Current conditions, scenarios and projections to 2030 amid the COVID-19 crisis - Alicia Bárcena - Cepal
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Current conditions, scenarios and projections to 2030 amid the COVID-19 crisis 3 April 2020 Alicia Bárcena Executive Secretary Economic Commission for Latin America and the Caribbean (ECLAC)
The world is facing a health and humanitarian crisis without precedent in the past century
COVID-19 comes amid an adverse context: global economic
growth had been slowing up to 2019
Global GDP growth, 1970–2020a Growth in global trade volumes, 1982–2019
(Percentages, on the basis of constant 2010 dollars, at market exchange rates) (Percentages)
Average 1997–2006:
6.4%
Average 2011–2019:
2.6%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: ECLAC, on the basis of Department of Economic and Social Affairs (DESA) of the United Nations. Source: CEPAL sobre la base de datos de la OMC.
a The figures for 2019 and 2020 are projections.
The crisis will sharpen geopolitical rivalry and
the struggle for technological dominance
United States: goods trade balance with China, China and the United States: Global patent applications,
by technology level, 2018 1990–2018
(Billions of dollars) (Percentages)
Source: ECLAC, on the basis of UN Comtrade - International Trade Statistics Database. Source: ECLAC, on the basis of World Intellectual Property Organization (WIPO).
Five characteristics of the COVID-19 crisis 1. The world is facing a health and humanitarian crisis without precedent in the past century, in what is an already adverse economic context; unlike in 2008, this is not a financial crisis but a crisis affecting people, health and well-being. 2. In a war economy situation, the role of the State, rather than the market, is essential. Governments are therefore taking on a key role to contain the virus and the risks that affect the economy and social cohesion. 3. To flatten the curve of infection will take measures to reduce interpersonal contact, which will cause economic contraction, paralyse production activity and destroy sectoral and aggregate demand. 4. How not to flatten the economy: strict and effective observance of quarantines and public health measures will be the fastest and most efficient way to reduce the economic costs. 5. International cooperation: the way out of the crisis will depend on the economic strengths of each country. Given the asymmetries between developed and developing countries, the role of the United Nations, the International Monetary Fund and the World Bank will be essential to ensure access to financing, safeguard social spending and support economic activities with out of the box measures.
The magnitude of the economic impact will depend on the spread of the virus
and the effectiveness of containment measures all over the world
Confirmed cases of COVID-19 worldwide and global growth forecast
(Number of cases and percentages)
Source: ECLAC, on the basis of Bloomberg Economics, Goldman Sachs and Johns Hopkins University.
Limiting the economic impact of the pandemic: the international response
The economic prescription of the West: fiscal
stimulus, State guarantees and economic measures
Selected countries: economic measures adopted to face the economic impact of COVID-19
Measure Countries
United
Germany Spain Italy
States
State loans and loan guarantees for companies X X X X
Unemployment subsidies X X X X
Tax deferral X X X X
Deferral and subsidization of social security
payments X X X
Deferral of loan payments X X
Source: ECLAC, on the basis of official data.
Note: in the United States, includes measures such as tax deferrals (e.g. tax credits, tax filing delays).
Fiscal policies for economic recovery
and corporate guarantees
Selected countries: economic measures
(Percentages of GDP)
Italy Germany Japan United Kingdom France Spain United States
Fiscal policy 1.1 3.6 0.1 2.2 1.9 1.5 9.3
Heath spending 0.2 0.2 0.2 0.3
Spending on economic
recovery
0.9 3.4 1.2 1.2
Other fiscal measures 2.7 3.5
State loans and loan
guarantees for 19.7 41 0.3 14.9 12.4 8
companies
Source: ECLAC, on the basis of official data and IMF.
