Covid-19

Repurposing Africa’s manufacturing: A means to address medical equipment shortages and spur industrialisation

Development Matters Africa, Covid-19 , , , , ,

 Rajkumar Mayank Singh, Tony Blair Institute (TBI) Strategic Advisor to the Government of Rwanda, Antoine Huss, Regional Lead, Francophone West Africa, TBI, Jonathan Said, Head of Inclusive Economic Growth, Africa, TBI, and Kekeli Ahiable, West Africa Analyst, TBI

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.

PPE production in a repurposed factory in Ghana
Personal Protective Equipment (PPE) production in a repurposed factory in Ghana. Photo courtesy of the authors.

The World Health Organization (WHO) predicts that around 22% of Africa’s population will be infected by COVID-19 within a year, possibly resulting in 150,000 deaths. In a recent forecast by Kearney, even in a suppressed pandemic progression scenario, demand for medical gowns, gloves, masks, swabs, and hand sanitizers will surge by ~1,600 percent from the baseline. In such circumstances, weak health systems and a lack of essential medical supplies leave countries in Africa particularly vulnerable.

Governments around the world have been panic buying essential medical supplies, while the World Trade Organization recently reported eighty countries that have introduced export prohibitions restricting the global supply of medical equipment. In 2018, as depicted in figure 1, industrialised countries like the U.S.A. and Germany had the largest market share in global export of ventilators and testing kits, while China led exports of face masks globally. With African countries importing most of their medical needs, panic buying and supply chain disruptions will significantly undermine the ability of African countries – and hence the world – to defeat COVID-19. Continue reading →

What can Latin America learn from historic debt crises to face the COVID-19 crisis today?

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

By Juan Flores Zendejas, Associate Professor at the Paul Bairoch Institute of Economic History, University of Geneva

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.

Bogota-Colombia-bike-1200X800
Photo: Shutterstock

Today, as in the past, public debate can resort to history in the quest for policy lessons. The COVID-19 crisis is prompting governmental action to meet the needs of large swathes of society and achieve rapid economic recovery. This is adding further pressure on public finances. However, while major stimulus packages are to be implemented in several rich countries, most developing and emerging economies do not have the fiscal capacity to provide similar amounts of financial support. Continue reading →

A new approach to the intractable problem of climate change

Development Matters Climate change, Covid-19 , , ,

By François Candelon, Managing Director and Senior Partner at BCG Paris, and the Global Director of the BCG Henderson Institute, Rodolphe Charme di Carlo, Principal at BCG Paris, and Ambassador at the BCG Henderson Institute, and Yves Morieux, Managing Director and Senior Partner at BCG Middle East, BCG Fellow, and head of BCG Institute for Organization

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.

climate-change-covid-19“COVID-19 is climate on warp speed” said Gernot Wagner, climate economist at NYU. Both trends show exponential growth – in infected people and CO2 emissions respectively – while capacity to fight them remains limited. Still, while governments enforce emergency measures around the globe, little action on climate has happened to date. Therefore, the actual question to solve is not “what can we do?” but rather “why not now?”

Bringing an alternative and rigorously structured approach can help to find practical, impactful solutions. The concept of Smart Simplicity, applying principles of sociology to solving complex organisational problems in business and beyond, can play this role by analysing inaction from two angles. First, the systemic lens – stemming from Thomas Schelling’s work – assesses how individual behaviours combine to produce collective outcomes that cannot directly be traced back to individual motives. Second, the strategic lens, legacy of Herbert Simon’s “bounded rationality”, analyses individual behaviours within the context of problems they try to solve, with resources to mobilise and constraints to cope with. Continue reading →

COVID-19 crisis: Why we must prioritise mental health of the world’s displaced

Development Matters Covid-19, Migration, policy , , , ,

By Shaifali Sandhya, PhD, Clinical Psychologist, Care Family Consultation

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.

Deprsession-shutterstock_332939864The modern world is in an unprecedented situation. In the last decade, the global population of the forcibly displaced has swelled to 70.8 million; with the advent of COVID-19, its numbers are expected to soar as a staggering number of refugee and asylum-seeker families find themselves further displaced by fear of disease, food insecurity and by the pressures of collapsing national economies. In many countries displaced communities’ access to labour markets is limited to the informal market, and equally vulnerable will be nations’ shadow workers – garbage workers, prostitutes, domestic help, garment makers, and gig workers. Faced with an economic crisis of cataclysmic proportions, economists and political leaders will be tempted to focus solely on the physical and economic facets of the current crisis.  But if we want to make it through this crisis, that won’t be enough.  In addition to financial and physical wellbeing we will need to recognize and address mental health around the world and at every level of society, especially of its displaced communities. We are at best, unprepared for the worst; for both OECD and developing countries, we need to provide tailored mental health treatment to those who need it in the communities they live in. Continue reading →

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

Development Matters Africa, 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.

Africa-industrialisation-COVID-19
Photo courtesy of the Tony Blair Institute

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 →

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

Development Matters Covid-19, Latin America/Caribbean, 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 →

Exceptional measures for exceptional times

Development Matters Covid-19, policy , ,

By Patrick Bolton, Columbia University and Imperial College, Lee Buchheit, University of Edinburgh, Pierre-Olivier Gourinchas, University of California Berkeley, Mitu Gulati, Duke University, Chang-Tai Hsieh, University of Chicago, Ugo Panizza and Beatrice Weder di Mauro, The Graduate Institute Geneva*

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.

Development-Finance-shutterstock_524218915These are not normal times, and what the world is experiencing is not a normal recession. We propose a mechanism to implement a debt standstill for low- and middle-income countries, which would facilitate the involvement of private creditors in the restructuring, reduce potential risks of free-riding and free resources to cover some of the immediate costs of the COVID-19 crisis.

The Bank of England has announced that Great Britain is entering the worst recession in 300 years, the spike in unemployment claims in the US makes unemployment claims in previous recessions look like rounding errors, and the Olympic games have been postponed. IMF forecasts predict that only 9 countries out of 190 will have positive per capita GDP growth in 2020 (and none of them will record a growth rate above 2%). To put this in context, at the peak of the global financial crisis more than 75 countries registered positive GDP per capita growth.

A downturn of this magnitude can cause tremendous long-term damage, especially so in emerging and developing economies with a high degree of informality and weaker social and economic safety nets.

While many advanced economies are able to finance massive fiscal stimulus packages with super low interest rates, emerging and developing countries are hit by a double whammy as the COVID-19 crisis has led to a sudden stop in capital flows. According to estimates by the Institute of International Finance, non-resident portfolio outflows from emerging market countries amounted to nearly $100 billion over a period of 45 days starting in late February 2020. For comparison, in the three months that followed the explosion of the Global Financial Crisis, outflows were less than $20 billion.

This situation has led more than 100 countries to seek IMF help. As explained in an April 30, 2020 Op Ed by the Ethiopian prime minister Abiy Ahmed, many countries are facing a dilemma: continue to service their external debts or redirect resources to save lives and livelihoods? Continue reading →