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Creative solutions needed to build social protection response to Covid-19 in developing countries according to new report

An academic from Queen Mary University of London has co-authored a policy briefing, which sets out recommendations for combatting the economic consequences of the Covid-19 epidemic in developing countries.

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Children living in poverty
Children living in poverty

The paper, Social Protection Responses to the Covid-19 Crisis: Options for Developing Countries, was co-authored by Dr François Gerard, Lecturer in Queen Mary’s School of Economics and Finance. The policy briefing was released by Economics for Inclusive Prosperity (Econfip), a network of academic economists committed to an inclusive economy and society.

Emergency social protection strategy

The global pandemic has seen governments around the world, including in developing countries, adopting a range of public health interventions in a bid to prevent the spread of the virus. These measures are likely to have an immediate negative impact on household incomes and threaten the livelihoods of those who are already economically vulnerable. To mitigate these impacts, governments are adopting emergency economic measures to provide households with some safety net.

The policy briefing sets out a range of policies which could form a comprehensive social protection strategy for developing countries, where the impact of the Covid-19 crisis is likely to be felt more acutely. Key strategies include expanding social insurance systems, building on existing social assistance programmes and involving local governments and non-state institutions to identify and assist vulnerable groups which may not otherwise be reached.

Governments will have to finance both public health and economic interventions, while experiencing shortfalls in tax revenues. However, many developing countries were already heavily indebted before the crisis, and are unable to borrow on the open market as easily as higher-income countries. The briefing calls for novel solutions to allow governments in developing countries to borrow internationally and secure additional aid quickly in order to afford an adequate public health response.

Creative solutions required

The analysis highlights the need for governments in developing countries to find creative solutions to broaden their social protection response to the economic impacts of the pandemic, so that undocumented workers, an important part of developing countries’ workforces, are not left out. For this purpose, throughout their analysis, the researchers include many examples of innovative policies adopted around the developing world in recent days.

The researchers point out that, in an emergency such as the current crisis, the benefits from such policy interventions could be greatly reduced if there are delays in implementation. In that sense, the timing of this briefing is particularly pertinent given the upcoming IMF and World Bank spring meetings, where critical decisions will likely be made on debt relief and emergency borrowing.

Dr François Gerard said: “The challenge of mitigating the economic effects of the pandemic is enormous. Any solution will be flawed in many ways because speed is of the essence. But, governments, donors and civil societies have made major gains in the last 30 years in building infrastructure to reach the poorest. If internal and external financing can be found, developing countries can use this to create the economic space for an effective public health response.”

More information

Policy paper: Social Protection Responses to the Covid-19 Crisis: Options for Developing Countries by Francois Gerard (Queen Mary University of London) Clément Imbert (Warwick University) and Kate Orkin (Oxford University) is available from the website of Economics for Inclusive Prosperity.