Can we flatten the curve without flattening the economy?
With around half of all the world’s population now under some sort of lockdown, sheltering from the deadly coronavirus, how can we keep the global economy from collapsing and save tens of millions from losing their jobs and falling into poverty? We ask UN Chief Economist and Assistant Secretary-General at UN DESA, Elliott Harris.
UN DESA is closely monitoring the COVID-19 crisis’ impacts on social, economic and sustainable development, sharing findings in a series of policy briefs. What do the findings tell us so far?
“The crisis is having a deep and negative effect on public health all around the world as infections soar and death rates mount. The containment measures that are imperative from the public health perspective have generated an unprecedented contraction in economic activity, threatening jobs and income, and the survival of millions of smaller enterprises. But the crisis does not affect all equally—it threatens to widen some of the inequalities that already exist between and within countries, and the poorest and most vulnerable are most exposed to the adverse effects, while least able to deal with them.”
Flattening the curve without flattening the economy – what action is needed to set the world on track towards a sustainable recovery?
“The first imperative is to halt the spread of the virus. At the same time, emergency economic and financial stimulus measures must be put in place to prevent the deep economic contraction from leading to widespread bankruptcies, unemployment and deep-reaching, permanent adverse social outcomes. The immediate measures should also be formulated with an eye to the recovery and contribute to a more sustainable and resilient future. For example, the social protection measures put in place in the emergency response should be maintained and integrated into a comprehensive and permanent social protection system that will strengthen the resilience to future shocks.”
UN DESA will soon be releasing policy briefs taking a closer look at the impact of COVID-19 on Small Island Developing States as well as countries in Europe. Can you give us a sneak preview of some of the main findings and recommendations from these two analyses?
“Small island developing states (SIDS) are particularly vulnerable, both to the health and the economic crisis. Their relatively weak public health systems leave their populations exposed to the virus, while the global recession threatens their economies, heavily dependent on imported food and fuel and other essential consumer goods. The tourism sector, which is a major source of foreign exchange earnings and domestic employment in many islands states, is also being hit hard by the pandemic. The recovery of SIDS will depend on how quickly global transportation, tourism travel and overall economic activity returns to normal.
Europe bore the brunt of the pandemic in March, in terms of new infections and deaths, but aggressive containment measures seem to have slowed the spread of infections in April. The lockdowns will nevertheless cause a very severe contraction of European GDP in 2020. Wide-ranging stimulus packages have been introduced in many countries, which may contain some of the economic damage. As it represents one third of the global import demand, over half of total official development assistance and 28 per cent of remittances, a prompt and comprehensive recovery in Europe will be essential for the global recovery, and a rapid return to a sustainable development trajectory.”
UN DESA’s policy briefs can be accessed on the department’s dedicated web portal on the response to the global COVID-19 pandemic.