While the Pacific and Papua New Guinea (PNG) have avoided some of the worst health impacts of the COVID-19 pandemic, the closure of international travel and lockdowns to curb the spread of COVID-19 have had serious impacts on employment, international labour mobility, and livelihoods across the region.
A new World Bank report, Pacific Island Countries in the era of COVID 19: Macroeconomic impacts and job prospects details the potential extent of job losses and labour market impacts in the region, while also suggesting how the Pacific may benefit from changing employment trends and other opportunities.
Fewer local jobs and sluggishness in new international opportunities are all taking their toll on labour markets in the seven Pacific countries examined in the report (Fiji, Kiribati, PNG, Samoa, Solomon Islands, Tonga and Vanuatu). Of these, countries that are more reliant on international tourism such as Fiji, Vanuatu and Samoa have borne the brunt of these effects, with tourism-related employment dropping by an estimated 64 percent in Vanuatu and unemployment claims in June 2020 nearly tripling the 2019 total in Fiji. Employment figures in countries where tourism plays a smaller role are also sobering, with job advertisements in PNG dropping by 76 percent between February and May 2020 as a result of lockdowns and travel restrictions. Flow-on effects to other industries, including retail and food services, together with reductions in commodity prices and remittance inflows, have added to this significant economic hardship across the region.
“The changes that we have seen in labour markets and employment across the Pacific are profound and are hitting the most vulnerable hardest – but importantly they are also leading families who would have been previously secure into vulnerable positions, especially workers in the tourism sector,” said Yasser El-Gammal, Practice Manager, Social Protection and Jobs, the World Bank
The report also highlights opportunities to mitigate the economic and employment shocks presented by the pandemic. These include prioritizing retraining and skill development of workers in affected industries, such as tourism, so they can move into sectors that require similar skill sets; promoting digital literacy skills to help Pacific islanders participate in remote working opportunities; and exploring new employment opportunities for low- and semi-skilled Pacific workers in Australia and New Zealand in the long term.
“Ultimately, workers from the Pacific will remain in demand in Australia, New Zealand, and elsewhere for a long time to come,” said report author Matthew Dornan, Senior Economist at the World Bank. “The various Pacific labour mobility schemes that are focused on employment in rural and regional areas are not only crucial to livelihoods and employment in the Pacific, but beneficial for employers and businesses in Australia and New Zealand.”
Of particular focus in the report is the need to support skills development and employment services in response to the crisis and as part of the economic recovery. This could include subsidizing the reskilling of workers, support for work-study and apprenticeship schemes, the provision of temporary wage subsidies for the unemployed, and an expansion of international labour mobility opportunities for Pacific Islanders. The latter can be facilitated by efforts to improve the employability of Pacific workers (e.g., through upskilling), reducing the costs associated with cross-border labour migration, and by improved marketing and relationship management with international employers. Recipient countries can also play a role through labour policies.
“Labour mobility requires close cooperation between countries,” said co-author Soonhwa Yi, Senior Economist at the World Bank. “While policy improvements from Pacific governments could help expand the overseas employment opportunities available to Pacific Islanders, receiving countries also need to ensure their migration and working visa policies support future demand for increased labour mobility.”
The report stresses that moderating the employment and livelihoods impacts of COVID-19 across the region requires supportive policy responses from governments. While support to affected populations is a priority, governments could also consider support to businesses, as has been provided in Tonga and PNG; safeguarding cash-flow through tax and import duty relief, as has been undertaken in PNG, Samoa and Solomon Islands; and exploring opportunities for direct cash transfers and social assistance to vulnerable populations.
“The COVID-19 pandemic also crisis highlights the urgency for Pacific countries to expand IT-related infrastructure and increase their engagement in the digital economy,” said Soonhwa Yi. “This would provide opportunities for workers in the digital economy and better position Pacific countries to export digital services across borders.”
