From crisis to opportunity in China: stepping up digitalisation amid COVID-19

By Margit Molnar, Head of China Desk, OECD Economics Department and Kensuke Tanaka, Head of Asia Desk, 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.


digitalisationDigitalisation as a way to lift growth potential

COVID-19, or the new Great Depression, is likely to have a lasting impact on economies and societies worldwide. Pandemics are shown to be followed by sustained periods with depressed investment opportunities, and/or heightened desires to save (Jorda et al., 2020), thereby reducing potential growth. To mitigate the impact of COVID-19, many governments, in addition to emergency measures to save lives and keep firms afloat, have also adopted investment stimuli. China is among those countries where the composition of stimulus is tilted towards public investment. While continuing to strike a delicate balance between keeping the pandemic under control and resuming activities, it is crucial to accelerate processes that will counter the fall in growth potential. China’s growth potential is set to decrease as the country catches up with more advanced economies and its rapid ageing also weighs on it. However, China can still reap the “reform dividend” with measures that also boost growth in the long term.

Digitalisation is a promising candidate to lift China’s long-term growth potential. Digital technologies are shown to boost productivity (Gal et al., 2019), which is the key to sustainable growth. At the current juncture, introducing digital technologies can also help jumpstart the economy as it creates new jobs and meets new demand (OECD, 2018). Indeed, in the first quarter of the year, it was the IT and software sector growing at over 13% and the financial sector at over 6% (partly thanks to surging online payments), that held up services growth. Continue reading “From crisis to opportunity in China: stepping up digitalisation amid COVID-19”

Coronavirus: Let’s not forget the world’s poorest countries

By Paul Akiwumi, Director of UNCTAD’s Division for Africa and Least Developed Countries


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.
This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs).


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Girls washing dishes in Lome, Togo. Photo: Jordan Rowland

The novel coronavirus pandemic has rapidly thrown the world into uncharted territory. As COVID-19 diagnoses rise globally, the World Health Organization has reported more than 7,000 cases in the world’s 47 least developed countries (LDCs). While these numbers seem small compared with the thousands of cases being reported daily across hotspots like Spain, the United States, and Italy, chances are that this low number of diagnosed cases will not last for long. Of the 41 LDCs reporting cases, 33 countries have now confirmed local transmission. Bangladesh has surpassed 2400 cases, while Afghanistan and Djibouti have reported more than 800 COVID-19 infections. With limited testing available in the LDCs due to already fragile health systems and limited access, especially in rural areas, these numbers are likely to be even higher and will continue to rise. Continue reading “Coronavirus: Let’s not forget the world’s poorest countries”

Lessons from coronavirus for the future of ‘aid’

By Jonathan Glennie, Senior Fellow,  Joep Lange Institute


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.


 

Beijing airport tarmac by Cory Doctorow
Beijing airport tarmac. Photo by Cory Doctorow

In December 2019 cases of a little-known disease called coronavirus were reported in Wuhan, a city in China with a population of about 11 million. As of 20 January 2020 there were 282 confirmed cases of the virus, 278 of which originated in China. Less than three months later, over 3,400 people in Italy were dead. Countries all over the world are gearing up for long periods of lockdown as a global pandemic takes hold. If ever proof were needed that health concerns in one country require a coordinated and well-funded global response, this is it.

What does this tell us about the future of global cooperation? The next chapter in the story of the China−Italy coronavirus relationship is equally relevant. On 13 March China sent a planeload of experts and medical supplies to Italy, including masks and respirators. Italy is one of the world’s richest countries (average income, US$34,480); despite rapid advance over the past decades, China is still much poorer (average income, US$9,770). Continue reading “Lessons from coronavirus for the future of ‘aid’”

Value chains in Africa: what role for regional trade?


By Eyerusalem Siba, Economist and international expert in private sector development, spatial industrial policies and sustainable urbanisation


The Covid-19 pandemic and associated containment measures hit businesses hard, exposing them to record levels of uncertainty, disrupting value chains, and reversing countries’ hard-earned progress in economic and social development. The knock-on effects of these disruptions on GDP, foreign direct investment (FDI), trade and industrial production have been highest among globally integrated economies that have smaller domestic markets, rely heavily on vulnerable sectors and have limited capacity to adjust.

Continue reading “Value chains in Africa: what role for regional trade?”

Driving Africa’s industrialisation on the back of COVID-19

By Toyin Abiodun, Industry and Trade Advisor, Rwanda, Maudo Jallow, Industry and Trade Analyst, Ghana and Jonathan Said, Head of Inclusive Economic Growth, Africa, Tony Blair Institute


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 courtesy of the Tony Blair Institute

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Africa imports a net of $232 billion worth of manufactured goods every year, while it exports a net of $174 billion worth of raw commodities. Although Africa’s economy grew on average by 5.5% per year over the past fifteen years,  manufacturing has remained a fixed share – still accounting for only 10 per cent of GDP.

The impact COVID-19 is having on global supply chains and on global trade, and the immense economic pressure this is placing on Africa – not least in the availability of medical equipment, but also food and other goods – signals the importance of industrialising the continent. While COVID-19 is creating a major economic and health crisis, it also presents an opportunity to grab this agenda by the horns and accelerate Africa’s industrialisation.