Germany: subsidies for firms and workers
and long-term loan guarantees
Germany: fiscal stimulus by component of spending
Additional guarantees
ü Possibility of expanding public debt
by € 2 billion
ü € 100 billion for equity in
struggling firms
ü € 100 billion to KfW for
company loans
ü Guarantee fund for loans to
companies
ü € 400 billion for the
stabilization fund
ü € 822 billion for KFW
Source: ECLAC, on the basis of official data and IMF.Spain: instruments to help firms and workers
and health spending
Spain: fiscal stimulus by component of spending
Additional guarantees
ü State guarantees for company
loans up to € 100 billion (ICO)
ü Private investment stimulus:
€ 100 billion
Source: ECLAC, on the basis of official data and IMF.France: social security, companies
and employment
France: fiscal stimulus by component of spending
Additional guarantees
ü State guarantees for loans to
firms through PBI bank:
€ 300 billion
Source: ECLAC, on the basis of official data and IMF.Italy: health emergency, unemployment subsidies
and help for companies
Italy: fiscal stimulus by component of spending
Additional guarantees
• Guarantees for loans to firms:
€ 86 billion
Source: ECLAC, on the basis of official data and IMF.United States: companies, employment and the public sector
United States: fiscal stimulus by component of spending
Additional guarantees
ü US$ 867 billion
in guarantees
Source: ECLAC, on the basis of official data and IMF.The economic effects of the pandemic on Latin America and the Caribbean
Latin America and the Caribbean: seven years of slow growth
with rising poverty, extreme poverty and inequality
Latin America and the Caribbean: annual GDP growth and average by Latin America: poverty and extreme poverty rates, 2002–2019
decade, 1951–2020 (Percentages)
(Percentages)
10 1951–1959: 1960–1969 1970–1979 1980–1989 1990–1999 2000-–009 2010–2019
5.0% 5.8% 6.0% 2.2% 2.8% 3.0% 1.9%
8
6
4
2
0
-2
-4
1951
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
Source: ECLAC, on the basis of official figures. Source: ECLAC, on the basis of household survey data bank (BADEHOG).The worst investment performance since the lost decade
and falling productivity relative to the rest of the world
Latin America and the Caribbean: rate of change in gross fixed capital formation, 1971–2018 Latin America and the Caribbean (17 countries): labour productivity relative
to the rest of the world, 1950–2018
(Rest of the world=100)
Source: ECLAC, on the basis of official data.
Source: ECLAC, on the basis of Total Economy Database, The Conference Board.The start of a deep recession?
Facing the pandemic with a weak economic performance
GDP growth rates: world and Latin America and the Caribbean, 2019–2020
(Percentages)
Latin America and the Caribbean:
GDP growth projections, 2020
(Percentages)
This projection considers only the
external transmission channels of the Institution Rate Date
crisis, and the effects of the economic Goldman Sachs -3.8% 27/3
contraction in China.
Capital Economics -1.9% 27/3
However, confirmed cases of infected Bank of America -1.6% 19/3
people have spread to the European
-1.8
Union, the United States and LAC Credit Suisse -1.5% 17/3
countries. Therefore, greater economic
impacts for the region are expected. In
that context, -1.8% should be considered
as a baseline projection.
Source: ECLAC, on the basis of official data.ECONOMIC IMPACTS OF COVID-19 IN LATIN AMERICA AND THE CARIBBEAN
Measures to limit direct Indirect impacts on supply
Direct impacts on health costs: quarantine and
systems and demand
social distancing
Education
Extraordinary burden on
insufficient and fragmented Commerce Suspension of
systems Higher
Tourism and domestic production unemployment
transport
Unequal access to medical
treatment by income, health Manufacturing
insurance and place of residence Global recession
Natural resources
Medium- and long-term impacts Short-term effects
• Bankruptcies • Higher unemployment and more precarious working
• Downturn in private investment conditions
• Lower wages and incomes (contraction of consumption)
• Weaker economic growth
• Increasing poverty and extreme poverty
• Less integration into value chains
• Health systems: higher costs, fragmentation and
• Erosion of productive capabilities and human capital inequalities of accessDirect effects: Capacities of health care systems
The health-care infrastructure is insufficient to address the problems
created by the pandemic
Latin America and the Caribbean: number of hospital beds per 1,000 people, Selected countries: intensive care hospital beds per 10,000 inhabitants,
2018 or latest available data 2018 or latest available data
Source: ECLAC, on the basis of data from the Organization for Economic Cooperation and Development
(OECD).
