The Social Impact of the Downturn in Business and the New Context of Sustainable Development in the Context of the 2020 Economic Crisis in Developing Countries

Abstract

AbstractPurpose: The purpose of this work is to assess the nature and extent of the social consequences of the downturn in business activity, as well as to predict the new context of sustainable development in the context of the 2020 economic crisis in developing countries.Design/Methodology/Approach: Regression analysis is used to assess the impact of the social context on the sustainable development of developing economies. It determines the dependence of the manifestations of sustainable economic development on indicators of the social context of sustainable development - the level of poverty, social inequality (Gini coefficient) and average consumption per capita. To assess the social consequences of the decline in business activity in the context of the 2020 economic crisis, forecasts are made “all other things being equal” on the basis of arithmetic and standard deviations for 2019. The worst of the reasonably probable values are determined, which are substituted into the multiple linear regression equations to determine the new context of sustainable development.Findings: It has been proven that the new social context will be linked to the pronounced negative effects on sustainable development in developing countries. The sustainable development index will decline by 4.64%, GDP per capita by 104.42%, and global competitiveness by 7.38%.Originality/Value: It is shown that the social consequences of the decline in business activity in the context of the 2020 economic crisis in developing countries will be associated with an increase in poverty by 295.93%, an increase in social inequality (Gini coefficient) by 64.93% and a decrease in average per capita consumption by 60.25%. As a result, there will be an overall decline in sustainable development indicators by an average of 11.26%. Therefore, the new context of sustainable development requires active crisis management measures aimed at overcoming the «institutional trap» of alternating business downturn and demand reduction.KeywordsSocial impactBusiness downturnNew contextSustainable development2020 economic crisisCOVID-19 pandemicDeveloping countriesJEL CodeC31C33C38F63Q01Q56O11O12O31O32O33O38P25P48R11R13R58