Risk and Resilience: How East Africa could bounce back from the COVID-19 Pandemic

Development Matters Africa, Covid-19 , , ,

By Andrew Mold, Head of Regional Integration and the AfCFTA, Economic Commission for Africa, Office for Eastern Africa, Kigali, Rwanda

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

 

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Nairobi, Kenya: Skyline cleared as pollution has slowed down during lockdown due to the COVID-19 Pandemic, April 2020. Photo: Youssef Abu Aly/Shutterstock

A hitherto rapidly growing but vulnerable region

The best-laid plans of mice and men often go awry. Prior to the announcement of a global pandemic on 11th March by WHO, our office was about to a release a report which spoke of the fairly rosy prospects for East Africa in 2020, after a decade of solid growth. That report recognised the persistence of serious developmental challenges but highlighted major improvements not just in economic growth (the region has been the fastest growing sub-region in Africa since 2014), but also in human development. One simple statistical illustration of this – life expectancy over the last decade has risen by an unprecedented 6.7 years on average.

Just a few months later we are now presented with a quite different panorama, both for the global economy and East Africa. For the region, 2020 – and quite possibly 2021 – is no longer going to be characterised by a continued economic dynamism, but rather a sluggish economic malaise, as countries wrestle with ballooning fiscal deficits, deteriorating trade balances, and a serious disruption to normal economic activity.    Continue reading →

COVID-19: Can corporates be leaders in community support?

Development Matters Covid-19, Private Sector , ,

By Mr. V S Parthasarathy, President, Mobility Services Sector, Mahindra Group; Member of the Group Executive Board, Mahindra & Mahindra Ltd.; President, Bombay Chamber of Commerce and Industry

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

shutterstock_109766645It is invigorating to see people, communities and organisations across the world answer the clarion call to provide support to those in need. We are seeing waves of good news roll in – from students driving out to show their appreciation to teachers, to families standing outside hospitals to thank front line medical staff.

Corporations have also pitched in to help governments and citizens fight the coronavirus pandemic. Many businesses are using their resources and expertise to shape their response. T-Mobile partnered with Verizon, AT&T, and iHeartMedia to donate nearly 40,000 phone chargers to hospitals in the US for isolated patients to stay connected to loved ones. Subaru has partnered with Feeding America to help provide 50 million meals nationwide to people impacted by COVID-19. The Tata Group pledged Rs 1,500 cr towards relief funds. 3M, Prada, Gucci, Tesla, Ford, Apple, the maker of Absolut Vodka and Jameson Irish Whiskey, owner of Zara, and many other businesses, have converted production lines to manufacture short-supplied personal protective gear and medical supplies. In short, they are stepping far beyond their ordinary workflow.

To respond, adapt and recover from this crisis, I believe companies ought to focus on three basic fronts.

Continue reading →

Haitian Families and Loss of Remittances During the COVID-19 Pandemic

Development Matters Country systems, Covid-19, Latin America/Caribbean , , , , , ,

By Toni Cela, Senior Research Associate of the Migration for Development and Equality (MIDEQ) hub & Co-ordinator of the Interuniversity Institute for Research and Development (INURED), and Louis Herns Marcelin, Co-Director of the MIDEQ project; Professor at the University of Miami; & Chancellor of INURED

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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Port-au-Prince, Haiti. Photo: Rafal Cichawa/Shutterstock

Migration has always featured prominently in Haiti’s history. At times forced, as in the case of sociopolitical repression and the aftermath of disasters, induced to fulfil labour and workforce needs in the Caribbean and in other periods voluntary as in the circulatory movement recorded in the Caribbean, South and North America. Over the past decades, migration in Haiti has evolved from a survival strategy for individual migrants and their families to now buttressing the local economy through the transfer of remittances. This reality was made evident during the 2010 earthquake rebuilding effort when the Haitian diaspora identified itself as Haiti’s “single largest donor” citing “the magnitude of its remittances to the Haitian Republic and how those contributions totalling [USD] $2 billion dollars annually allot[ed] for 30% of the GNP .”  In comparison, public revenues, excluding grants, represent 13% of GDP and are projected to fall to 10% in 2020.