Sustainable infrastructure can drive development and COVID-19 recovery
Zimbabwe has long struggled with crippling power outages, some of which can last up to 18 hours a day. The cuts have been especially hard on the country’s hospitals and clinics, forcing nurses to deliver babies by candlelight and doctors to postpone emergency surgeries.
But that is starting to change. Since 2017, Zimbabwe has installed solar panels atop more than 400 healthcare facilities, steadying power supplies and replacing expensive and polluting diesel-fired generators. The “Solar for Health” initiative is a prime example of the type of sustainable infrastructure development that will be vital to combating climate change, improving public services and driving the economic recovery from COVID-19.
So says a new report from the United Nations Environment Programme (UNEP). It urges planners and policymakers to take a more systematic approach to sustainable infrastructure, incorporating it into their long-term development plans and ensuring human-made systems work with natural ones.
“We can no longer use the business-as-usual approach to infrastructure, which is leading to ecological destruction and massive carbon dioxide emissions. Investments in sustainable infrastructure are not only environmentally sound but also bring economic and social benefits. Low-carbon, nature-positive infrastructure projects can help minimize the sector’s environmental footprint and offer a more sustainable, cost-effective path to closing the infrastructure gap,” said Inger Andersen, Executive Director of UNEP.
A source of emissions
Built infrastructure, which includes everything from office blocks to highways to power plants, is responsible for 70 per cent of all greenhouse gas emissions, mentions the report, the International Good Practice Principles for Sustainable Infrastructure. Poorly designed, infrastructure can also displace communities, endanger wildlife and weigh, often for decades, on public finances.
“There is an urgent need to include sustainable and climate resilient infrastructure as an integral part of green growth to deliver energy, water, and transportation solutions that will facilitate opportunity, connection, and sustainable growth,” said Ban Ki-moon, former United Nations Secretary-General and the President of the Global Green Growth Institute, a UNEP partner.”
Ban said the new report is a “very useful guiding framework for governments to lay the groundwork for a future where sustainable infrastructure is the only kind of infrastructure we know.”
To help countries reach that goal, the new UNEP report offers guiding principles for governments to integrate sustainability into their decision making on infrastructure. Among other things, it recommends that states align their infrastructure planning with the United Nations Sustainable Development Goals, humanity’s blueprint for a better future. It also urges them to minimize the environmental footprint of construction projects and meaningfully engage local communities in infrastructure decision making.
Return on investment
The report also highlighted the economic return on sustainable infrastructure, which includes renewable energy plants, eco-friendly public buildings and low-carbon transport. Investing in renewables and energy efficiency, it said, creates five times more jobs than investments in fossil fuels. Similarly, investing in resilient infrastructure in developing countries can create a return of US$4 for every US$1 invested, according to the World Bank.
In Ecuador, the government has turned to nature-based solutions to bolster water supplies to several major cities. By replanting trees, fencing off rivers and purchasing land for conservation, one region has revived watersheds that support more than 400,000 people.
In Singapore, which is aiming to have 80 per cent of its buildings certified as green by 2030, builders have used recycled materials to construct everything from schools to corporate offices. (The country was the first to unveil a building constructed entirely of recycled concrete aggregate and demolition waste.)
With COVID-19 sparking a global wave of stimulus spending, Ambroise Fayolle, Vice President of the European Investment Bank said the publication of the principles “is timely, reminding us all of the importance of building back better by tackling the long-term challenges we face.”
COVID-19 is reversing the important gains made over the last decade for women
Progress for women in work could be back at 2017 levels by the end of 2021 as a result of the COVID-19 pandemic, according to analysis conducted for PwC’s annual Women in Work Index, which measures female economic empowerment across 33 Organisation for Economic Cooperation and Development (OECD) countries*. The evidence emerging globally is that the damage from COVID-19 and government response and recovery policies, is disproportionately being felt by women.
For nine years, countries across the OECD* made consistent gains towards women’s economic empowerment. However, due to COVID-19 this trend will now be reversed, with the Index estimated to fall 2.1 points between 2019 and 2021, according to analysis undertaken for PwC’s annual Women in Work Index. The Index will not begin to recover until 2022, where it should gain back 0.8 points.