Source: ECLAC, on the basis of Central Intelligence Agency (CIA), The World Factbook 2018, Washington,
D.C., and data of the Organization for Economic Cooperation and Development (OECD).The health-care system in the region does not have the human resources
needed to address the pandemic
Latin America and the Caribbean and other countries: doctors per 1,000 inhabitants, 2014
Source: World Health Organization Global Health Observatory . The regional figure is a simple average of 24 countries.The region’s inequalities in access to health care are increasing
the economic and social cost of the crisis
Latin America (14 countries): affiliation or contribution to health systems by employed persons aged 15
and over, by per capita income deciles, national totals, 2002–2016
(Percentages)
§ Health-care systems
with considerable
fragmentation
between services,
differentiated by
income levels
§ In the bottom income
decile, just 34% of
workers contribute to
or are affiliated to a
health system
Source: ECLAC, Social Panorama of Latin America, 2018 (LC/PUB.2019/3-P), SantiagoTo strengthen health systems, public spending
must be increased and improved
Latin America and the Caribbean: health sector spending as a percentage of GDP, 2019 § On average, the
countries of the
region spend 2.2% of
GDP on health
§ The health-care
systems in the region
were already under
pressure from the
dengue epidemic
§ Fiscal space must be
found to strengthen
Source: Source: Economic Commission for Latin America and the Caribbean (ECLAC), Social Panorama of Latin America, 2018 (LC/PUB.2019/3-P), Santiago. the region’s health
United Nations SDG Indicators (2020) [online] https://unstats.un.org/sdgs/indicators/database/
care systemsIndirect effects: a slowdown in global demand and disruption of value chains
Six external transmission channels will affect
the regional economy
A drop in trade A fall in Disruption
with key trading commodity of global
partners prices value chains
Heightened risk
aversion and
Less demand for Decline in
remittances worse global
tourism services
financial
conditionsThe value of exports is expected to fall by 10.7% in 2020,
owing to falling prices and lower global aggregate demand
Latin America and the Caribbean: impact of COVID-19 on goods exports by subregions
and major exporting countries, forecast for 2020
(Percentage change)
-4.0%
-7.4%
-9.3%
-10.7%
-13.8%
Source: ECLAC.The disruption of production chains is having a significant impact on
the regional economy, owing to its engagement in low-tech activities
Selected countries, manufacturing: final aggregate demand value, by origin
(Percentage of countries of origin in total final demand)
Origin Destination
Ø The disruption of global value chains has crucial
repercussions for the region:
• Disruption of the related production activities
• A slump in related service activities
• A decline in the supply of imported goods
Ø One of the first sectors to be affected was
manufacturing, and particularly the automotive
industry, which the region participates in
through low-tech links in chains.
Source: Source: Economic Commission for Latin America and the Caribbean (ECLAC),
Organization for Economic Cooperation and Development (OECD) Trade in Value-Added (TiVA)Regional integration is crucial to addressing the crisis
The size of the manufacturing sector is important in terms of scale,
scope and know-how
Selected countries, manufacturing: global final aggregate demand
(Billions of dollars, 2015) • The countries of the region have unsophisticated
production capacities, which are fragmented at the
regional level
• National and regional capacities must be bolstered
to address the crisis, primarily in production and
supply of basic necessities
• Intraregional trade and logistical integration must
be promoted, to guarantee the supply of goods and
to sustain regional production activities
• It is essential to continue to build regional spaces
and strengthen complementarities between
countries’ production systems to reduce their
external vulnerability and increase international
competitivenessThe importance of medical supplies during the COVID-19 crisis.
The pharmaceutical industry is concentrated above all in Europe, North America and Asia
World: pharmaceutical sector exports, 2018 Latin America and the Caribbean: pharmaceutical sector exports, 2018
(Millions of dollars) (Millions of dollars)
European Union United States Asia Latin America Switzerland United Kingdom Total: ≈ US$ 7 billion
and Canada and the Caribbean
Source: Economic Commission for Latin America and the Caribbean (ECLAC), World Trade Organization.The supply of pharmaceutical products is crucial.
Trade must be facilitated and tension must be reduced to ensure
the passage of and access to medication and medical equipment
Latin America: pharmaceutical sector imports, 2018 Caribbean: pharmaceutical sector imports, 2018
(Millions of dollars) (Millions of dollars)
250
200
Total: ≈ US$ 25 billion Total: ≈ US$ 500 million
150
100
50
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Source: Economic Commission for Latin America and the Caribbean (ECLAC), World Trade OrganizationTowards a new production geography?
