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Blockchain and LDC trade during COVID-19

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  • Blockchain and LDC trade during COVID-19

    The macroeconomic context for developing country trade in the time of COVID-19

    With the rise of the COVID-19 pandemic in a deeply interconnected global economy, the socio-economic and public health impacts of the crisis are becoming more apparent. These impacts are revealing the disproportionate effect of the crisis on the least developed countries (LDCs), with consensus being a likely economic downturn that will be more severe for LDCs.

    Challenges such as disruptions to supply chains beleaguered LDCs pre-COVID, and, in response, governments across the world were creating policy environments favourable to stimulating competitiveness and value addition. The supply challenges for LDCs have now magnified, and efforts will need to continue to stimulate the economies that are most in danger.

    Mitigating the harmful effects of the current pandemic and accelerating a post-crisis recovery may well depend on how well LDC governments can overcome transaction and confidence frictions in digital commerce. Lockdowns, social distancing measures and the need for virtual engagements mean such government actions are timely.

    The challenge

    Ongoing assessments of the COVID impact on trade across the LDCs show that the failure of market-oriented, productive-sector interventions to boost sales and product offerings is a major economic risk. Analysis conducted by the Enhanced Integrated Framework (EIF) (assessing dedicated COVID-19 risk management action sheets across the LDCs), shows that this is a cross-cutting global risk that could broadly impact export earnings and the human development indicators in these countries.

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