By Jan Rieländer, Head of Multidimensional Country Reviews, OECD Development Centre
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.
The COVID-19 pandemic continues to spread fast. As of April 15th, cases have been reported in 181 countries and deaths in 150. Just two weeks earlier, at the beginning of the month, death from COVID had only been reported in 128 countries (Figure 1).
Figure 1 – Countries with COVID cases and deaths, by income group, as of April 15th, 2020
The fast global spread is quickly changing the geography of who is affected. Currently, the virus is showing the heaviest impact in the advanced economies of Europe, North America and East Asia, which together account for 80% of confirmed cases and 88% of deaths attributed to COVID-19. Just six weeks ago, on March 1st, China accounted for over 90% of both confirmed infections and deaths, while advanced economies accounted for less than 3% of global COVID deaths at the time. By mid-March, China’s share on both counts had dropped to 50%. By mid-April, China has largely reopened its economy as well as the city of Wuhan where the virus originated, and only accounted for 2.5% of global deaths and 4.1% of global cases (Figure 2).
Figure 2 – The changing geography of COVID, as of April 15th, 2020
The true extent of the current spread of COVID is hard to grasp, but it will increasingly hit poorer countries. As advanced economies are experiencing the full blow of COVID and have enacted drastic social distancing measures, the pandemic continues to spread throughout the rest of the world; albeit at seemingly different speeds. The number of afflicted lower middle income and low income countries roughly doubled over the last month from 37 countries in mid-March to 70 countries in mid-April (Figure 1) and lower middle income countries are showing the fastest doubling rates of COVID victims (Figure 3). While the official numbers seem to suggest that low income countries are faring somewhat better in terms of fatalities (Figure 3), the real situation is difficult to gauge. Tests are most likely very limited and anecdotal evidence suggest that official figures can fall far short of the reality, once burial or other indicative observations are taken into account. At the same time, the younger populations in poorer countries might indeed suffer fewer fatalities from COVID. Nevertheless, taken as a group, lower middle income and low income countries will most certainly face continuous growth in both cases and fatalities.
Figure 3 – Days it took to double the number of deaths, per country income group (average over 10 previous days), as of April 15th, 2020
While we get better at understanding the spread of COVID, the world remains in experimentation mode on the policy response. Several billion people globally find themselves in lockdowns to enforce social distancing and stop the spread of the disease, mostly in Europe and North America, but also in India, South Africa and Rwanda among others. At the same time, with South Korea and Chinese Taipei in Asia, a few advanced economies are successfully experimenting with other measures, avoiding complete lockdowns with their enormous economic costs and limitations of individual freedom. Testing strategies have equally varied widely, ranging from only testing those with severe symptoms, to more aggressive and targeted testing based on risk. The latter having been much more effective. Viet Nam is a lower middle income country that has been successful with a lower cost strategy, building on more targeted lockdowns, extensive public information campaigns and the creation of local testing capacity.
As the epicentre of the pandemic continues to move, the world urgently needs response protocols that build on what has worked and are adapted to the circumstances of each country and community. Beyond Rwanda’s and India’s lockdowns, out of the 70 lower middle income and low income countries with confirmed infections, 40 have closed their schools and/or implemented curfews and partial lockdowns of urban areas. Many observers – including on this very Development Matters platform (e.g. on West Africa, on Asia, on Latin America), have pointed out that younger populations, informal economies and often precarious sanitary and living conditions in many areas of the world should change the calculation of social distancing as the best measure. Moreover, poorer countries do not have the financial resources and policy coordination capacities to mount the type of public response that is necessary to sustain societies and economies through lockdowns. These limitations create the need for careful targeting of policy measures, as well good understanding of how health responses in lower middle income and low income countries can be best combined with other economic and social measures to protect their economies and vulnerable groups, and to improve their resilience in the long-run. To respond to the specific situation of each country, we urgently need to devise response protocols that build on what has worked and allow for adaptation to the specific needs of each country.
The OECD Country Policy Tracker is a tool for building these protocols. The tracker follows containment measures (quarantine, travel bans, closure of schools and public spaces), health measures, financial support to individuals, households and firms, as well as monetary policy measures in real time. As of April 9, its coverage has been expanded from 52 to 92 countries, including many lower middle income and low income countries. With broad coverage of the different economic, social and geographic conditions, we will be able to better understand the evolution of policy responses to the pandemic in each context and infer possible clues as to their effectiveness. For example, the Tracker will feed policy discussions among the Members of the OECD Development Centre to help them identify and exchange good practices about what works in specific contexts.
By using the tracker to identify the specific characteristics that make a response work, we can identify options for countries with seemingly different contexts. For example, the design of the Swiss credit support scheme that allows firms to receive a fully government-guaranteed loan of up to 10% of their annual revenue, holds important insights for countries of all income groups. Firms receive these sums within 24 hours through their customary private or public bank, using a simple and fully digitalised application process. A first comparison suggests that this programme has been much faster and more effective than those of many other advanced economies. With its emphasis on speed and simplicity, this programme can hold key lessons even for much poorer countries, where many companies operate informally, but mobile, and hence digital, banking and payment systems are widely used.
As the pandemic continues to unfold, so will the need to respond. New initiatives will be launched around the globe on a daily basis. The more we can learn about the ideas out there and their effectiveness in real time, the closer we can come towards being able to recommend the right mix at the right time for countries in need.