global, multilateral and EU-related measures to tackle COVID-19 and its consequences
OECD’S RESPONSE TO THE COVID-19 PANDEMIC
LAST UPDATED 7 July
Urgent action needed to stop jobs crisis becoming a social crisis
The Covid-19 pandemic is turning into a jobs crisis far worse than the 2008 crisis. Women, young people and workers on low incomes are being hit hardest, according to a new OECD report and unemployment statistics released today.
People on low incomes are paying the highest price. During the lockdown, top-earning workers were on average 50% more likely to work from home than low earners. At the same time, low-income workers were twice as likely to have to stop working completely, compared to their higher-income peers.
Women have been hit harder than men, with many working in the most affected sectors and disproportionately holding precarious jobs. The self-employed and people on temporary or part-time contracts have been particularly exposed to job and income losses. Young people leaving school or university will struggle to find work and face the risk of long-term damage to their earnings potential.
In the short term, continued support for some sectors still affected by containment measures remains vital to protect jobs and well-being. But it is important to target support to those most in need, while fostering the incentives to go back to work safely for those who can and supporting firms hiring new workers.
In the medium term, countries should address the structural gaps in social protection provisions that the crisis laid bare. This will involve strengthening adequate income support for all workers, including the self-employed, part-time and other non-standard workers. Firms must also repay the trust governments have invested in them during the emergency phase of the COVID-19 crisis by keeping their workers to the extent possible and investing in their skills. To ensure no one is left behind in the recovery, extending support for vocational education and training is crucial, as well as leveraging social dialogue and collective bargaining to enhance the resilience of the labour market.
Big Ideas for Small and Medium Enterprises: Helping SMEs achieve digital transformation
Across OECD countries in 2019, SMEs account for 99% of all businesses and between 50% and 60% of value added (the amount by which the value of a good or service is increased at each stage of its production, exclusive of initial costs). Almost a third of the population is employed in micro-businesses with less than ten employees and two thirds in an SME (OECD, 2019). SMEs are incubators for innovation and can develop into larger enterprises that drive GDP and productivity growth.
Most governments have recognised these risks and acted. In New Zealand, a range of support measures have been put in place to ease the immediate pressure on businesses including SMEs. These include wage and other subsidies, small business finance guarantees and cash flow loans, tax changes and payment timing relief, insolvency relief and consultancy/advisory services.
Looking beyond COVID-19, we are in the midst of the global transition towards a digital economy and society. This has the potential to spur innovation, enhance productivity and improve well-being. The pandemic has only increased the necessity and pace for change, as traditional commerce in many countries is being disrupted and with consumers now needing to engage with companies via digital platforms.
Governments supporting SMEs through the initial COVID-19 survival phase have an opportunity to help them not only become more resilient to significant shocks, but also build an environment for and capability in, viable businesses that enables them to prosper and grow. Adoption of digital technologies by the SME sector will generate an historic shift of aggregate productivity and well-being in countries, regions and communities.
Avoiding the collapse of development finance
In 2019, the OECD warned that the global development finance system in support of the UN Sustainable Development Goals was at risk of default, with serious consequences. The COVID-19 shocks to this flawed development finance architecture is causing it to crumble.
External flows to low- and middle-income countries are projected to drop by USD 700 billion in 2020 compared to 2019. This would be a shock almost two-thirds larger than that of the Global Financial Crisis of 2008-09, where inflows declined by USD 425 billion. OECD projections indicate that even in the most optimistic scenario, global FDI will drop by at least 30%, with flows to developing countries likely falling more strongly. Remittances, a stable and growing source of foreign income for developing countries until earlier this year, could fall by USD 100 billion. Domestic pressures will erode tax revenues, which were already insufficient.
The COVID-19 recovery forces a choice between reinforcing trajectories that work against sustainability, or enabling resilience for developing countries. Support for brown industries, such as coal and gas, will push governments to build back to pre-COVID conditions. Donors can play a significant role to resist the bias for old solutions by fleshing out the economic opportunities of a sustainable recovery aligned with the 2030 Agenda and the Paris Agreement: environmental, social and governance (ESG) shocks lower the long-term value of assets, and finance that accounts for ESG risks have outperformed benchmarks in the current crisis; estimates from the International Labor Organization indicate the transition to low-emissions, climate-resilient economies would net 18 million jobs and simultaneously support the 1.2 billion jobs, primarily in developing countries, that depend on direct ecosystems services; and the World Bank estimates that every dollar invested into climate-resilient infrastructure averages a four-dollar return that safeguards productivity gains and job creation infrastructure supports.
