Social Protection

The sectoral and gendered impacts of COVID-19 in Africa

Development Matters Africa, Building resilience, Covid-19, Gender, Women and Girls, Social Protection , ,

By Anzetse Were, Senior Economist FSD Kenya

Africa, like much of the world, is still in the throes of the COVID pandemic and related economic fallout. The pandemic has cost the continent about USD 69 billion per month and economic growth is projected to contract by 2.6% in 2020. This downturn is set to cost Africa at least $115 billion in output losses in 2020 with GDP per capita growth expected to contract by nearly 6.0 %. Additionally, the pandemic may push 40 million people into extreme poverty in 2020 across the continent, eroding at least five years of progress in fighting poverty.

Diverse sectoral impact

The sectoral impact of COVID-19 has been and will likely continue to be varied. Some sectors such as tourism, aviation and crude oil exports have been disproportionately hit in Africa, while COVID-19 is spurring certain types of digital technologies (such as mobile payments in Kenya and Rwanda), and food production in some countries has been resilient. This points to four main COVID impact-recovery sectoral performance paths (the chart is illustrative):

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A new social contract for informal workers: Bridging social protection and economic inclusion

Development Matters New social contract, Social Protection , , ,

By Martha Chen, Senior Advisor, WIEGO and Lecturer in Public Policy, Harvard Kennedy School, Laura Alfers, Director, Social Protection, WIEGO and Research Associate, Rhodes University, and Sophie Plagerson, Visiting Associate Professor, Centre for Social Development in Africa, University of Johannesburg

Photo by Martha Chen

Calls to renew the social contract have proliferated in recent years as the “standard” employer-employee relationship has ceased to be the norm, while traditional forms of informal employment persist and informalisation of once formal jobs is on the rise.1 However, there is a mismatch globally between traditional social contract models based on assumptions of full (male and formal) employment and the world of work today in which informal workers, both self- and wage employed, constitute over 60 per cent of the global workforce. Can the call for a new social contract really help to achieve greater recognition and a more level playing field for informal workers?

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Like it or not: coercive power is essential to development

Development Matters Policy, Social Protection , ,

By Erwin van Veen, Lead Levant Research Programme, Senior Research Fellow, Conflict Research Unit at Clingendael

Understanding the political economy of coercion is essential to achieving developmental gains in countries at the lower end of stability and institutional performance. Surprisingly, this matter rarely features on the development agenda, which means the implementation of the Sustainable Development Goals continues to suffer in such countries.

If national development is defined as the long-term, collective pursuit of the highest level of wellbeing for the greatest number of citizens, it is a deeply political and highly contested process by default. That is in part because all these components are subject to varying definitions. What is the collective? What is wellbeing? Who is a citizen and what are their rights? Different countries offer starkly different answers to such questions. But beyond definitions, there are also more commonplace reasons for development being such a political undertaking.

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EU climate tax could benefit oil exporters

Development Matters Covid-19, Green transition, Natural Resources, Social Protection , , , ,

By Håvard Halland, Senior Economist at the 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.

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In energy-intensive sectors, a carbon border tax could shift the geography of investment.

For a green coronavirus recovery, an effective global price on carbon remains as important as ever before. However, until governments can agree on the severity of the risk posed by climate change, a global tax on greenhouse gas emissions seems a remote prospect. Nonetheless, the “carbon border adjustment mechanism” that the EU is considering could have similar effects on capital allocation – albeit on a smaller scale.

The EU’s ambitious new climate goals will require emissions reductions not only in the energy sector, but also in energy-intensive sectors such as heavy industries, metals, petrochemicals, cement, and fertilizer. To ensure a level playing field between EU companies and foreign firms not subject to EU emissions targets, the EU may implement a border tax on carbon-intensive imports. The combination of high carbon taxes within the EU and a carbon border tax would present energy-intensive industries with a new set of locational choices.

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Adapting to the new normal: the economic impact of COVID-19 in Central America

Development Matters Covid-19, Latin America and the Caribbean, Social Protection , , , ,

By Miguel Angel Medina Fonseca, Economist at Chief Economist Office, Central American Bank for Economic Integration

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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Photo: Eve Orea / Shutterstock

The COVID-19 pandemic is causing one of the largest economic recessions in the world’s history. In Central America, the Central American Bank for Economic Integration foresees a worst case scenario where the region’s GDP will contract by 4.9%, and public debt will increase by at least 7.6 percentage points of GDP.