Nationalization and regionalization
§ The crisis has highlighted the exposure of national economies to vulnerabilities arising from
offshoring production.
§ Production models will be redefined and global interdependence will decrease, replaced by national
and regional policies.
§ Countries have started to restrict exports of medical equipment and pharmaceutical goods.
§ Latin America and the Caribbean does not have the production capacity to withstand an across-the-
board disruption of value chains.
§ Countries’ resilience will depend on the complexity of their production structures and the level of
regional integration.
§ The crisis will deepen inequalities between the subregions.
§ Investing in strengthening regional production capacities is imperative, to reduce production and
technological vulnerability.Internal effects: Measures to contain and prevent the virus, and suspension of economic activities
Full containment measures would have a cost in terms of output
(up to 67% of GDP) and employment (up to 64% of formal employment)
Latin America and the Caribbean: 2018 GDP by sectors Latin America and the Caribbean: 2018 formal employment
of economic activity, percentages by sectors of economic activity
(Percentages) (Percentages)
Sectors that
may shrink Sectors that
may shrink
13% Commerce, hotels 14%
and restaurants Commerce,
12% hotels and 25%
Transport 10% restaurants
8% Transport 6%
Business 64%
7% 67% services
19% 0% Business serviecs
8%
1% Social services
15% 25%
2% 6% Social
services 24%
5%The impact of social distancing measures on employment may be amplified by
the deterioration in the distribution of employment, high proportions of own
account workers, and high levels of informality
Latin America (10 countries): economic growth and year-on-year growth in employment, Latin America (10 countries): year-on-year change in informal
by employment category, 2010 – first quarter 2019 employment rate, 2018 and 2019a
(Percentages) (Percentage points)
Source: ECLAC, on the basis of official figures. Source: ECLAC, on the basis of official figures.
a
The 2019 data refer to the year-on-yea change in the period from January to September.Containment and quarantine measures are exacerbating
the care crisis in the region
§ Prior to the health crisis, women spent 22 to 42 hours a week on domestic and
care work activities.
§ Women are particularly affected by the pressure on health systems because
they account for 72.8% of people employed in the sector in the region
§ The vulnerability of paid domestic work (11.4% of working women in the region) is increasing:
• 77.5% of those engaged in paid domestic work are in the informal sector
• Increased workloads as a result of school closures
• Higher demand for health care
• Restrictions on movement are preventing female domestic workers from doing their jobsLimiting the economic impact of the pandemic: the region’s response
The impact will depend on the containment and mitigation measures
implemented by the countries
1. Duration of the health crisis: social distancing measures.
2. Social impacts through employment and household income. The services sector,
which accounts for a large share of employment and GDP, will be the hardest hit.
3. Impact on productive capacity through the effects on SMEs, large companies
and productivity.
4. Fiscal impacts, deficits and debt owing to weaker economic activity:
§ The world and the region are facing a recession that will have short-
and long-term effects.
§ The key will be minimizing pandemic costs and ensuring that growth resumes.
§ The magnitude will depend, among other factors, on the strength of the economic
response, in which fiscal policy plays a fundamental role.The region’s countries have implemented immediate measures to contain
the virus and protect the workforce and household income
• Restriction and monitoring measures for • Total quarantine with working arrangements: legal measures for
travellers from areas affected by COVID-19. teleworking, reduced working hours, introduction of flexible
• Flight bans (to and from specific countries) and hours, advance leave, and protection of workers from dismissal.
border closures. • Protection of the workforce and income: wage support to offset
• Distance learning and homeschooling with loss of income through advance payments, wage subsidies or the
asymmetries in connectivity. strengthening of unemployment insurance and the suspension
or reduction of payments of contributions for water, gas and
• Social distancing, with the closure of restaurants,
electricity services and to private pension funds.
bars, cinemas, the encouragement of
teleworking and reduced office hours. • Social protection to reduce the social impact on people with the
lowest incomes through subsidies, cash transfers or advance
• Health infrastructure in the region is fragmented
payments through ongoing social programmes and social
(2.5 beds / 1000 people).
protection schemes.