Workforce and safety in long-term care during the COVID-19 pandemic
The COVID‑19 crisis has put the spotlight on the long-term care (LTC) sector. Elderly people and their care workers have been disproportionately affected by the COVID‑19 pandemic. Many OECD countries have taken measures to contain the spread of the infection and mitigate its impact on vulnerable groups. Yet the health crisis is highlighting and exacerbating pre-existing structural problems in the long-term care (LTC) sector. Care workers experience difficult working conditions. In addition, there are skills mismatches, poor integration with the rest of health care and inadequate or poorly enforced safety standards. Looking forward, more investment in LTC workforce and infrastructure to ensure suitable levels of trained staff, with decent working conditions and prioritising care quality and safety are required.
The bulk of COVID‑19 deaths is among the elderly, especially those aged 80+ who represent 50% of those receiving LTC.
Better jobs will mean better quality of care, reductions in the high staff turnover and improved care delivery. Increasing entry wages and offering opportunities for career progression helps motivation to stay in the sector. France, for example, has announced a bonus for care workers during the COVID‑19 crisis.
Beyond wages, Norway and the Netherlands are promoting a healthier work environment through better prevention of workplace accidents and illness, which in turn can reduce absenteeism and turnover. Changing the organisation of work with more flexibility in work schedules, better organisation of daily work and planning shifts in LTC and improving leadership in nursing homes to empower employees will also be necessary.
Safety standards should be developed and enforced to ensure that minimum standards are met, such as staff ratios and qualifications, infrastructure, and better living environments. Moreover, these standards must be properly measured and enforced. Denmark, Finland, Norway, Portugal, and Sweden, for instance, have national indicators to monitor quality and safety of LTC residents.
Greater use of fit-for-purpose technology in LTC could help increase productivity. This could free professionals’ time from tasks that can be automated, allowing them to focus on activities most important for people in need of care.
[A]s the COVID‑19 crisis is demonstrating, the important links between LTC, primary care and acute care cannot be ignored. Better coordination with acute care and safety improvements during the COVID‑19 epidemic are conducive to higher care quality by ensuring early recognition of infections, implementing staff training on preventive measures and treating more severe cases who require for instance ventilation support in hospitals.
OECD Economic Outlook, June 2020
The COVID-19 pandemic is a global health crisis without precedent in living memory. It has triggered the most severe economic recession in nearly a century and is causing enormous damage to people’s health, jobs and well-being.
The Outlook focuses on two equally probable scenarios – one in which a second wave of infections, with renewed lock-downs, hits before the end of 2020, and one in which another major outbreak is avoided.
2020 Projected change in GDP in G7 countries (compared to previous period)
France: Single-hit scenario, -11.4%; Double-hit scenario, -14.1%
Italy: Single-hit scenario, -11.3%; Double-hit scenario, -14.%
United Kingdom: Single-hit scenario, -11.5%; Double-hit scenario, -14%
Euro area: Single-hit scenario, -9.1%; Double-hit scenario, -11.5%
Canada: Single-hit scenario, -8%; Double-hit scenario, -9.4%
Germany: Single-hit scenario, -6.6%; Double-hit scenario, -8.8%
United States: Single-hit scenario, -7.3%; Double-hit scenario, -8.5%
Japan: Single-hit scenario, -6%; Double-hit scenario, -7.3%
Fisheries, aquaculture and COVID-19: Issues and Policy Responses
All aspects of fish supply chains are strongly affected by the COVID-19 pandemic, with jobs, incomes and food security at risk. Government and industry responses are needed to address the immediate economic and social hardships that the crisis is provoking in the fish sector. Governments also need to maintain long-term ambitions for protecting natural resources and ecosystems, and the viability of fisheries.
Public health responses to the COVID-19 pandemic and associated measures, from confinement and social distancing to stricter border controls and reduced air traffic, are having significant and complex impacts on the demand and prices for fish products.
Production capacity and costs are affected by the need for additional health and safety measures and reduced labour mobility all along the supply chain.
Depending on the particular situation of fish stocks and ecosystems, and the magnitude of reductions in fishing, the crisis could result in positive impacts on the health of some fish stocks, as well as on biodiversity more generally. However, more data need to be collected to understand the impacts of the COVID-19 pandemic on global fishing effort; moreover, the relationship between fishing effort and stock health is sometimes hard to predict. The possible impact of the crisis on commercially important fish stocks thus remains largely unknown.
Potential implications for global food security and livelihoods call for urgent yet calibrated responses from governments and industry.
