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Protect lives, mitigate future shocks and recover better

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A healthcare worker checks the temperature of a patient at a hospital in Nonthaburi Province, Thailand. UN Women/Pathumporn Thongking

Over the course of 2020 thus far, the coronavirus has taken hundreds of thousands of lives, infected millions of people, and wreaked socio-economic, humanitarian and human rights havoc, the United Nations said in a new report released on Wednesday.

According to the September update of the UN Comprehensive Response to COVID-19, no country has been spared; no population left unscathed. 

Among other things, the update outlines the steps needed to save lives, protect societies and recover better while pointing the way to addressing future shocks, above all from climate change, and overcoming the universal inequities.

Three-point response

UN Secretary-General António Guterres has often said that the pandemic is a human crisis that has laid bare severe and systemic inequalities.  

“No country has been spared. No population group remains unscathed. Nobody is immune to its impacts”, the report spelled out.

To address this, the UN is pursuing a three-point comprehensive response focused on health, safeguarding lives and livelihoods, and addressing underlying vulnerabilities to rebuild a more resilient, inclusive and sustainable world.

Health first

The update revealed that the UN system led the global health response early on, providing life-saving humanitarian assistance to the most vulnerable, establishing rapid responses to the socio-economic impact and laying out a broad policy agenda.

Solid science, reliable data, and analysis are critical for policy- and decision-making, especially for the tough choices required during a pandemic, according to the report. 

To help create a knowledge base and provide support to national policymakers, the UN has also issued a series of policy brief that examines the pandemic’s diverse impacts and offers relevant information and advice. 

Containing the virus

The most urgent course of action in dealing with COVID -19 has been to suppress transmission of the virus, through detecting, testing, isolating and caring for those affected. 

This requires physical distancing, fact- and science-based public information, expanded testing, increased health-care facility capacities, supporting health-care workers, and ensuring adequate supplies. 

Some countries can or have already achieved these conditions with their own resources but developing countries continue to need considerable support, the report noted.

Universal access

The update shone a spotlight on the need for the biggest public health effort in human history.

That means a vaccine, diagnostics and treatment for everyone, everywhere. 

At the Global Vaccine Summit in June, the UN chief spelled out, “A COVID-19 vaccine must be seen as a global public good”.

Battling twin crises

As climate change is not on hold, recovery from COVID-19 must go hand-in hand with climate action.

And addressing both simultaneously requires a response stronger than any seen before, upheld the report.

It saw recovery as an opportunity to address the fragilities laid bare by the virus, including the climate crisis.

Moreover, it outlined the steps needed to move forward, such as decarbonizing transport, buildings and energy sectors; transitioning away from fossil fuels; and creating jobs to build resilient and sustainable infrastructures. 

Sustaining the response

As the world is still in the acute phase of the pandemic, the UN update maintained the importance of sustained political leadership, unprecedented levels of funding, and extraordinary solidarity between and within countries to recover. 

The Organization will continue to consult with Member States and all partners on how best to support these efforts over the long term.

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Finance

Albania Has Opportunity to Build a More Sustainable Growth Model

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Albania’s economy, like other countries in the region, is recovering faster than expected after the historic recession created by the COVID-19 pandemic. Following the contraction of the economy by 4 percent in 2020, GDP growth is projected to reach 7.2 percent in 2021, one of the highest among Western Balkans countries, says the latest edition of the Western Balkans Regular Economic Report, Greening the Recovery.

The strong recovery is supported by consumption, tourism, and construction. Going forward, growth is expected to moderate at 3.8 percent in 2022 and 3.7 percent in 2023.

Albania’s poverty rate is projected to fall below its pre-pandemic level by end-2021. Employment and labor force participation is also recovering, albeit with a lag, and real wages are increasing.

The recovery is contributing to fiscal revenue collection. Macroeconomic policies have supported the recovery, but higher spending has led to a further rise in the debt-to-GDP ratio. Economic uncertainty remains high, as the COVID-19 pandemic continues worldwide.

“The Albanian economy has shown encouraging signs of recovery in 2021,” said Emanuel Salinas, World Bank Country Manager for Albania. “As growth rebounds, Albania has the opportunity to strengthen the sustainability of its economic model and implement reforms that further support sustainable and shared growth, while preserving macroeconomic stability.”

