On 30 April 2020 Gabriela Ramos participated in the third virtual World Economic Forum COVID Social Sector Mobilisation Platform call, which brought togeter leaders from Civil Society, the Schwab Foundation, Philanthropy, and Young Global Leaders. The COVID Social Sector Mobilization Platform consists of four priorities: Mobilizing a collaborative response between the social sector, governments and business; Generating COVID-related support for civil society organizations around the world; Influencing policy through concrete recommendations and evidence-based knowledge; Identifying opportunities for investments and funding on systems-changing interventions.
Find below her remarks and panel talking points as delivered.
First and foremost, I want to take this opportunity to commend the work of frontline essential workers, nurses and doctors and care-workers, to fight the Covid-19 pandemic and to save lives. And my deepest condolences to those who have suffered and lost on account of the virus or saving others.
Covid-19 is causing large-scale loss of life and severe human suffering. It is overburdening health systems worldwide and posing a threat to the global economy at a magnitude not seen in recent times.
We are facing a lot of uncertainties.
- OECD projects a decline in annual GDP growth of 2 ppt for each month of confinement.
- Many economies are experiencing sharp and sudden contractions in output, falling to record lows in Europe in both manufacturing and service sectors.
- Global trade is now contracting (global merchandise trade for JAN and FEB is 2.5% weaker than a year earlier).
- Global air traffic has fallen rapidly. At the major international airports of the G20 countries, the total number of commercial flight departures was 80% lower than in the latter half of February.
- Global production and retail sales fell. (5.2% and 12% lower respectively in February than in 2019Q4)
- Effects on workers have been dire across countries. ILO estimates 2.7 billion workers will be affected (81% of global workforce), with new unemployment benefit claims in some countries increasing 10 times ‘normal’ rates.
These impacts will fall asymmetrically on our societies.
- This crisis is exposing widespread inequalities between socioeconomic groups, regions, gender, and generations that we have yet to fix since the 2008 crisis.
- The most vulnerable are impacted by this economic fallout, the financially insecure, those in precarious employment conditions such as gig, informal, domestic, and migrant workers, with low levels of education.
- Even prior to the crisis, the bottom 40% of the population were financially insecure, meaning they were at high risk of falling into poverty with 3 months of income-loss. This figure climbs to over 60% in some OECD countries. As confinement stretches on this risk becomes almost a definite!
And many more social implications…
- Those with pre-existing physical and mental health conditions will struggle to receive the support they need.
- Women are increasingly facing violence due to confinement (30% increase in major economies). Even before the crisis, more than 1 in 3 women had experienced IPV.
- Youth are at risk of losing prosperous future. Existing education and skills gaps between those with low versus high socioeconomic backgrounds can further widen as we all go digital.
- We know for a fact that youth from low socioeconomic backgrounds are less likely to return to schooling following disruptions and the same goes for girls in developing countries, particularly in rural regions.
- And children – how do we ensure their well-being during the crisis? Civil society has a key role to play as they can provide essential services and goods (food, social service) speedier than governments.
In immediate response measures we need to pay special attention to these inequalities and put people at the centre, investing in the areas people need most: social protection, health care, elderly care, childcare support, income support (also for informal workers – especially in the developing country context where 90% of workers are informal), support for small business owners, extending unemployment benefits.
- The OECD provides a wealth of recommendations on our COVD-19 digital hub with policy recommendations across all government mandates.
In order for these measures to reach those who need it most we need partnership and collaboration between public, private, social, and civic sectors.
- We must incorporate the viewpoints of civil society organisations close to the groups we wish to reach.
- We must promote R&D for companies that can provide essential sanitary and chemical products.
- We must incentivize the private sector to provide education materials and digital technologies to students and teachers in disadvantaged areas.
More fundamentally, the priorities we set in our recovery strategies will define our post-COVID world. This crisis is bringing to light the weaknesses and vulnerabilities of our current economic, social, political systems. We must not only ensure that the effects of inequalities are not compounded during this crisis. But we must create a new narrative that puts people and well-being at the centre of our policies. We must also work to make our health, economic, political, and social systems more resilient and better prepared for the next unavoidable shock.