Evidence from across the continent suggests this is possible. Many products that are imported to the continent – ranging from machinery to textiles to pharmaceuticals to processed food and medical equipment – are already produced competitively in Africa. For example, Kenya and Uganda have a thriving pharmaceutical industry, Ethiopia and Senegal have expanded their textiles industry in recent years, while Morocco and South Africa are major car producers. Continue reading “Driving Africa’s industrialisation on the back of COVID-19”

Lessons from LDCs’ responses to COVID-19: From crisis to opportunities?

By Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework


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. This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs)


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June 2020 : Staff members outside the Republican Hospital for Covid-19 Patients in Taiz, Yemen. Photo: Akramalrasny / Shutterstock.

Many least developed countries (LDCs) have not yet seen large numbers of COVID-19 cases – though there are notable exceptions such as Afghanistan, Bangladesh, Nepal and Sudan.

Yet, all LDCs are confronting severe economic disruptions – and a major fiscal squeeze – from the global demand shock, supply chain disruptions and, significantly reduced income from tourism and remittances. Domestic lockdowns to prevent the spread of the virus present unique challenges in countries with high poverty rates in which large sections of the workforce are informally employed.

At the same time, crises can come with opportunities for positive change, and the present crisis might offer this for LDCs, to undertake much-needed reforms that would place them on firmer footing as economic recovery takes hold. A few LDCs have done just that, examples of which are below. Continue reading “Lessons from LDCs’ responses to COVID-19: From crisis to opportunities?”

Why quality assurance infrastructure matters to fight COVID-19 in developing countries?

By Karl-Christian Göthner, Consultant, Physikalisch-Technische Bundesanstalt PTB, Germany


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.


Quality-Assurance-Infrastructure-COVID-19The COVID-19 pandemic demonstrates that health systems in many countries – developed and developing – were not prepared for such a crisis. Since 2005, several organisations have warned about the consequences of pandemics, issuing recommendations to prepare for critical health situations (WHO 2005, World Economic Forum 2006). However, in many countries few of these recommendations were followed. In September 2019, before the outbreak in China, a study by the Johns Hopkins Centre for Health Security stated that in many countries a lot remained to be done to improve preparedness for pandemics. When the COVID-19 pandemic appeared, most countries had to improvise, with the threat that it would overwhelm their health systems, depending on the timing and extent of their measures and the state of their national health systems. National trade restrictions, interrupting supply chains and impeding medical and protective equipment exports, have also exacerbated the situation. Continue reading “Why quality assurance infrastructure matters to fight COVID-19 in developing countries?”

Covid-19 and health system

COVID-19: Make health systems a global public good

By Milindo Chakrabarti, Professor, O.P. Jindal Global University and Visiting Fellow, Research and Information System for Developing Countries (RIS)


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*.



Pandemics are always unpredictable and, unlike natural disasters that are mostly localised, they affect countries across the globe. Within a span of less than five months, millions have been affected by COVID-19 and thousands have perished. It has taken its toll across countries irrespective of their levels of income. To more effectively prevent and fight pandemics, we must shift from a national approach to health services to investing in health as a truly global public good. This will require action on pandemic insurance, on the development of pandemic-related infrastructure, and on intellectual property rights.



COVID-19: a crisis beyond income levels

The World Bank categorizes countries in terms of their per capita income. There are 80 High Income Countries, 60 Upper Middle Income Countries, 47 Lower Middle Income Countries and 31 Low Income Countries. These four categories are often used as a proxy for a country’s overall level of development. Has COVID-19 infection and mortality rates correlated with the level of income?

Continue reading “COVID-19: Make health systems a global public good”

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.

Continue reading “For greater vaccine equity, first fix these misconceptions”

The G20 and the failure of policy coordination during COVID-19

By Paola Subacchi, Professor of International Economics at Queen Mary University of London’s Global Policy Institute, is the author, most recently of The Cost of Free Money (Yale University Press, 2020)


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.


covid-19-coordination-g20When a crisis strikes, it is a time to be bold and do whatever it takes to avoid the worst. The response to the COVID-19 pandemic so far has been surprisingly bold at the national level, but at the international level, it has been disappointing to say the least. The G20 – the “premier forum for international economic co-operation” – has played no significant role in this crisis, or at least not one comparable to the role it played during the global financial crisis. Unlike in 2008, when it led the multilateral policy response, the G20 has attempted neither to coordinate the fiscal response nor to ensure that robust and broad multilateral financial safety nets are in place. It is arguable whether the nature of the current crisis requires the same deployment of financial resources as when the banking and financial systems in many countries seized up. However, the IMF and the World Bank have beefed up their resources to an unprecedented $1 trillion of loans and non-conditional credit lines to help developing countries. The G20, in turn, has agreed on temporary debt relief for low-income countries, but limited the suspension to one year. So far just $5.3 billion in bilateral debt repayments have been suspended, against an expected $11.5 billion – clearly this initiative has fallen short in ambition and scope. Continue reading “The G20 and the failure of policy coordination during COVID-19”