COVID-19 pandemic: threats to SMEs in poorest nations require swift policy action

By Frank Hartwich and Jenny Larsen, United Nations Industrial Development Organization (UNIDO)

Factories around the world roared into action again in the second half of 2020, following the COVID-19-related slump that brought large parts of industrial production to a standstill in early 2020. The bounce back, led by Europe, China and other parts of Asia, has been faster than expected, with most of the losses felt in the first half of 2020 recovered by early 2021, although there are big differences between regions and sectors.

Using the limited data available, it appears that manufacturing in selected LDCs has also staged a recovery. UNIDO’s Index of Industrial Production (IIP) – only available for four of the 46 LDCs – showed a dramatic drop in the early part of 2020, followed by a sharp rise in early 2021, although a closer look at the data reveals a nuanced picture. Mozambique and Senegal saw little impact from the pandemic whereas in Bangladesh and Rwanda the effects were much stronger. In general, within low-tech industries which predominate in LDCs, the food industry benefitted from the pandemic while other sectors such as textiles, clothing and leather were hit particularly hard.

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COVID-19 is a developing country pandemic

By Indermit Gill, Nonresident Senior Fellow at Brookings and Philip Schellekens, Senior Economic Advisor at International Finance Corporation (World Bank Group)

“Has global health been subverted?” This question was asked exactly a year ago in The Lancet. At the time, the pandemic had already spread across the globe, but mortality remained concentrated in richer economies. Richard Cash and Vikram Patel declared that “for the first time in the post-war history of epidemics, there is a reversal of which countries are most heavily affected by a disease pandemic.”

What a difference a year makes. We know now that this is actually a developing-country pandemic—and has been that for a long time. In this blog, we review the officially published data and contrast them with brand new estimates on excess mortality (kindly provided by the folks at the Economist). We will argue that global health has not been subverted. In fact, compared to rich countries, the developing world appears to be facing very similar—if not higher—mortality rates. Its demographic advantage of a younger population may have been entirely offset by higher infection prevalence and age-specific infection fatality.

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Divergent recoveries from COVID-19 in Africa require intentional action

By Anzetse Were, Senior Economist FSD Kenya

Accra, Ghana, during regional lockdown, March 2020. Photo: Shutterstock

The COVID-19 pandemic has had divergent impacts within and between economies. 2021 is already being defined by multispeed and divergent recoveries. Rich economies with USA in the lead, and China, are set for a strong recovery, mainly linked to their willingness to support incomes and deploy unprecedented fiscal and monetary support and quick COVID-19 vaccine rollouts. Low-income countries however face grimmer economic prospects due to limited access to COVID-19 vaccines and weak public finances; they will suffer more significant medium-term losses, especially affecting countries that rely on tourism and commodity exports, and those with limited policy space to respond.

In Africa, the AfDB estimates that real GDP contracted by 2.1% in 2020 with projected growth at 3.4% in 2021. Although all African economies have been affected by the pandemic, tourism-dependent economies, oil-exporting economies and other-resource intensive economies have been hit especially hard. Within countries, the sectoral impacts of COVID-19 have been varied, and women continue to be disproportionately affected by the socio-economic effects of the pandemic. This has led to divergent impacts at sector, firm and household levels. Many African households have had to resort to coping mechanisms such as reducing food consumption, dipping into savings, selling assets, looking for new forms of work, and accruing debt, with millions falling into poverty.

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COVID-19 impact on higher education in Africa

By Peter Koninckx, Strategic and Commercial Advisor, Cunégonde Fatondji, Analyst Intern, and Joel Burgos, Senior Project Manager, ShARE

Beyond the death toll and illness of millions of people due to COVID-19, businesses, healthcare, culture and education have had to cope with severe disturbances. But in our opinion, one could argue that higher-education students are amongst the most affected populations, particularly those in Africa. Although Africa is the continent with the least reported cases, the closure of higher education institutions was more widespread, and mitigation measures less effective than in other regions, according to a survey we conducted with more than 165 students across 21 African countries. No quick-fix solution exists, but the current crisis has highlighted the weaknesses in higher education in Africa, indicating where governments, international institutions, NGOs, and the private sector should focus their efforts.

Strong initial reaction to the COVID-19 crisis…

According to the Association of African Universities (IAU) Global Impact Survey on COVID-19, university closures in Africa in response to the pandemic were very effective: 77% of African universities compared to around 55% in Europe, Asia, and the Americas. However, while the percentage of higher education institutions where teaching was entirely cancelled remains low in all other regions (~3%), in Africa it is currently reported to be at 24%. Furthermore, over 40% of institutions in Africa were still developing alternative solutions at the time of the study, while other regions had already implemented them. Based on our own study, 88% of the surveyed students said that their school had discontinued in-person classes because of COVID-19.