At the OECD, our policy guidance centres around this objective and we stand ready to partner with governments at all scales and various sectors to achieve the world people deserve. I am also happy to hear from partners after this meeting for any suggestions for collaboration.
TALKING POINTS for Q&A
Economic Global Outlook:
The exact scale of the economic shock arising from the implementation of containment measures is extremely difficult to quantify, but is clear that many economies are experiencing sharp and sudden contractions in output, spending and employment.
- OECD estimates show that we can expect a decline in annual GDP growth of 2 percentage points for each month that strict containment measures continue.
- Indicators of output fell to record lows in Europe in both manufacturing and service sectors.
Global trade is now contracting
- Data for merchandise trade data from the CPB show declines in global merchandise trade in both January and February, with trade 2.5% weaker than a year earlier.
- Global air traffic has fallen rapidly as the crisis has intensified. The total number of commercial flight departures recorded by Flightradar in April (until 28th) was 71% lower than in the latter half of February. At the major international airports of the G20 countries the decline is even steeper, at 80%.
- Global production and retail sales in February were 5.2% and 12% lower respectively than in 2019Q4, largely reflecting sizeable declines in China.
Effects on workers have been dire across countries
- ILO estimates 2.7B workers will be affected (81% of global workforce)
- In the US Over the five weeks to April 18 nearly 26.5 million workers inistigated new claims for unemployment benefits, an unprecedented shock. The cumulative number of new claims is larger than total US job growth between 2009Q4 and 2020Q1.
- Automatically extend social protection entitlements (e.g. for disability, child support, poor families) that cannot be renewed in person or online due to, for example, quarantine, illness, excessive number of requests, technical difficulties or lack of access to digital platforms.
- Increase capacity to effectively register and process the rising number of unemployment cases, if needed prioritising financially vulnerable groups, such as single parents, young people, people educated below tertiary level, and for couples with children, who are also among those who have to deal with school closures and new care responsibilities.
- Workers with low job security will be hit hardest and should receive unemployment coverage, even if not meeting the criteria (e.g. uninterrupted employment for six months or more in some countries).
- Introduce temporary support for non-standard workers and persons in the informal economy who are not covered or entitled to social protection.
- Provide income support of vulnerable groups, such as sick workers and their families; quarantined workers, who cannot work remotely; workers losing their jobs and the self-employed and others in non-standard forms of work who are experiencing a drop in activity.
- Extending paid sick leave coverage to non-standard workers, including the self-employed.
- Support SMEs in covering the financial compensation during sick leave thus encouraging workers to remain isolated as long as needed.
- Strengthen in particular income support to financially vulnerable groups (single parents, young people, people educated below tertiary level, and for couples with children, who are also among those who have to deal with school closures and new care responsibilities).
- Introduce more flexibility in short-term work schemes, allowing to recruit and train job seekers to step in for ill and quarantined workers.
- Consider the specific needs of women, who are likely to take on a greater share of the caring responsibilities for children and the elderly, as a consequence of more often being “secondearners”, e.g. address possible consequences on their social security contributions and pensions.
- Organise delivery of essential supplies to socially isolated groups (e.g. the elderly) and persons in quarantine and treatment (for cases not requiring hospitalisation).
- Co-ordinate regular check-ins with people at risk of isolation and loneliness for the benefit of psychological and physical well-being.
- Alleviate pressures on the health system by implementing measures to contain and mitigate the spread of the disease, including public health services to prevent infection and contagion, and stepping up public information campaigns for practicing personal hygiene and social distancing.
- Provide additional funding for health care to help rapid deployment of resources and higher capacity.
- Ensure adequate spaces to diagnose people safely and efficiently.
- Mobilise inactive health professionals.
- Recognise and reward overtime work in health care and emergency response sectors.
- Boost the provision of required supplies and equipment to diagnose and treat patients safely; work with partners along the supply chain/transport routes to ensure that provision of essential supplies is not restricted by containment measures (e.g. border closures) and trade restrictions.
- The “hard to reach” deserve special attention – make health care and testing services both affordable and accessible to vulnerable groups, and public health information clear and easy to comprehend.
- Implement measures to ensure that individuals and families can remain in home dwellings, throughout the crisis and into the recovery period. Options include temporary deferment of mortgage repayments and utility bills, and suspension of foreclosures and evictions.