In order to undo the damage caused by COVID-19 to women in work – even by 2030, progress towards gender equality needs to be twice as fast as its historical rate.
Bhushan Sethi, Joint Global Leader, People and Organization at PwC, said:
“The setbacks that we are experiencing with COVID-19 in terms of the workforce tell a worrisome story. While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work. This has increased during the pandemic, and it is limiting women’s time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors – such as accomodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”
Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7% in 2019 to 7.4% in 2020). In the US, the female unemployment rate increased sharply from 4% in March 2020 to 16% in April 2020. The female unemployment rate stayed high for the remainder of 2020, ending the year in December 2020 at 6.7%, 3 percentage points higher than in December 2019. In the UK, the full impact of job losses from COVID-19 is yet to be realised due to job retention schemes, but furlough data shows that women are at greater risk of losing their jobs when these schemes come to an end. Between July and October 2020, a total of 15.3 million jobs were furloughed in the UK. For furloughed jobs for which gender was known, 52% of these were women’s jobs, despite women only making up 48% of the workforce.***
The disproportionate burden of unpaid childcare falls on women
Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During COVID-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men** – this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job.
This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy.
While some women may choose to leave the workforce temporarily due to COVID-19 with the intention to return post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects, and women will return to lower paid and lower skilled positions.
PwC Women in Work 2021 Index (performance prior to COVID-19 pandemic)
Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84%), has a small participation rate gap (5%), and even smaller female unemployment rate (3%).
Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.
New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment.
If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6 trillion per annum. The US, with one of the highest female unemployment rates, is expected to gain the most – as much as US$1.7 trillion per annum.
65% of Adults Think Race, Ethnicity or National Origin Affects Job Opportunities
A recent Ipsos-World Economic Forum survey has found that 65% of all adults believe that, in their country, someone’s race, ethnicity, or national origin influences their employment opportunities. When considering their own race, ethnicity, or national origin, more than one-third say it has impacted their personal employment opportunities.
The online survey was conducted between 22 January and 5 February 2021, among more than 20,000 adults in 27 countries. It also reveals that 60% of adults think that someone’s race, ethnicity, or national origin plays a role in education opportunities, access to housing, and access to social services.
As Black History Month in the United States draws to a close, awareness of the impacts of race, ethnicity and national origin on opportunities in life is exceptionally high. It follows a tumultuous year when the pandemic put inequality into the spotlight, and events in the US sparked international protests as long-simmering, systemic racial inequities came to the forefront.
Of those surveyed, 46% say the events of the past year have increased differences in opportunities as well as access to housing, education, employment and/or social services in their country. In comparison, 43% say the events have had no impact on differences and 12% say they have decreased differences.
About 60% of respondents in Latin America, Spain and South Africa, and nearly half in France, Italy, Malaysia, Japan, Sweden, Belgium and the US say recent events have increased race, ethnicity, or national origin-based differences in opportunities in their country, compared to only about one in three in Germany, Poland and Saudi Arabia, one in four in China, and one in seven in Russia.
Perceptions versus the reported personal experience of inequality also vary significantly in countries. Compared with the 27-country average for all four types of opportunities measured, several countries stand out.
- South Africa and India show high perception and high personal experience
- Japan, Belgium and France show high perception and low personal experience
- Malaysia shows low perception and high experience
- Russia, Poland, Sweden and Great Britain show low perception and low experience
- The employment opportunity gap and the private sector’s role in achieving a more equitable society is something businesses are increasingly keen to address. In 2020, between George Floyd’s death in May and the end of October, about one-third of Fortune 1000 companies made a public statement on, or a commitment to, racial equity. The private sector pledged a total of $66 billion towards racial justice initiatives.
- Yet, companies have repeatedly been reckoning with the gap between intentions and progress. There have been only 15 Black CEOs over the 62 years of Fortune 500’s existence. Currently, only 1% of Fortune 500 CEOs are black.
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