COVID-19: Effects and Policy Responses Kunal Sen, Director, - - PowerPoint PPT Presentation

Kunal Sen, Director, UNU-WIDER COVID-19: Effects and Policy Responses

The COVID-19 Pandemic

Outline of my presentation

• What do we know so far about its effects?
• What does it imply about the 2030 Agenda?
• How should policy respond?
• How to build back better?

What Do We Know About The Social and Economic Effects of the Pandemic?

Macro “Guesstimates”

GDP (from IMF, WEO, June 2020) Employment (from ILO June 2020 Monitor)

• 12
• 10
• 8
• 6
• 4
• 2

2 4 6 8 10

Projections, per cent change

2020 2021

Very sketchy evidence on actual magnitudes of the economic impact

• Most labour surveys have been halted
• National income estimates not yet out.
• Primary surveys almost completely relying on phone surveys, which

have their limitations.

• Online surveys: UNESCAP-SSWA online survey
• Absence of baseline data
• Lack of sampling frames in many cases, so not representative.

One innovative approach – Google Mobility data (per cent change from baseline)

• 100
• 80
• 60
• 40
• 20

20

15/02/2020 15/03/2020 15/04/2020 15/05/2020 15/06/2020 15/07/2020

India retail_and_recreation grocery_and_pharmacy workplaces

• 80
• 70
• 60
• 50
• 40
• 30
• 20
• 10

10 20 30

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 111 116 121 126 131 136 141 146 151 156 161 166

Indonesia retail_and_recreation grocery_and_pharmacy workplaces

UNU-WIDER launched a global online survey (in partnership with other organisations) in March in several languages

Crisis aspect that has had largest personal impact

9

Trust in national government: Asia vs other world regions

10

Willingness to give up income to stop pandemic by age (mean)

11

Support of countermeasures put in place by age (mean)

12

COVID-19 and the SDGs

Which SDGs will be affected?

Increases in Poverty (HCR), percentage points, based on different scenarios of falls in per capita income/ consumption for $1.90 poverty line (source: Sumner et al., WIDER WP 2020/77)

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

South Asia

5 per cent 10 per cent 20 per cent

0.00 2.00 4.00 6.00 8.00 10.00

Armenia Azerbaijan Georgia Kazakhstan Kyrgyz… Russian… Tajikistan Turkmenistan Turkey Uzbekistan

North, Central and South West Asia

5 per cent 10 per cent 20 per cent

Increases in Poverty (HCR), percentage points, based on different scenarios of falls in per capita income/ consumption for $1.90 poverty line

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00

China Indonesia Lao PDR Myanmar Mongolia Malaysia Philippines Thailand Timor-Leste Viet nam

East Asia

5 percent 10 percent 20 percent

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00

The Pacific

5 percent 10 percent 20 percent

Policy Responses: The H-ESS framework

Stringency of COVID-19 government responses, ranking by world region

20 40 60 80

North America East Asia and Pacific Sub-Saharan Africa Latin America and Caribbean Europe and Central Asia Middle East and North Africa South Asia Average stringency index 31-Mar-20 22-Jun-20

COVID-19 government economic support measures, ranking by world region

20 40 60 80

Sub-Saharan Africa Middle East and North Africa Latin America and Caribbean East Asia and Pacific South Asia Europe and Central Asia North America Average economic support index 31-Mar-20 22-Jun-20

The Health-Economic and Social Support (H-ESS) Framework

(Addison, Sen and Tarp, WIDER WP 2020/74) Public Health Measures (H)

Measures Observations (modalities, requirements, constraints) Personal protective measures (hand- washing, respiratory etiquette). Communication of advice from public health authorities via all available media. Physical distancing and travel-related measures Physical distancing measures apply to individuals or to specific communities with outbreaks, specific segments of the population, or to the population as whole. Identify, isolate, test, treat cases, to break the chains of transmission Laboratory capacity created to deliver fast and reliable test results at scale. Existing professional contact-tracers and trained volunteers. Additional large-scale public health and social measures (PHSM) Movement restrictions, closures of schools, business etc., geographical area quarantine, and international travel restrictions. Maintain preventative health care measures Especially vaccinations for polio, measles etc. Deployment of effective therapeutics and vaccination against SARS-CoV-2 A safe and reliable therapeutics and vaccines if they become available and can be produced at scale Transition phase out of pandemic A transition plan and one that conforms to national and local realities, including the prospects for the economy and thereby the public finances.

Economic and Social Support (ESS)

Measures Observations (modalities, requirements, constraints) Enterprise assistance Central banks encourage formal financial system to expand lending to (formal-sector) enterprises. Micro-credit programmes for small and medium enterprises. Taxation (for formal sector enterprises only): deferral of payments (VAT, corporation taxes, property taxes etc.) and extension of deadlines for filing. Informal enterprises: typically assisted via household income support Employer wage subsidies and other labour market measures Wage subsidies to (formal) enterprises to reduce the need to furlough or fire workers (and therefore the need for severance payments. Payments to registered self-employed. Informal workers: mainly supported via social assistance to eligible individuals and households (see below). Provision of training programmes to informal workers. Social insurance General public pension increase for all eligible senior citizens or top-ups confined to low-income pensioners. Social assistance: cash transfers Unconditional and conditional cash transfers; increase in size of payments; coverage extended, admin reforms to increase efficiency and maximize benefit to recipients. Social assistance: workfare and other assistance Unconditional or linked to existing workfare programmes, payment in food or cash. Transition Phase out of Pandemic Bundle ad hoc emergency programmes into more consolidated (and lower admin cost) social protection.

The Pandemic Economy

Output

Time Health Economic and Social Support

Building Back Better

Building Back Better

• For the immediate future: “do whatever it takes” economic policy:

monetary and fiscal stimuli, cash transfers, wage subsidies, loans/grants to SMEs, etc.

• For the longer term: three principles: build more resilience (green

economy, stronger public health systems), promote regional and international coordination (regional transport corridors, debt relief) and recognise intersectionality in SDGs.

• The pandemic has taught us that the SDGs should not seen in silos,

so should not health, economic and social policy (the H-ESS framework).