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For greater vaccine equity, first fix these misconceptions

By Philip Schellekens, Senior Economic Advisor – IFC (World Bank Group)

As we start to see the light at the end of the pandemic’s dark tunnel, inequities in the distribution of vaccines across countries are coming under intense scrutiny. Unequal vaccine distribution is not necessarily unfair—after all, some population groups are more vulnerable than others. Yet relative to sensible metrics of need, the current inequality is excessive. Efforts to boost and balance deployment have galvanized under the clarion call for #VaccinEquity, but progress has been slow and marred by bottlenecks.

In addition to the various practical constraints—including financing, logistics, manufacturing, and patent rights—three misconceptions stand in the way: the view that COVID-19 is mainly a “rich-country disease”; a focus on herd immunity that detracts from the pressing goal of protecting the global priority group; and a belief that fixing vaccine hoarding in rich countries will fix vaccine equity on its own.

A global snapshot of vaccine inequity

Competing interests in diplomacy, economics, and global health shape the international distribution of vaccines, but overshadowing them all are universally recognized ethical principles that center on “need” and “priority for the disadvantaged.” Needs encompass a fuzzy spectrum. They include the burden of morbidity (e.g., long COVID), broader health effects (e.g., undermanaged illnesses), and wider socioeconomic effects (e.g., food security and poverty). But as long as this pandemic rages on, needs will first and foremost be defined by the vulnerability to premature death—which not only is devastating but also irreversible and hence hard to compensate for.

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Donner la priorité aux contextes fragiles dans le monde de l’après-pandémie

Par Jorge Moreira da Silva, Directeur, Direction de la coopération pour le développement de l’OCDE  

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Les chocs économiques et sociaux liés à la pandémie ou en rapport avec le climat n’ont épargné aucun pays du monde en 2020, mais ils font peser une grave menace et frappent de manière disproportionnée les contextes fragiles ou touchés par un conflit. Déjà parmi les moins à même de faire face aux chocs, et dotés de capacités d’adaptation insuffisantes, ceux-ci sont aujourd’hui particulièrement exposés à ces risques. Ils ont besoin d’urgence de plus de soutien de la part de la communauté internationale, tant pour se relever à court terme que pour renforcer leur résilience face à de futurs chocs systémiques.

Un an après le début de la Décennie d’action et de réalisations, les contextes fragiles ou touchés par un conflit se trouvent à la croisée des chemins. Avant même la pandémie de COVID-19, les 57 contextes fragiles – y compris les 13 contextes extrêmement fragiles – recensés dans la publication de l’OCDE États de fragilité 2020 abritaient près d’un quart de la population mondiale, mais aussi les trois quarts des personnes en situation d’extrême pauvreté dans le monde. Aucun d’entre eux n’est en passe d’atteindre les objectifs de développement durable (ODD) relatifs à l’élimination de la faim, à la bonne santé, au bien-être et à l’égalité entre les sexes. Là où la majorité des pays en développement non fragiles progressent, la plupart des contextes fragiles régressent : ceux qui accusaient déjà un retard voient aujourd’hui celui-ci s’aggraver.

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From COVID-19 to “neglected diseases”: Time to deliver on pharmaceutical innovation

By Werner Raza, ÖFSE – Austrian Foundation for Development Research

The pharmaceutical innovation system’s disregard of “neglected diseases” primarily affecting countries in the Global South should no longer be tolerated. A substantial reform is necessary.

Triggered by SARS-COV-2, Covid-19 belongs to the group of new infectious diseases which until now had mainly occurred in emerging and developing countries. Since the first outbreak of a SARS epidemic in 2002, millions of people have been affected by the family of coronaviruses. But it took a global pandemic with serious impacts on OECD countries’ societies and economic systems, for such a disease to receive the health policy attention that the Global South has been sorely lacking.

The share of pharmaceutical research and development (R&D) funds for diseases primarily affecting the Global South is vanishingly small. This is true for the public sector, but even more so for the pharmaceutical industry. Accordingly, they have become referred to as “neglected diseases”.

Little research and slow progress

Neglected diseases have been a major global health policy issue for decades. In the Global South, they cause hundreds of thousands of deaths and millions of illnesses every year. Often with serious long-term health consequences. Depending on the definition, neglected diseases comprise several dozen diseases, sometimes including the so-called “big three”, HIV/AIDS, malaria, and tuberculosis. But they also include “neglected tropical diseases” as defined by the WHO, such as Chagas, dengue fever and leishmaniasis, as well as other poverty-related diseases.   