The COVID-19 pandemic has prompted most governments around the globe to take preventive containment and mitigation measures, often implemented under state of emergency or similar clauses. In Central America, most policies have focused on saving people’s lives and reducing the socio-economic impact of the pandemic. Some measures stand out:
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América Latina y el Caribe en tiempos del COVID-19: no descuidar a los más vulnerables

Development Matters Covid-19, Latin America and the Caribbean, Policy, Social Protection , , , ,

Por Federico Bonaglia, Director Adjunto, Centro de Desarrollo de la OCDE, y Sebastián Nieto Parra, Jefe de la Unidad de América Latina y el Caribe, Centro de Desarrollo de la OCDE

Este artículo es parte de una serie sobre cómo abordar COVID-19 en los países en desarrollo. Visite la página específica de la OCDE para acceder a los datos, análisis y recomendaciones de la OCDE sobre los impactos sanitarios, económicos, financieros y sociales del COVID-19 en todo el mundo.

Photo by Manuel on UnsplashRead this blog in English

Las medidas de contención necesarias contra el COVID-19 han generado una crisis económica mundial sin precedentes, combinando choques por el lado de la oferta y de la demanda. Ahora, la pandemia está afectando a América Latina y el Caribe y los países se están preparando para el efecto multiplicador que tendrá en la región. Tan solo unos meses antes, a finales de 2019, muchos países de la región tuvieron una ola de protestas masivas impulsadas por un profundo descontento social, aspiraciones frustradas, vulnerabilidad persistente y creciente pobreza. Esta crisis exacerbará estos problemas.

Más allá de la magnitud del impacto en los sistemas de salud que ya son débiles (unos 125 millones de personas aún carecen de acceso a los servicios básicos de salud), el abrumador impacto socioeconómico de la crisis podría recaer desproporcionadamente en los hogares vulnerables y pobres si no se implementan respuestas ambiciosas de política. Continue reading →

COVID-19 in Latin America: Promoting entrepreneurship and reducing social vulnerabilities

Development Matters Covid-19, Employment, Human Development, Latin America and the Caribbean, New social contract, Social Protection , , , , , , , , ,

By Jorge Arbache, Private Sector Vice-President, Development Bank of Latin America (CAF)

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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Vendor in Quito, Ecuador. Photo: teranbryan_ecu/Shutterstock

Statistics show that economic growth in Latin America is highly volatile, with periods of acceleration and collapse. This dynamic hides perverse implications. The combination of low growth persistence with high-growth volatility is associated with greater risk aversion, which in turn encourages financial speculation and firms to invest in lower risk, but also lower social return projects. Additionally, poverty and other social indicators are also very sensitive to the harmful combination of short growth spells and high volatility. Continue reading →

Fighting COVID-19 in Africa’s informal settlements

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

By Maimunah Mohd Sharif, Executive Director, United Nations Human Settlements Programme (UN‐Habitat)

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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Kibera informal settlement in Nairobi, Kenya. Photo: Boris Golovnev/Shutterstock

The COVID-19 pandemic has cost hundreds of thousands of lives in the world’s richest cities but poses an even greater threat to cities in the developing world. There are now more than 150,000 confirmed cases of coronavirus across Africa, in all 54 countries, with South Africa and Egypt the worst affected.

One of the most pressing concerns for Africa is that over half the population (excluding in North Africa) live in overcrowded informal settlements. In these areas where several people have to share one badly ventilated room, diseases such as COVID-19 spread fast and it is impossible to practice physical distancing whether in homes or outside. Continue reading →

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

Development Matters Africa, Covid-19, New social contract, 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

MENA-covid-19

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Social protection and sub-regional integration: fundamental instruments for post-COVID-19 social reconstruction

Development Matters Covid-19, Latin America and the Caribbean, New social contract, Social Protection , , ,

By Alfredo Suárez Mieses, Secretary-General, Central American Social Integration Secretariat (SISCA), and Gabriela A. Ramírez Menjívar, Head of the Multidimensional Poverty, Human Capital Development and Social Protection Area- SISCA

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.

Photography by Presidency of the Republic of El Salvador
Photo: Presidency of the Republic of El Salvador

The COVID-19 pandemic is causing an unprecedented health, economic and social crisis that threatens to leave a deeply negative mark in the SICA region (Central America and Dominican Republic), particularly on employment, poverty, and inequality levels. The depth of the impacts will depend on multiple factors, including the duration of the pandemic, the public policy responses to contain and control it, a country’s economic structure, the strength of its health and social protection systems, and its level of vulnerability to global dynamics. Social protection is a crucial tool to minimize the costs of the crisis; it is also a crucial investment to make the recovery stronger and more inclusive, thus more sustainable.

Measures taken by most countries to flatten the contagion curve, along with the current international environment, have impacted economic activity with direct effects on income generation and living conditions for a large part of the population. According to the latest report of the Central American Economic Integration Secretariat (SIECA), the region’s Gross Domestic Product will contract by 6.8%. The fall in tourism and decline of economic activity in the United States, the main trading partner and the largest source of foreign direct investment and remittances in Central America, are already having negative effects. The Inter-American Development Bank (IADB) estimates remittances could contract by 10% for each point less of growth in the United States. Continue reading →