• Strengthening of the capacity of the health
• SMEs and other companies: financial support for SMEs and the
sector: beds, mobile hospitals, medical supplies.
informal sector, in order for banks to renegotiate or improve
conditions for loans to SMEs and the informal sector.Monetary, fiscal and social measures to avoid the collapse
of the economic system
• Monetary and financial sector: preserving bank liquidity and trade, addressing public and private debt,
central bank interest rate cuts, special credit lines and additional loans, extending repayment deadlines (for
consumers and companies) or mortgages, and renegotiation of loans and credit by banks and businesses.
• Fiscal: flexibility to redirect State budgets, tax relief, postponement of deadlines for filing tax returns or tax
exemptions for certain economic sectors. Ministries of finance will have to reorganize budgets and seek
additional financing to channel resources towards urgent short-term measures.
Examples of large fiscal packages: Argentina, the Bahamas, Barbados, Belize, Brazil, Chile, Guatemala,
Honduras, Jamaica, Paraguay, Peru, Trinidad and Tobago and Uruguay have implemented packages ranging
from 0.2% to 4.7% of GDP.
• Preserving productive capacity and creating conditions for the revival of economic activity through
liquidity mechanisms for companies, particularly SMEs.
• Expanding social protection systems to ensure that they cover underemployed or self-employed workers,
young people, women, children and older persons.However, many middle-income countries lack the fiscal space to implement
stimulus measures. International support is urgently needed
Fiscal measures to address the effects of the pandemic and central government debta
(Percentages of GDP) COVID-19 economic measures
(Percentage of GDP)
Fiscal
Country
measures
Chile 4.7
Brazil 3.5
Trinidad and Tobago 3.3
Paraguay 2.5
Honduras 2.2
Barbados 1.4
Jamaica 1.1
Argentina 1.0
Guatemala 1.0
Belize 1.0
Peru 0.8
Uruguay 0.7
Bahamas 0.2
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures and International Monetary Fund (IMF).
.a The estimated amounts of the packages do not necessarily represent additional spending.The countries of the region have implemented immediate measures
to contain the virus
§ Measures for the restriction and monitoring of travellers from areas where outbreaks have occurred.
§ Flight bans (to and from specific countries) and border closures.
§ Distance learning and homeschooling despite asymmetries in connectivity.
§ Social distancing.
§ Strengthening of the capacity of the health sector.
§ Total quarantine with flexible working arrangements.
Latin America and the Caribbean: measures taken to limit the spread of COVID-19The countries of the region have implemented immediate measures to
limit the economic impacts of the crisis
Latin America and the Caribbean: measures taken to mitigate the economic impact
§ Protection of the labour force
and income.
§ Social protection to reduce the
social impact on the lowest
income groups.
§ Measures to support SMEs
and companies.
§ Fiscal policies and instruments
to stimulate and protect
economic activity.
§ Monetary policies to guarantee
the functioning of the financial
and banking system.
§ Measures to preserve
production capacity.In the short term, implement immediate measures —adapted to
countries’ realities— to flatten the curve of contagion
without flattening the economy
1. Address the health emergency
• Immediately and efficiently implement the containment measures suggested by WHO.
• Strengthen health systems and guarantee universal access to testing, medicine and treatment.
2. Address the social emergency
• Emergency basic income that guarantees consumption for the entire population, especially
the vulnerable segments.
• Employment protection measures, unemployment subsidies and leave.
• Measures to support SMEs and own-account workers.
3. Address the economic emergency
• Fiscal policy: reorganize budgets (and if necessary access savings or take on debt) to implement fiscal stimulus
packages in order to strengthen health systems, protect income and minimize the contraction of the economy.
• Monetary policy: stabilize exchange rates and protect the solvency and functioning of the banking market.
• International cooperation: reconsider the concessional loan and graduation policies of international
organizations. Facilitate low-interest loans and postpone debt servicing for developing countries including
middle-income countries.In the long term, the region must rethink its development strategies
1. Strengthening of subregional and regional coordination and integration:
• Secure supply chains of critical goods.
• Voluntary, not forced, migration.
• Poverty relief and reduction of inequality.
• Strengthen intraregional trade and production chains.