Support policies should be designed in such a way that they do not encourage unsustainable fishing now or in the future. (…) OECD work shows that policies that lower the cost of inputs, such as fuel or vessel construction or modernisation, are among the most likely to create incentives to fish more intensively and promote unsustainable fishing –while at the same time leading to less inclusive outcomes, by favouring large fishers over small producers (Martini and Innes, 2018).
Fisheries management policies must remain evidence-based in the face of growing pressures to make up for losses, and practical challenges in monitoring and enforcement.
Transparency of policy responses is critical to build the trust that governments need at home and abroad to boost confidence in trade and global markets, to manage business expectations, and to maintain political support regarding the use of public funds (OECD, 2020).
Contribution of migrant doctors and nurses to tackling COVID-19 crisis in OECD countries
While the number of medical and nursing graduates has increased significantly in the majority of the OECD countries over the past two decades, the shares of foreign-trained or foreign-born doctors and nurses have also continued to rise. As a result, across the OECD countries, nearly one-quarter of all doctors are born abroad and close to one-fifth are trained abroad. Among nurses, nearly 16% are foreign-born and more than 7% are foreign-trained.
Policy responses to the global health workforce shortage:
Implement to its full scope the “WHO Global Code of Practice on the International Recruitment of Health Personnel”
Reinforce international co-operation to address the global shortage of health workers.
Increase training capacity in receiving countries and improve retention into the health workforce to reduce domestic shortages and misdistribution by geographic area or specialties, to avoid becoming dependent on international recruitments.
Ensure that migrant health workers have equal working conditions with other health workers and acknowledge their contribution to the functioning of national health systems, including in the context of the COVID-19 pandemic.
Address the risk of “brain waste” by streamlining procedures for the recognition of foreign qualifications and reinforcing the offer for bridging courses where appropriate.
Recognise the opportunities associated with the internationalisation of medical education but align the number of internship and specialty training places to allow international students to complete their training.
Reinforce international co-operation, notably Overseas Development Assistance and technical assistance, to help less advanced countries build up a sufficient health workforce and to strengthen their health systems, thereby mitigating factors that are pushing health professionals to leave.
Testing for COVID-19: A way to lift confinement restrictions
There are three ways that testing can be used to manage COVID-19:
First, strong and effective testing, tracking and tracing is needed. If implemented properly, TTT is the most promising approach in the short-run to bringing – and keeping – the epidemic under control without resorting to widespread lockdowns of social and economic life. This sort of approach also provides key intelligence on the spread of the epidemic.
Second, serologic tests among targeted priority population groups (e.g. health and other essential function workers) are needed to assess their immunity, so could be used to let them work without the need for repeated isolation. Potentially, this approach could also be extended to cover more of the population, assisting in restarting economic activity.
Third, once rapid serologic tests are reliable enough for utilisation at large scale, widespread testing will allow the estimation of how far away we are from herd immunity in the population. This is crucial information to inform how to adjust social distancing measures.
Despite the fact that a relatively low number of people have so far been infected and thus we are still far from herd immunity, the successful implementation of serologic testing strategies at large scale can help reduce the spread of the virus and complement the TTT strategy. This will also require major efforts, including: 1) verifying the clinical performance of tests, particularly for rapid serologic tests; 2) preparing procurement and logistics arrangements to scale up production and deployment of the tests, and train and deploy human resources, particularly for diagnostic RT-PCR tests; and 3) providing adequate safeguards to protect civil right and privacy of populations while deploying or apps-enabled tracking strategies.
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Global Arena Research Institute launches the "Beyond" Initiative
The global COVID-19 emergency emphasizes local and nation-based responses and national
collectivism in general. In the short term, it is understandable. The multilateral institutions (including the EU) were not devised with such a scenario in mind.
However, in the long run, going national and going local is not the way forward. Nation-states cannot win the fight against COVID-19 (or similar threats in the future) by themselves. Moreover, there is a mounting risk that such a nationalist bias will endure and last beyond the COVID-19 crisis.
GARI believes, instead, that it is imperative to look "beyond" the local and national horizons
As of today, GARI launches the initiative "Beyond" to stress this point. We are starting by tracking and highlighting global, multilateral and EU-related measures to tackle COVID-19 and its consequences. We believe that the COVID-19 coverage in the (social) media favours reporting on national measures and national policies and politics, thus further prompts nationalism as such.
Our subsequent goal is to follow on implementation and impact of these measures in a coherent and continuous manner.
Any suggestions, inputs or comments welcome (via FB messenger, LinkedIn or email )