The report shows that the Western Balkans region has improved significantly, with GDP growth now projected to reach 5.9 percent in 2021, after a 3.1 percent contraction in 2020. Growth in the region is projected at 4.1 percent in 2022 and 3.8 percent in 2023.

The poverty rate for the region is projected to resume its pre-pandemic downward trend and fall by around 1 percentage point to 20.3 percent, close to its 2019 level.

The regionwide recovery is due to strength in both domestic and external demand. A sharp rebound in domestic consumption and in travel across Europe helped boost remittances as well as tourism inflows during the 2021 peak summer season. A strong recovery in advanced economies also provided a boost to demand for the region’s exports.

However, the recovery remains fragile. Early warning signals from the labor market call for close policy attention. Job losses from the recession and its aftermath have disproportionately affected women and youth, which may set back efforts to raise the region’s perennially low rates of labor force participation. Youth unemployment in the region rose to 37.7 percent in 2021, up 5.4 percentage points from June 2020, further worsening youth employment prospects.

“As the Western Balkans countries look to a post-pandemic future, their policy approach will need to focus on addressing key impediments to job creation and economic transformation, including green transition,” said Linda Van Gelder, World Bank Country Director for the Western Balkans. “All six countries would benefit from reforms in the business environment, governance, and digitalization, which would contribute to growth and close the gap with EU countries.”

The report also looks at the macro-fiscal challenges and drivers of greening the region’s growth. The Western Balkans now find themselves at a key decision point regarding the impending green transition.

Global strides toward climate action are causing fundamental changes in society. Consumer and investor preferences are shifting, green technologies and new business models are disrupting more markets, and green policies are reshaping economic landscapes. As such, greening a country’s economy is becoming a decisive factor in international competitiveness and the ability to attract international finance and investments.

The Western Balkans are no exception. Still characterized by a development model tilted toward familiar brown industries, moving toward a green growth pathway is far from easy, especially in the short term. Yet, the green transition offers significant opportunities for the Western Balkans – including closer integration into Euro-centric global value chains and access to significant EU resources to help fund a green transition.

Effectively managing this green transition, including the many policy tradeoffs, will need to be a core focus of policy attention for the Western Balkans in the years ahead.

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Human Rights

Only ‘real equality’ can end vicious cycle of poverty

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Children play outside a metal polishing workshop in a slum in Uttar Pradesh, India. © UNICEF/Niklas Halle'n

Although poverty and privilege “continue to reproduce themselves in vicious cycles”, it is possible to break the chain and shift the paradigm, an independent UN human rights expert told the General Assembly on Wednesday. 

Presenting his reportThe persistence of poverty: how real equality can break the vicious cycle, Special Rapporteur on extreme poverty and human rights, Olivier De Shutter, said that “with political will”, it is possible to end centuries of entrenched inequality and “move from fate to opportunity”.  

Early investment 

“Investing in early childhood, promoting inclusive education, given young adults a basic income financed through inheritance taxes, and combating anti-poor discrimination are the key ingredients needed to break the cycles of advantage and disadvantage”, Mr. De Shutter said in his statement.  

Acknowledging that many countries pride themselves on ensuring high levels of social mobility, the human rights expert stated that “the truth is that the persistence of privilege at the top, and deprivation at the bottom, are all too commonplace.” 

“The top 10 percent of people living in OECD countries control 52 percent of total net wealth, while the bottom 60 percent own just over 12 percent, condemning the poor to a lifetime of poverty”, he said. According to the report, based on data from countries which are part of the Organization for Economic Cooperation and Development (OECD), it takes four to five generations for children in low-income households to reach the mean income in their country. In emerging countries such as Brazil, Colombia or South Africa, it can take up to nine or even more generations.  

Tougher with time 

Observing that children born in disadvantaged families were denied equal opportunity, the Special Rapporteur examined the channels through which poverty is perpetuated, in the areas of health, housing, education and employment. 

“Children born in poor families have less access to healthcare, decent housing, quality education and employment than those in better-off households”, De Shutter said. “This dramatically reduces their chances of breaking free from the poverty trap”.  

Describing the outcomes as “appalling”, the Rapporteur added that children born in a family experiencing poverty are more than three times as likely to be poor, aged 30, than those who were never poor. 

Poverty costs 

The UN rights expert reminded that child poverty is not only “morally unconscionable and a human rights violation”, but also expensive. “In the United States, child poverty costs over one trillion dollars annually, or 5.4% of its GDP, but for each dollar invested on reducing it, seven dollars would be saved,” said the expert.  