2. A regional fund dedicated to the specific needs of middle-income countries to support social,
economic and productive recovery.
3. Managing debt in a difficult and uncertain macroeconomic context will require flexible support
from multilateral financial organizations. Developing countries must collectively negotiate loans
with favourable conditions and debt servicing, and review the graduation policies
for middle-income countries.
4. ECLAC provides an intergovernmental platform to bring together stakeholders from the public and
private sectors, civil society and academia to develop policy solutions for the long-term impacts
of the crisis and to monitor its impacts.The uneven progress made on the SDGs, especially in light of the pandemic, is at odds with the comprehensive spirit of the 2030 Agenda
Simulation exercises for 72 statistical series of SDG indicators
The simulations continue the simulation exercise
presented by ECLAC at the high-level political forum
on sustainable development in 2019: Categories used for the
classification of indicators
• Series for all the SDGs
Target likely to
• The number of series quadrupled from 18 to 72 be reached only Target likely to
with significant be reached with
public policy public policy
• 69 series belong to the set of 150 indicators intervention intervention
prioritized for the region
Progress stalled Target likely to
be reached on
• 49 targets analysed (53% of the targets covered the current trend
by the indicators prioritized for the region)
Target already
reached
RegressionEven before the pandemic, extreme poverty would only have been possible to
eradicate with strong redistribution of income and high GDP growth
Latin America: projected regional extreme poverty rate in 2030 with different scenarios of per
capita GDP growth and changes in income distribution, not including the impact of COVID-19
META
Erradicar la pobreza
extrema
Source: ECLAC, on the basis of household survey databank (BADEHOG).A preliminary estimate of the potential impact of COVID-19 on extreme poverty
in 2020 suggests that the target of SDG 1 will not be met
Latin America: projection of the extreme poverty rate to 2030 in various scenarios of per capita GDP growth
and income distribution change, and a simulation of the impact of COVID-19 on extreme poverty in 2020
Effect of Covid-19
Erradicar la pobreza
extrema
Source: ECLAC, on the basis of household survey databank (BADEHOG)Warning signs just 10 years from 2030
Progress with 72 statistical series for the indicators for the 17 SDGs in the region
SDG No. of series Degree of progress
4 Target already reached
15 Target likely to be reached on the current
trend
8 Target likely to be reached only with more
public policy intervention
Target likely to be reached only with
13 significant public policy intervention
27 Progress towards the target
stalled
5 Regression from the target
Source: ECLAC.Moving into a decade of action and delivery
§ Policies to implement the 2030 Agenda are more crucial than ever.
§ The new global panorama with COVID-19 reaffirms the need for urgent actions.
§ It is imperative to assess the impact of such policies. To support follow-up and monitoring of progress
in the medium- to long-term, ECLAC has launched two instruments :
§ The Sustainable Development Goals Gateway
§ The COVID-19 Observatory in Latin America and the Caribbean :
§ An undertaking coordinated by ECLAC with support from the United Nations
Resident Coordinators.
§ The Observatory will provide updated information on policy announcements
by each country and other material of interest.
§ It contains information on movements within and between countries, as well as on health,
employment, the economy and schooling.The region has no other strategic option but to move towards a more
sustainable development model, through greater integration
• Only a new development model will prevent a return to the path that led to a
situation in which the impact of the pandemic may be devastating in the short term
but may also hit the conditions for recovery and development.
• Latin America and the Caribbean needs a strategy to:
• Diversify its economic structure
• Integrate its production and commerce
• Step up actions to adapt to and mitigate the environmental emergency
• Strengthen policies to combat poverty, inequality and the culture of privilege
• Implement social protection policies, with universal coverageAnnex: Policies for tackling the pandemic
ECLAC proposes taking immediate action,
to flatten the contagion curve…
Type of
Policy area Goal Required actions Specific actions
measure
• Perform testing to detect all cases as soon as possible.
• Implement measures, such as quarantine, telework and school
closures, to strictly restrict movement of people and reduce
Take decisive early action to prevent
person-to-person contact.
COVID-19 from spreading further or
• Provide safe and effective clinical services to effectively isolate all
bringing its spread to a halt
COVID-19 cases.
• Protect medical workers and maintain the supply of medical
essentials by managing the supply chain.
