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Spotlight – Responding to the economic and social impacts of COVID-19

Responding to the economic and social impacts of COVID-19 and increasing long-term resilience

Interview with Henriette Geiger, Director, People and Peace, Directorate-General for International Cooperation and Development, European Commission

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Henriette Geiger, Director, People and Peace, Directorate-General for International Cooperation and Development, European Commission

How is COVID-19 expected to impact employment in developing countries?

The coronavirus outbreak has fast evolved into a global pandemic, and is leading the world into a deep economic crisis, with major social and economic ramifications, not least on employment. While we will not know the full consequences for some time yet, we already see that unemployment and underemployment are rapidly on the rise, business activity is shrinking and supply chains are being disrupted.

60% of the global workforce is in the informal economy and are extremely vulnerable to economic shocks. The ILO has estimated that up to 1.6 billion informal economy workers, representing half of the global workforce, have already suffered big reductions in their capacity to earn a living and risk losing their livelihoods, as a result of the economic consequences of COVID-19.

The numbers are truly staggering, and those that will feel the greatest impact are the working poor and workers without adequate protection, including the young, the elderly and migrants. This all comes on top of a situation facing workers that was far from positive before the outbreak, where over 2 billion workers were in informal employment and 55% of the global population was without any access to social assistance and benefits.

What has been the EU’s response to protect workers and prevent the most severe economic and social impacts?

The EU has responded fast, recognising the seriousness of the pandemic – which was most severely felt in Europe after the initial outbreak in China – and is leading the charge for a global coordinated response to meet the many challenges, not least related to the economic and social impact.

The EU collective action resulted in quickly mobilising EUR 15.6 billion from existing resources. The Communication adopted on 8 April sets out the plans for a robust and targeted response to support partner countries in their efforts for immediate humanitarian needs and for mitigating the socio-economic impact.

The EU’s support to the ongoing economic and social upheaval, and especially the impact on jobs and employment, requires action on several fronts, including the provision of support to counteract macro-economic shocks, appropriate backing to financial intermediaries and a mix of financing options for the public and private sector. These measures all include a protective framework for the workforce and incomeless households, and will incentivise employment retention, the protection of incomes, the protection of worker safety and widening access to social protection, with necessary safeguards for human rights and labour rights.

We have created a “Team Europe” response, joining the forces of the European Commission and EU Member States. First and foremost we are ensuring that all essential programmes related to basic services such as water and sanitation, food security, health, education and social protection are delivered. We are focusing our attention on countries and populations that are most vulnerable and targeting groups who are more exposed to the economic and social impact notably the elderly, youth, women and girls, and migrants and refugees.

We have created a “Team Europe” response, joining the forces of the European Commission and EU Member States.

Henriette Geiger, Director, People and Peace, Directorate-General for International Cooperation and Development, European Commission

In Sierra Leone, for example, the EU is supporting the country to strengthen macroeconomic resilience and stability, while a cash transfer programme is protecting the incomes of the most vulnerable and local food production is being safeguarded. Another initiative is a dedicated social protection technical assistance programme for countries seeking to strengthen and expand social protection to cover the most vulnerable in response to the COVID-19 crisis.

The COVID-19 pandemic is worsening inequalities and hitting the most vulnerable most, what lessons can we take from this and what should the priorities be moving forward?

Adding to the effect of the pandemic on vulnerable workers such as migrants, youth and the elderly, COVID-19 is increasing social and economic inequalities worldwide.

I have already spoken of the frightening impact on employment, which may lead to situations of untenable economic inequalities, with potential risks of instability, if not responded to.

Health inequalities, in terms of access and quality, will be laid bare. Many countries that may be hardest hit, will be coping with other major health crisis, such as HIV-AIDS, malaria and malnutrition, leading to a rise in the incidence of non-communicable and other chronic illnesses. An overwhelming burden on already stretched health systems will mean their capacity to provide essential health services will be under severe strain, and may be compounded further, if large number of health workers get the virus.

The pandemic is also expected to have intergenerational effects due to the impact it is having on the elderly, women and on education systems. Women are over-represented in economic sectors most affected, such as the service and care economies. The burden on women will only increase with schools closing or if family members contract the virus. Past epidemics saw a sharp increase in unplanned pregnancies amongst adolescent girls, who will be less likely to return to school, reducing their future prospects. If schools are closed, it will be the most vulnerable students that will be most affected and school drop-outs may rise dramatically, if there is not an appropriate response.

Women are over-represented in economic sectors most affected, such as the service and care economies

Henriette Geiger

These considerations demonstrate the importance of key pillars of the sustainable development agenda, which are access to decent work, health and social protection, which strengthen a country’s overall resilience to shocks.

The COVID-19 crisis is a dramatic wake-up call for the global community, and should focus attention on our shared commitments towards the full implementation of the 2030 Agenda for Sustainable Development. Achieving the Sustainable Development Goals, including SDG 8 on decent work and economic growth and SDG 10 on reduced inequalities, remain crucial to help better equip the world for future shocks. Now, we require even greater and more sustained efforts to reach the ambitious targets set in 2015, and the EU is ready to support our partners in responding to the COVID-19 crisis and achieving the sustainable development targets, beyond.

Economic and social impacts of COVID-19 in numbers
Economic and social impacts of COVID-19 in numbers
EU / EU

The EU in Action

Urgent COVID response to support garment workers’ rights and livelihood

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Watch a video on the EU’s COVID-19 Global Response

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EU Delegations in action against COVID-19:

Le video clip a été produit par la Délégation de l’Union européenne au Niger en réponse à la crise sanitaire mondiale comme action de sensibilisation de la population nigérienne pour la prévention envers le coronavirus.

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EU Delegation to Myanmar - Garment workers receive first payment from EU's Myan Ku emergency cash fund, read more here.

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