The impact of the global recession on the economies of developing countries is an increasingly relevant topic amidst world economic uncertainty. When a recession hits, developed countries are often hit first. However, the impact soon spread to more vulnerable developing countries, given their dependence on foreign investment and trade. One of the direct impacts of the global recession is a decline in export demand. Many developing countries depend on commodity exports, such as oil, minerals, and agricultural products. When major consuming countries experience an economic downturn, demand for these goods shrinks. For example, countries such as Brazil and Indonesia that export a lot of raw materials will feel a significant impact, which could lead to a decrease in national income. In addition, global recessions often lead to a reduction in foreign direct investment flows. Investors tend to withdraw their capital from countries that are considered risky, including most developing countries. This can result in delays in infrastructure development and investment projects that are important for long-term economic growth. During the 2008 recession, for example, many developing countries experienced a drastic decline in investment, hampering their economic growth. Exchange rate fluctuations are also a serious challenge. Amid market uncertainty, developing country currencies tend to depreciate against the US dollar. This results in an increase in the cost of importing goods and raw materials, which further makes things difficult for business people and tramples on people’s purchasing power. From a social perspective, a global recession can worsen poverty conditions. For example, an economic crisis can cause mass layoffs, thereby increasing unemployment rates. With increasing unemployment, many people have lost their source of income, which has led to increased poverty rates and social instability. In addition, global recessions often force developing country governments to tighten budgets. As state revenues decrease, the government may have to cut public spending, including in the education and health sectors. This could disrupt basic services and potentially create an undereducated and unhealthy generation. Finally, in the long term, economic uncertainty resulting from a global recession can trigger structural changes in developing countries. To overcome dependence on exports, these countries may need to invest in economic diversification. Building local industry and developing the service sector can be a strategic step towards economic independence. The impact of the global recession on the economies of developing countries is very complex and comprehensive, involving various aspects from trade to social. Appropriate treatment and mitigation strategies can help these countries reduce negative impacts and build better economic resilience in the future.