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Gender-based violence: the ‘pandemic within a pandemic’ with devastating human and economic consequences

By Flavia Bustreo, Global leader for health & rights of women, children, adolescents & elderly & Former Assistant Director-General at WHO, Gabriela Ramos, Assistant Director-General for Social and Human Sciences, UNESCO and Felicia Knaul, Director, Institute for Advanced Study of the Americas, Professor, Department of Public Health Sciences at the Miller School of Medicine

Last year, in early February, we joined global leaders and Ministers from a number of countries at a landmark conference organised by the OECD on ending violence against women. The first of its kind, it reflected the rising recognition among OECD countries that violence against women is both a grave violation of human rights as well as an economic sinkhole. The COVID-19 crisis has magnified the existing ‘pandemic within a pandemic’ of violence, with devastating consequences for individuals, and for our societies and economies at large.

Even in non-pandemic times, the economic impact of gender-based violence is staggering and has traditionally been vastly underestimated. Considering only direct costs, gender-based violence reduces global gross domestic product (GDP) by 2% per year, equivalent to an annual loss of more than US$1.6 trillion. In some countries, the annual costs of gender-based violence have been estimated at more than 3.5% of GDP, nearly half of what OECD countries spend on average on all healthcare. These figures, however, are but the tip of the iceberg, accounting only for direct medical costs and immediate productivity losses. A broader model – taking account of the lost capabilities of survivors and caregivers, and how these traumas and hardships are transmitted across generations – would reveal a far higher figure of the cost of inaction.

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How West Africa’s cashew companies have weathered the COVID-19 crisis

By Violeta Gonzalez, Head of Partnerships, Outreach and Resource Mobilisation, Enhanced Integrated Framework (EIF)

April is usually cashew marketing season across West Africa – a lively affair where traders tout bags of recently harvested raw nuts to buyers, most of whom have flown in from Vietnam and India. But 2020 was not a usual year. COVID-19 containment measures meant closures – of international borders, stopping major buyers travelling to West Africa – as well as domestic markets, leading to violent clashes between police and traders. It goes without saying that the impact of these border and market closures came at a great cost to the livelihoods of many West African cashew farmers, producers, and traders. Small businesses faced plummeting revenues or were at the brink of bankruptcy. Instead of offering support, local banks and financial institutions supporting West African cashew producers slashed lending during the pandemic.

Agriculture is a risky business at the best of times – good prices depend on good yields, which depend on good weather. While speciality crops like cashews can generate high returns, the risk of capital loss is also high, meaning many banks are hesitant to provide the capital that’s needed for small businesses in West Africa’s cashew sector to flourish. The cashew businesses that have weathered the economic storm created by COVID-19 have something in common – the long-term backing of impact investors who not only provide capital and technical assistance, but who also have a deep understanding of the challenges of the agricultural sector.

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Inégalités et migrations internationales : garantir des avantages pour tous dans l’après-pandémie

Par Jason Gagnon, Économiste du développement, Centre de développement de l’OCDE

Jaipur, Rajasthan, India, mai 2020 : Les travailleurs migrants indiens quittent la ville en raison du confinment. Photo: Mukesh Kumar Jwala / Shutterstock

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La pandémie de COVID-19 a bouleversé les migrations internationales. Selon les Nations Unies, on comptait 272 millions de migrants internationaux dans le monde en 2019, soit 3.5 % de la population mondiale, ce qui reflétait une augmentation constante au fil des ans. Cependant, depuis le début de la crise, les migrations ont considérablement diminué. En raison des restrictions, l’accueil d’étrangers dans les pays de l’OCDE a chuté de 46 %. Dans les pays du Conseil de coopération du Golfe (CCG), et dans de nombreuses autres régions du monde, les tendances vont dans le même sens. Et la baisse générale des flux migratoires devrait se poursuivre en 2021.

Les répercussions disproportionnées de la crise du COVID-19 sur les migrants sont innombrables. La pandémie a également montré à quel point de nombreux pays dépendent fortement des migrants pour faire fonctionner leur économie, assurer leur sécurité alimentaire  et combler leur déficit de compétences. Sans parler des biens culturels immatériels dont bénéficient les sociétés dans tous les domaines, que ce soit en termes d’alimentation, d’événements culturels et d’art. Mais quel sera l’impact du COVID-19 sur l’avenir des migrations internationales ?

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