- Increase bed capacity in homeless accommodation and reduce overcrowding. Options include acquisition of hotel rooms and conversion of publically owned buildings.
- Support affected students through effective remote learning opportunities. Public institutions and the private sector can be called upon to donate the equipment needed for remote learning.
- Provide remote training facilities for teachers, as well as students and their parents, to navigate any technical difficulties (e.g. provide directions for prioritisation in case of overload of servers and internet capacity) in the transition to remote learning.
- Depending on the success of remote learning, consider extending classes beyond the regular school year/after the lifting of the school and university closures to minimise impacts on students’ future education performance and job prospects, especially for those graduating from middle school, high school or university.
- Pay particular attention to supporting vulnerable children (and their families), who are less likely to have a suitable learning environment, parental support and technical facilities for remote learning, as these are also children more vulnerable to dropping out of school and experiencing a more severe drop in academic achievement after prolonged school breaks.
- Consider inclusion of the most vulnerable children in emergency childcare provisions for children of essential workers in countries where such arrangements exist.
- Provide support to children who rely on schools for meals and contacts with supportive adults e.g. food vouchers, food parcels, and regular check-ins by teachers.
Supporting small businesses
- Implement short-term support measures for SMEs and severely affected sectors (e.g. tourism) including temporarily reducing or eliminating property/business taxes.
- Provide liquidity support through creation of temporary loan-repayment amnesties or provision of grants to bridge liquidity gaps.
- Help firms adjust working time to remain operational and preserve jobs.
- Encourage teleworking and other types of remote work, where possible.
- Encourage training and upskilling.
- Work with technology companies to provide SMEs and the self-employed with free and rapid access to communication and sharing tools.
Role of civil and social sectors
COVID-19 has a strong impact at the community-level making local response very important.
Therefore countries should engage effectively with Community organisations and NGOs to access community knowledge, make better decisions, build trust and lessen discrimination.
Countries should support community responses and actions with funding and infrastructure so that local organisations and groups can deliver and inform local and national government decisions.
For example, support to vulnerable children, such as food banks, learning materials, and psychological support, would likely be better delivered by civil society than the speed at which a government can do it.
Through the OECD’s close co-ordination with a wide range of civil society actors and continuous monitoring of external developments in the third sector, our understanding of their desired roles in the COVID-19 crisis is:
- Working directly with governments as part of their crisis response to best co-ordinate their staff and volunteers, use their social media and other communications networks to provide quality and up-to-date information and offer any specific local/regional knowledge they may have:
- Ensuring the personal/physical safety of workers, especially those on the “frontline” e.g. healthcare, retail etc., through provision of sufficient and adequate PPE
- Ensuring the personal/physical safety of citizens, through communicating sound health advice and combatting misinformation, protecting already marginalised and at-risk groups, and recognising that issues such as domestic violence against women are exacerbated during pandemics
- Making sure there are adequate financial provisions for workers, families and businesses whose jobs, employment or incomes are affected
- Conveying citizens’ concerns to represent their immediate needs and champion their vision of the recovery phase, especially the most vulnerable, those at risk and groups that may not have their own voice
- Continuing their watchdog role
- Monitoring CV19-specific resources, and the contracts/agreements that may go with them, are scrutinised for corruption/bribery/competition concerns and that information is transparent and easily accessible
- Protecting privacy making sure data safe and used only as necessary, specifically regarding existing or proposed digital track and tracing initiatives
- Being actively included and consulted in recovery planning across all areas of society
- Re-evaluating how healthcare is paid for and accessed, as well as social security systems and safety nets more broadly
- Re-assessing how governments and businesses invest and the effects on the ongoing climate crisis and biodiversity, and how a Green New Deal could be realised
- Re-imagining trade and global value chains to be more resilient but also fair and just
Over the short run, the possible temporary relocation of urban dwellers to rural areas will likely produce positive consumption effects, despite the overall decline in demand with confinement measures.
There will be a temporary increase in consumption of durables and immediate consumption goods due to crisis purchasing behaviours, and a drop in demand for luxury goods both in urban and rural areas.
Rural areas specialised in agriculture production may benefit as well as local firms and the rural service sector.