Calling for and end to the myth that inequality is an incentive that encourages people to work harder, Mr. De Shutter said that the facts point to the exact opposite: “Inequality lowers social mobility and entrenches advantage and disadvantage over decades. When we fetishize merit, we stigmatize those in poverty or with low incomes, and blame them for their own condition”.  

Call for action 

Stressing that “no child should be penalized for being born in poverty” in mind, and stating that, in fact, “poverty is a failure not of the individual, but of society”, Mr. De Shutter called on governments to act now, “before another generation is condemned to the same fate as their parents”.  

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Finance

Montenegro on Course for Stronger Economic Recovery in 2021

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The Western Balkans region is rebounding from the COVID-19-induced recession of 2020, thanks to a faster-than-expected recovery in 2021, says the latest edition of the Western Balkans Regular Economic Report, Greening the Recovery.

The outlook for the region has improved significantly, with GDP growth now projected to reach 5.9 percent in 2021, after a 3.1 percent contraction in 2020. Growth in the region is projected at 4.1 percent in 2022 and 3.8 percent in 2023.

Driven by a rapid recovery in tourism, Montenegro’s economy is projected to rebound strongly by an estimated 10.8 percent in 2021, the highest rate among the six Western Balkan countries. Strong peak summer season has supported a rebound in tourism revenues, which are likely to reach close to 75 percent of their 2019 levels, from 55 percent previously estimated.

The rebound of economic activity has boosted government revenues, which coupled with careful fiscal management have led to a reduction in fiscal deficit from 11 percent of GDP in 2020 to an estimated 4 percent in 2021. Maintaining fiscal prudence in the medium term will be critical, as uncertainties loom.

“The economic crisis brought on by the COVID-19 pandemic continues to be a source of uncertainty, but also presents an opportunity for Montenegro to ensure a resilient, inclusive, and green post-pandemic recovery,” says Christopher Sheldon, World Bank Country Manager for Bosnia and Herzegovina and Montenegro. “The World Bank is committed to helping Montenegro implement reforms that can help ensure macroeconomic stability, create economic opportunities, and spur strong private-sector led growth”.

The report finds that unemployment in Montenegro remains high as the recovery has not ignited the labor market yet, which limits the pace of resumed poverty reduction. Poverty is projected to decline slowly in 2021, but it remains higher than its 2019 level.

The poverty rate for the region is projected to resume its pre-pandemic downward trend and fall by around 1 percentage point to 20.3 percent, close to its 2019 level.

The regionwide recovery is due to strength in both domestic and external demand. A sharp rebound in domestic consumption and in travel across Europe helped boost remittances as well as tourism inflows during the 2021 peak summer season. A strong recovery in advanced economies also provided a boost to demand for the region’s exports.

However, the recovery remains fragile. Early warning signals from the labor market call for close policy attention. Job losses from the recession and its aftermath have disproportionately affected women and youth, which may set back efforts to raise the region’s perennially low rates of labor force participation. Youth unemployment rose to 37.7 percent in 2021, up 5.4 percentage points from June 2020, further worsening youth employment prospects.

“As the Western Balkans countries look to a post-pandemic future, their policy approach will need to focus on addressing key impediments to job creation and economic transformation, including green transition,” said Linda Van Gelder, World Bank Country Director for the Western Balkans. “All six countries would benefit from reforms in the business environment, governance, and digitalization, which would contribute to growth and close the gap with EU countries.”

The report also looks at the macro-fiscal challenges and drivers of greening the region’s growth. The Western Balkans now find themselves at a key decision point regarding the impending green transition.

Global strides toward climate action are causing fundamental changes in society. Consumer and investor preferences are shifting, green technologies and new business models are disrupting more markets, and green policies are reshaping economic landscapes. As such, greening a country’s economy is becoming a decisive factor in international competitiveness and the ability to attract international finance and investments.

The Western Balkans are no exception. Still characterized by a development model tilted toward familiar brown industries, moving toward a green growth pathway is far from easy, especially in the short term. Yet, the green transition offers significant opportunities for the Western Balkans – including closer integration into Euro-centric global value chains and access to significant EU resources to help fund a green transition.

Effectively managing this green transition, including the many policy tradeoffs, will need to be a core focus of policy attention for the Western Balkans in the years ahead.

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