million won’t be coming back. And this is only half the story. Much of the world’s population never had formal employment to begin with; for them, the future looks particularly bleak. Between 90 to 120 million people are likely to be pushed into extreme poverty by the pandemic.

UNCTAD’s report points out that the dire predictions about the potential impact of the crisis are not preordained; what happens between now and the discovery of a vaccine, and the shape of the recovery after that, will be determined by policy decisions made by governments. In much of the rich world, jobs protection schemes of one kind or another seem to have limited the impact of the crisis on formal employment so far. The main outlier is the United States, which had no such centralised scheme. While statistical estimates aren’t all that reliable in the midst of a crisis like this, unemployment claims, which tend to understate the scale of the problem, hit one million in the US this August.

In the Global South, the picture is far bleaker. UNCTAD’s report points to precarious work conditions, high debt levels and pressure from international financial markets as the main constraints on Global South states seeking to respond to the crisis. The report claims that the Global South is facing a $2-3 trillion financing gap as a result of the pandemic. If this gap is not bridged, many of these states will simply be unable to implement the public health and employment support measures needed to tackle the crisis.

One of the most significant challenges for states in the Global South is the scale of the euphemistically termed ‘informal’ economy, which often employs the majority of the population. Street vendors, transport workers and waste collectors make up a significant proportion of the urban economies of the Global South, which have swelled substantially in recent years due, in part, to falling employment in agriculture. Providing targeted support for these workers is much harder than those in ‘formal’ employment – i.e. employment recognised by the state.

Yet these workers tend to be the ones who will require the most help. Many live on or near the poverty line, have few savings and large families. Informal workers are also disproportionately likely to live in informal housing, where crowded conditions and poor sanitation facilitate the spread of the virus. In fact, many of these workers may already have had the virus – recent research suggests that 80% cases of Covid-19 in Africa have been asymptomatic, and the mortality rate for Covid-19 on the continent is much lower, meaning the virus may have swept through the population almost unnoticed. This is substantially due to Africa’s youthful population and lower life expectancy.

Even if the virus may prove less deadly among younger populations in the Global South, the economic impact of the looming global economic crisis will be severe. Indeed, the entirely avoidable economic consequences of Covid-19 may end up killing more people than the virus itself. With global demand low, and unlikely to recover any time soon, production – and therefore commodities prices, upon which Global South states depend – will remain subdued. As the jobs crisis worsens in the Global North, export earnings and remittances will be unlikely to recover.

Unless these states are able to reach an agreement with their creditors, many will default. When they do, vulture funds will swoop in to buy up their distressed debt and sue governments who fail to repay them. As the authors of UNCTAD’s trade and development report put it:

“The inability of the international community to agree on comprehensive debt standstills and write-downs, the resistance to rapid provision of appropriate levels of emergency liquidity and the reluctance to rein in rogue bondholders in sovereign debt negotiations along with the sight of vulture capital already hovering ominously over distressed economies are early warning signs that things could get worse – far worse.”

The pandemic did not cause any of these issues – it simply exacerbated them. As Aaron Benanev has argued in his book Automation and the Future of Work, the world was already running out of jobs before the pandemic hit. In part, this comes down to what he calls the ‘green revolution’: “in 1983, the majority of the world’s workers were still in agriculture; that figure has since fallen to 25 per cent.” The growth of the ‘informal economy’ in the Global South was a symptom of this problem. The growth of the ‘gig economy’ and the precaritistaion of employment in the Global North reflects the growing imbalance of power between capital and labour in a world where jobs aren’t being created as quickly as people.

The fact that these problems are being felt most keenly by people in the Global South is a symptom of the inequalities of power that exist within the capitalist world system, and the institutionalisation of these inequalities in bodies like the IMF and the WTO. Neoliberal globalisation kept these states trapped in poverty, unable to industrialise and instead consigned to engage in commodities extraction and low-value-added production under the watchful eye of global monopolies. The poorest states were those first to experience neoliberal ‘shock therapy’ during the debt crisis of the 1980s; privatisation, financialisation and the general retreat of the state from economic life have compromised the resilience of these states and their people further.

What the pandemic has made abundantly clear is that we are sleepwalking into a world without a future – one facing climate breakdown, structural unemployment and falling living standards, and in which the burden of each of these issues will fall most heavily on the poorest. The recovery from the pandemic may be our last chance to change course; we must use it to demand a global Green New Deal.

UNCTAD’s previous trade and development report pointed out that ‘green’ stimulus programmes reliably create three times as many jobs as ‘brown’ ones. Such a response to the crisis is a no brainer in the global North. But in the global South, stimulus will not be possible without finance – which is why we need a debt jubilee for the world’s poorest states. The alternative is a world torn apart by poverty, inequality and ecological catastrophe.