Despite these positive effects, rural regions are particularly vulnerable to the emerging shock effects due to the following factors:
- Large share of population with high risk factors notably elderly, poor, health issues, etc.
- A less diversified economy.
- A high share of workers in essential jobs (agriculture, food processing etc.) coupled with a more limited likelihood to work from home — making social distancing harder to implement.
- Lower incomes and lower savings forcing people to continue to work when ill.
- Health care system not suitable for dealing with covid-19 lacking, ICUs and doctors with specialised skills.
- Digital divide in the form of weak internet and fewer people with adequate computer and phone technologies.
- Larger distance to access hospitals, testing etc.
- Confinement measures and the need to take care of children limit the mobility of local and foreign workers.
- Although primary sector, especially agriculture, has typically been classed as essential activity, and therefore maintained during the crisis, high labour intensive sectors that are critical for rural economies are experiencing labour shortages including from seasonal and temporary workers.
Governments can prepare to leverage opportunities presented by the crisis to accelerate adaptation and integration of rural communities
- Speed up investments in digital infrastructure and supporting eco-system to increase the uptake of digital tools in rural areas.
- Encourage the uptake of remote services by better adapting national rules to the specificities of rural communities, training of teachers and health care professionals to adopt remote forms of service delivery.
- Provide financial and technical assistance to support community-based and social innovation projects that aim at protecting the most vulnerable citizens in rural areas, including the elderly and migrants.
- Include sustainability criteria in Covid-19 recovery actions so that they also contribute to long-term resilience by addressing climate change and ecological transition.
- Support the resilience of rural communities by enhancing social solidarity networks that meet the basic living standards of the vulnerable citizens in the rural areas.
- Impacts have a strong regional dimension as well.
- Many middle- and lower-income countries have tried to adopt a similar range of measures to those adopted by OECD members – nation-wide or partial lockdowns, fiscal stimulus, travel restrictions, quarantine arrangements.
- Some even responded earlier and more strongly than the advanced economies.
- The menu of policy options is thus broadly similar, but in many/most cases, limited fiscal space, weaker state administrative capacities and less developed infrastructure (especially digital infrastructure) and healthcare systems constitute important constraints on their ability to respond.
- In addition, there are specific challenges to administering lockdowns and public health measures, as well as measures to provide social protection and maintain incomes, in places where a large part of the population operate outside the formal sector.
- The crisis also shows us how many truly essential tasks are performed in many countries by informal workers (waste disposal, cleaning, deliveries).
- The challenges for urban informality are particularly acute.
- These tensions are of first-order interest to all of us, because a failure to contain the virus in large swathes of the developing world would constitute a threat to (or at least impose high costs on) all.
- Costs are likely to increase as the failures of healthcare systems make lock-down measures all the more important to contain the spread of the epidemics, notwithstanding the difficulty to enforce them.
- This confronts governments with difficult dilemmas, as the tension between the risk of high death tolls and a devastating impact on the economy is stronger than in advanced economies, potentially leading to more social and political unrest.
- Furthermore, in certain contexts, because of their limited capacity to lead and obtain an adequate response from the population, some governments can be tempted to take more authoritarian measures.
- In many cases, elections and democratic processes had to be postponed, creating uncertainty; in some cases, emergency support cash transfers are used with political intentions.
- In some countries, the reactions of national governments and sub-national governments have not been fully aligned and there have been riots in excessively crowded prisons as inmates become infected.
- All these are additional factors to take into consideration in countries where institutions are weaker and trust in governments is low.
- At the same time, good communication strategies and good crisis management are enhancing government support in some countries.
- On the economic front, we see the evergreen dilemma of state support vs private sector development in the economic response. While state controlled systems have the ability to direct necessary resources into the crisis management, and thereby address pressing social issues related to the loss of jobs, these measures can sometimes favour SOEs and be channeled via SOEs, whereas the most vulnerable privately owned SMEs, startups etc. remain without support.
- Help can be usually provided to SOEs through commercial banks or lower level government entities and the process also be burdened by heavy bureaucracy.
- In developing and emerging economies, the likely impact on women is even higher given their large presence in the informal sector and in the health care system.
- Likewise, the very significant amount of unpaid work in relation with care of the elderly and children is particularly important. This shows more dramatically the imbalance in the access to decision-making positions.