Remittance transfers to Haiti have continued to grow over the past decade, the lion’s share of funds originating in countries throughout the Americas, particularly the United States, where the majority of Haitians have settled. Yet, the global economic crisis brought on by the COVID-19 pandemic poses a serious threat to the global remittance economy. For Haiti, reduction in remittances will further weaken an already feeble economy while negatively impacting the livelihood and health of families and communities. Continue reading →

COVID-19: Forging a new social contract in the Middle East and North Africa

Development Matters Africa, Covid-19, Social Protection , , , , ,

 By Rabah Arezki, Chief Economist for Middle East and North Africa Region at the World Bank and Mahmoud Mohieldin, United Nations Special Envoy for the 2030 Agenda

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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Egypt, Hurghada: Disinfection of a street during the coronavirus outbreak, March 2020. Photo: Aleks333/Shutterstock

The COVID-19 crisis and its dual shock of disease and falling oil prices have brought to light the underlying flaws of Middle Eastern and Northern African (MENA) economies today. Flaws that authorities must fix if the region is to prosper.

At the global level, there will likely be a ramping up of the role of the state to eradicate the virus and protect economies from depression. State intervention is already high in the MENA region (see Figure 1). How well this helps countries cope first with the pandemic and then its aftermath depends on their ability to refocus, be more transparent, and develop accountability mechanisms.

Figure 1. Government Consumption in GDP

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Continue reading →

How COVID-19 can change incentives for development co-operation

Development Matters Covid-19, Development finance , , ,

By Nilima Gulrajani, Senior Research Fellow, ODI

This blog* is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

cooperation-hands-puzzle-world-2There is nothing new in accusing bilateral donors of repurposing foreign aid to serve their domestic national interests. Even before the current pandemic, donors had been slashing aid in exchange for middle-class tax breaks, twisting the definition of official development assistance (ODA) to allow for the inclusion of expenditures in wealthier countries, and tying aid to the uptake of domestic consultants. So, what happens now, as economic and social needs expand globally with every case of COVID-19 detected and every grave marked?

The initial vital signs of international collective action are not promising. Some politicians have come under flak for donating personal protective equipment to other countries just before domestic demand skyrocketed, even if this equipment was set to expire and the favour returned in kind. Others stand accused of using medical aid to further diplomatic ambitions. Yet others have gone even further, seemingly keen to upend global co-operation and dismantle the very institutional architecture able to marshal both the transnational networks and political leadership required to detect, monitor and eventually stop this unpredictable pathogen. In short, there are worrying signs about the possibility of upholding a functioning multilateral co-operation system, even among supposedly like-minded actors. Continue reading →

Remittances during COVID-19: Reduce costs to save livelihoods

Development Matters Covid-19, Development finance , , , ,

By Paul Horrocks, Manager, Private Finance for Sustainable Development; Friederike Rühmann, Policy Analyst; and Sai Aashirvad Konda, Consultant at the OECD Development Co-operation Directorate

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

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Mumbai, India – Migrant workers return home during a nationwide lockdown due to COVID-19, on May 2020. Photo: Manoej Paateel / Shutterstock

The COVID-19 crisis is severely affecting migrants’ ability to send money home to their families.

The World Bank predicts a decline in global remittances by about 20 percent in 2020 due to the economic downturn caused by the COVID-19 pandemic. This decline threatens the livelihoods of millions of households in developing countries, and the international community must urgently invest in innovative, resilient, and cost-reducing solutions to support developing countries amid the crisis and in their recovery.

Impact of COVID-19 on remittances

Remittances serve as an important source of income for millions of households in developing countries and act as a safety net in times of emergencies, natural disasters and crises. In 2019, the flow of remittances reached a record flow of $554 billion to low-and middle-income countries. Continue reading →

Ethiopia’s Response to COVID-19

Development Matters Africa, Covid-19 , , ,

By Arkebe Oqubay, Senior Minister and Special Advisor to the Prime Minister of Ethiopia, distinguished fellow at the Overseas Development Institute and author

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Ethiopia-coronavirus-shutterstock_1190087614Africa Day this week is remembered at a time when the world faces an unprecedented crisis. Africa is not immune and has seen over 110,000 cases of COVID-19 and 3,300 deaths. To the surprise of many, African governments have taken bold and swift measures in response to the pandemic, despite their resource constraints and weaker economic base. However, the responses have not been uniform, and the outcomes are likely to be uneven.

Ethiopia is one of the countries that put bold measures in place early on, even though its approach has been an unconventional one. Unlike most African countries, Ethiopia did not introduce national lockdown. The country’s ‘sustained moderate to strong measures’ strategy focused on taking bold measures early and scaling them up gradually. Preparations began in January and February, and a national response was declared with Ethiopia’s first reported case on 13 March, with tighter measures including compulsory quarantine and an increased public awareness campaign. A state of emergency was declared on 8 April. Continue reading →