With about 16 more days left to close 2020, the economic fallout of the COVID-19 pandemic lingers, showing no signs of waning, and a resurgence has already evolved in many countries.
According to a new report released today, December 15, 2020 by Oxfam International and Development Pathways more than one-fourth (1/4) of the world’s population- over 2.7 billion people have had no financial support from their governments in their time of need in this COVID era with unprecedented difficulties. This very wide bracket of people is descriptive of hundreds of millions of people who have lost their jobs, others have further plunged into debts and/or skipped meals for several months.
While the report acknowledges that social protection schemes have been widely implemented across the globe, none of these supports offered to the unemployed, elderly people, children and families in low and middle-income countries has been adequate to meet basic needs. Based on Oxfam researchers’ analysis, 41 percent of government support was only a one-off payment and almost all government support has now halted, the report suggests.
Researchers of Oxfam International and Pathway hint that, “while wealthy countries have injected $9.8 trillion in to their economies, including significant measures to support workers and the general population, the majority of low-and-middle income countries have not been able to deploy the same ‘whatever-it-takes approach’ to protecting their people and economies.”
Statistics from the World Bank on additional cash channeled to social protection programs (labour interventions, social assistance and social insurance) shows that 28 advanced countries have disbursed $695 per capita whereas low-and middle-income countries invested from as low as $28 to a further low amount of $4 per capita.
Without paying attention to the vulnerable in low- and middle-income countries who have toppled into worsening conditions due to the COVID-19 pandemic then, what we fear could happen may eventually befall us (i.e. a geometric rise in extreme poverty levels, increasing vulnerabilities and inequalities, etc.)
To avert all these, low- and middle-income countries must invest in universal social protection (USP). According to the report, “building a USP programme is not only an affordable and effective means to protect the welfare of citizens and save economies in the short term by keeping or increasing the level of consumption, it is also a smart investment that is likely to boost economic development in the medium to long term.”
Considering its affordability, Oxfam and Development Pathways have identified that USPs can be expanded to reach all people. According to the report, 75 percent of countries investigated by Oxfam have introduced cash-based emergency social protection through a horizontal expansion of their social protection programmes (i.e. reaching more people), or by a vertical expansion (i.e. increasing the value of benefits).
Against this backdrop, Oxfam International and Development Pathway recommend that low- and middle-income countries must of necessity increase their budgets for social protection by 2 percent of GDP on average. This could help close the existing financing gaps and ensure a universal basic minimum for children, elderly people, mothers and people with disabilities.
Countries should focus on maximizing the poverty and inequality-reducing effects of social protection by targeting the reach of all people with one or more benefits; delivering benefits to women; informal workers, migrants, etc. Also, gender-transformative avenues should be provided to allow women better cope with care burdens, time scarcity and their weakened position in the labour market.
Moreover, the report highlights that there should be increase in wealth taxes on richest citizens and corporations which can further be redistributed to those in dire need of help in these times. These taxes must be commensurate with the current pandemic situations.
Meanwhile, support from advanced countries cannot be ruled out, the report hints. Rich countries can support through establishing a global fund for social protection; significantly improving the quantity of international aid in support of social protection programmes; cancellation of debts and revising the debt service suspension initiative to reflect more broadly possibilities of debt reliefs for countries.
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