Measures to Containing and preventing
support people Health transmission of the virus, to
end the pandemic.
• Develop, produce, distribute and make available laboratory testing
kits, reactants, support material and infrastructure, to ensure
that all those who require testing have access
• Ensure that basic medical supplies arrive
Increase the resilience of health care • Ensure that supply chains are protected and prioritized
systems and continue to operate efficiently, and that products
are distributed according to need.
• Diagnosis, medicines and vaccines for all those who need them,
and ensure equiable access.…taking into account the needs of SMEs and the most vulnerable sectors
Type of
Policy area Goal Required actions Specific actions
measure
• Provide assistance to maintain the flow of essential inputs, end products and services.
• Consider temporarily reducing social security contributions and value added tax and offering tax
Specific, direct support for rebates.
SMEs • Interest-free borrowing for companies to pay wages.
• Deferral of loan payments.
• Subsidies can facilitate payment of rent, public services, wages and basic services.
Address the various
social dimensions of the
crisis, focusing on the • Financial support for the unemployed and underemployed
segments of society that • Financial support for self-employed workers, people who have been dismissed
Protecting are at risk • Paid leave to care for family members or for medical reasons
Measures to
employment and (women, children, Measures to support • Moratorium on rent payments, bills for public services, value added tax
support people
the most workers with low wages, continued employment • Deferral of tax, social contributions, loan payments
vulnerable small and medium-sized • Subsidies for home-based care
enterprises, the informal • Support for people who do not have paid leave for illness, unemployment insurance or illness
sector and vulnerable benefits
groups)
• Use finance to support human rights and the most vulnerable
• Fiscal stimulus and social protection packages must directly target the people who are worst
positioned to weather the crisis
Measures to protect the • Introduce an emergency universal basic income
vulnerable population • Support people who do not have paid leave for illness, unemployment insurance, or illness
benefits
• Expand non-contributory social protection programmes, such as cash transfers
• Implement pricing regulations and combat speculation with critical productsFlattening the curve of contagion without flattening the economy requires the State to play an
active role
Type of Required
Policy area Goal Specific actions
measure actions
• Reorganize budgets to channel resources towards urgent short-term measures:
o Control the pandemic and protect the health of the population, guaranteeing the resources required by the health sector.
o Strengthen social protection systems that cater to the most vulnerable and middle-income strata through direct transfers,
unemployment insurance, and benefits for underemployed and own-account workers.
Fiscal policy o Protect productive capacity and create conditions for the revival of economic activity through liquidity mechanisms for
companies, particularly SMEs.
§ Budget reorganization will probably not be enough to finance these measures. Hence, savings from sources such as sovereign
funds and/or debt will have to be used, if available.
• Greater fiscal spending should be accompanied by greater external financing.
• Exchange rate stability requires central banks to intervene in foreign exchange markets.
• Maintaining solvency and the proper functioning of the banking system: commercial banks must have access to
Monetary
suitable levels of liquidity.
Measures to Protect the policy
• Commercial banks must be able to postpone the debt payments of companies and households.
support the population and
Economic
population prevent
policy
and the socioeconomic • Managing debt in a difficult and uncertain macroeconomic context will require flexible support from multilateral
economy collapse financial organizations, which must reconsider their concessional loan and graduation policies. Policies for low-interest
loans and the postponement of debt servicing for developing countries, including middle-income countries, are also
required.
• Moreover, extraordinary measures for coordination between ministries of finance and central banks could be required
International to finance and support liquidity flows that governments should provide to households and productive
and regional sectors. Developing countries must negotiate favourable conditions to address the crisis collectively, not on a country-
cooperation by-country basis, with multilateral credit institutions, particularly IMF and World Bank. These institutions should, for
example, grant loans at favourable interest rates and provide debt relief by postponing payment deadlines and even
forgiving the debt owed by countries weighed down by their obligations.
