What actions can policymakers and donors take to lessen the economic impacts of the COVID-19 pandemic for low- and middle-income countries? Here are three actions beyond the stimulus and liquidity recommendations from the International Monetary Fund:
- Contain the pandemic. As long as the outbreak is actively spreading, many aversion behaviors may well be rational and wise. Containing the disease is the first step to mitigating not only the health impacts but also the economic impacts.
- Strengthen the safety net. The most vulnerable households are those most likely to be affected economically. Low-wage workers are often those most likely to lose their jobs if they miss work due to an extended illness. They are often the least able to work remotely to avoid contracting the virus. And they are the least likely to have savings to survive an economic downturn. Making sure there is an economic safety net—cash transfers, sick leave, subsidized health coverage—in place helps the most vulnerable survive and provides support to enterprises that serve those populations.
- Measure the impact. Systematic data on which populations are experiencing the greatest hardships and which industries are failing is essential to providing assistance. During the Ebola epidemic of 2014-2015, researchers used phone surveys in Sierra Leone and Liberia—building on the sample frames from existing surveys—to gather just-in-time information on the impacts of both ill health and aversion behavior on households and enterprises across the countries. Even as we monitor the health situation across and within countries, monitoring the economic situation and providing support to households in need can mitigate the most urgent needs.
The Ethiopian Herald May 12/2020
