Since the beginning of 2020 when the first case of COVID-19 was reported, everything about

how the world operated was forced to change in a way and to a degree nobody had seen before.
While COVID-19 is a health-related disease, it also infected the economies of countries all
around the world and will continue to so as countries try to recover from this unprecedented
time. This essay will assess these impacts of COVID-19 on the economic growth of developed
and developing countries through an analysis of relevant economic growth rates figures of
developed and developing economies as well as the effect on these countries’ positions on the
hockey stick growth trajectory.

The economic growth of a country is an increase in the gross domestic product (GDP) of that
country over a certain period, usually a year or a quarter (Amadio, 2020). Economic growth can
be viewed as a machine that produces economic outputs through various inputs such as
equipment, labour and land. These outputs can be increased through technological innovation, an
increase in efficiency of the production process and a general increase in the inputs (Feldman,
Hadjimichael, Lanahan, Kemeny, 2015:6). In this case the output would be an increased gross
domestic product of a country which is easy to measure as it is just the measure of the total value
of all the goods and services produced within that country over the relevant period.

Hockey stick growth is the is instantaneous exponential growth after experiencing linear growth
for a long time. The point of change or inflection on the graph can be caused by several different
events or factors for different countries. For example, Britain’s hockey stick growth was a result
of the Industrial Revolution which started in the late 18th century. The Industrial Revolution was
the cause of a substantial growth in the level of technology available and led to several ways of
producing goods and providing services making existing businesses more productive and well
organised (The Editors of Encyclopedia Britannica, 1998). As a result of this innovation the
economy of Britain transformed from one based on agriculture to one based on large-scale
industries and automated manufacturing. The Industrial Revolution led to Britain experiencing
hockey stick growth in factors such as GDP per capita and labour productivity resulting in
economic growth of great magnitude relative to their growth before the Industrial Revolution.
For other countries, this level of growth only came when they were freed from the colonial rulers
and other European interferences. This occurred in countries such as India and China in 1947 and
1949 respectively and led to significant improvements in their standard of living and the
distribution of wealth (The Core Team,2017).

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The effects of the hockey stick growth of these countries are present today because as of
December 2020, China has the second highest nominal GDP in the world while the United
Kingdom has the fifth highest nominal GDP followed by India with the seventh highest nominal
GDP (World Population Review, 2021).

Since the beginning of COVID-19 in early 2020, countries all around the world have reacted
differently to this virus at different rates and with varying degrees of severity. One of the first
world-wide precautions taken was to social distance, sanitize always wear a mask when in public
which is still happening in most countries around the world. As cases continued to rise, large
gatherings were banned and contact tracing procedures were introduced along with curfews.
However, these precautions were not thorough enough and many countries around the world
including South Africa entered a national lockdown. South Africa initially declared COVID-19
as a national state of disaster on the 15th of March 2020 followed by their national lockdown on
the 27th of March 2020 (Al Jazeera, 2020). Throughout South Africa’s lockdown period the sale
of alcohol and cigarettes was prohibited and only specific groups of essential workers were
allowed to continue to work. The South African government also recruited 217 infectious disease
experts to help combat the spread of the virus and support the country’s health response to
COVID (International Monetary Fund, 2021). . Most countries followed this blueprint of
restrictions with varying degrees of success with one of the most successful countries being New
Zealand which has not had more than ten new daily cases since the 11th of April 2021
(WorldOMeter, 2021).

As mentioned in the introduction, COVID-19 is a health-based virus but led to far-reaching

effects on economies around the world as well. These effects are proven to be present due to the
fact that the global economy shrunk by 4.4 percent in 2020 (Amusa et al., 2021:8). It is evident
that there has been a negative effect on the economic growth of countries around the world due
to COVID, however, the severity of these effects differs when ananlysing countries that are
developed versus countries that are still developing. COVID-19 contributes to this comparison as
well because countries that are still developing tend to have a higher number of cases than
developed countries, limiting the economic activity of these countries more than developed
countries due to an inferior availability health resources as well as inferior levels of these
resources. If you look at a developed country such as Australia, as of the 17th of May 2021, it has
had a total of 29 967 confirmed COVID-19 cases (World Health Organisation Coronavirus
Dashboard, 2021).

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Due to faster and more severe protective measures discussed in the previous paragraph
implemented by their government, Australia was able to limit their GDP’s decline by just 1.1
percent overall in 2020 with a promising bounce-back in December where their GDP rose again
by 3.4 percent (Chalmers, Hutchens, Janda, 2021). So, while COVID may have temporarily
decreased the economic growth of Australia, they were had the resources available to persevere
and are now on the rise again. However, if you look at a developing country like South Africa, as
of the 17th of May 2020 they have had just over 1.6 million confirmed cases (WHO Coronavirus
Dashboard, 2021). South Africa has experienced a decline in GDP of 7 percent in 2020 with just
a 3.2 percent predicted increase in 2021 (Amusa et al.,2021:9). This proves how the Coronavirus
has had more of a negative effect of developing countries with less resources available such as
South Africa. Developing countries that rely heavily on income sources such as tourism and
mineral prices like South Africa will continue to be negatively affected by the Coronavirus until
borders reopen and international trade resumes and as a result their economic growth will be
stunted.

From the evidence stated above, it is fair to say that COVID-19 has stunted the vital growth and
progress of these less resourceful, developing countries. With the world now more
interconnected than ever before, many developing countries could have been on the verge of
their sudden surge of economic growth along the hockey stick curve. While the countries may
still experience this growth and end up in the same position on the curve, the Coronavirus has
been the biggest setback these countries have seen in modern times and it will take a few years
for most of them to recover while still trying to maintain health and safety protocols and achieve
any substantial economic growth.

To conclude, COVID-19 has had varying degrees of impact on the economic growth of countries
all around the world with developing countries being most affected. This has been proven by the
change in GDP levels since the start of 2020 caused by the resources available to different
countries to fight this pandemic as well as the level of precautions taken by different countries
and their varying degrees of success. The time to recover from this virus will be longer for
developing countries and they will need production and trade to return to normal before they can
experience any new growth along the hockey stick trajectory.

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