• Developed countries should act in a coordinated manner to avoid the worsening of external conditions for developing
countries owing to massive capital outflows and ensure that they have the necessary fiscal space to face the crisis.Examples of measures: financial and monetary policies
Policy area Policy sub-area Policy tools
• Monetary flexibilization
• Cuts in interest rates/benchmark rates
• Loans for companies affected by
COVID-19
• Deferral of business tax payments
• Temporary waiver of tax payments for
Economy Financial and monetary policies (certain) companies
• Agreement to reduce rates and cost of
sending remittances to below 3% or to
0% for the first six months
• Exchange-rate stability
• Safeguard banking system operation
and solvencyExamples of measures: support for SMEs
Policy area Policy sub-area Policy tools
• Boosting demand is one of the best ways to support
SMEs.
• Subsidies
• Suspension of rental payments / public utility bills
• Payment of deferred/cancelled social security
contributions (especially for SMEs and family firms)
Commercial banks should postpone debt payments,
interest and other changes and, above all, refrain from
Economy Support for SMEs
imposing sanctions on clients. Customers should also
be able to reprogramme and restructure debt. Banks
could also lower the cost of their services
(commissions, for example). Lastly, banks should set
up new emergency credit lines: the financial systems in
the region have the resources and the liquidity to do
this. Finance has been one of the most profitable
sectors since at least the early 2000s.Examples of measures: employment and productivity
Policy area Policy sub-area Policy tools
• Financial support for the unemployed
• Financial support for independent workers/
those laid off
• Paid family / medical leave
• One-off payment to those on low incomes
• Suspension of rental payments / public utility
bills / VAT
• Deferral of tax / social contributions / loan
Economy Employment and productivity
payments
• Regulation of prices and speculation on critical
products
• Subsidies for home care
• Support for those without paid sick leave /
employment insurance for illness.
• Mortgage protection must be considered to
safeguard access to housing and shelter.Examples of measures: poverty, social protection and inequality
Policy area Policy sub-area Policy tools
• Social protection measures must take inequality into
account and be designed to serve the most vulnerable.
• Place finance at the service of human rights and the
most vulnerable.
• Packages of fiscal stimulus and social protection must
Poverty, social protection and
Economy directly target those least able to weather the crisis.
inequality • Support for those without paid sick leave or sick leave
through employment insurance.
• Ensure access to broadband and digital tools, especially
for the most vulnerable.Examples of measures: older persons
Policy area Policy sub-area Policy tools
Incorporate an age perspective into national and
regional policy planning on COVID-19.
Social distancing policies should take into account
older persons who depend on others for care or
Social Older persons
support and need food and other essential supplies.
Oversight focused on support services and response
for older persons.Examples of measures: gender
Policy area Policy sub-area Policy tools
• Need for data disaggregated by sex, to indicate how the situation is
evolving, including differentiated rates of infection, economic impacts,
care burden and incidence of domestic violence and sexual abuse.
• Ensure that gender analysis and experience on gender is included in
response teams and working groups at the national and regional
levels. UN-Women stands ready to support these efforts.
• Ensure that social protection plans and emergency economic
measures, including for economic stabilization and recovery, take into
Social Gender account women who perform unpaid care work.
• Ensure continuous delivery of sexual and reproductive health services.
For example, some countries have taken measures to give women
access to contraceptives without a prescription during the crisis.
• Ensure that special services are set up for gender violence prevention
and response, such as direct lines, police units and new protocols for
shelters.
• Support for front-line women’s organizations and women’s leadership
and participation in short- and long-term response plans.Examples of measures: education
Policy area Policy sub-area Policy tools
• Convene a coalition of firms to support countries in offering inclusive distance
education, aligned with national study plans, as a response to the closure of
schools and universities.
• Provide technical assistance and advice to governments working to deliver
distance education.
• Develop national learning platforms.
• Make digital learning resources available for teachers and parents: free online
multilingual educational applications to help parents, teachers and schools to
facilitate learning, and provide social care and interaction while schools are
closed.
Social Education • Develop webinars for staff in ministries of education and other stakeholders to
share information on the countries’ efforts to keep education inclusive in
different contexts.
• In countries where schools remain open and meals programmes continue, it is
essential to ensure adherence to standards of hygiene, behaviour, food security
and quality, and to observe social distancing measures to reduce the risk of
infection.
• Countries where schools are closed need to seek alternatives depending on the
context. This includes providing rations for the home instead of school meals, or
cash or vouchers. Identify alternative methods and coordinate the delivery of
social services for essential workers.You can also read
