Extending the social safety net — social responses to COVID-19 in the developing world

A recent report highlights the important steps that need to be taken to protect jobs and livelihoods during the public health response to COVID-19 in low- and middle-income countries.

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Image source: Daniel Lozano Valdes on Usplash

Difficulties in LMICs

In high-income countries (HICs), where a large proportion of the population work white-collar jobs, many people were able to work from home, so the losses to income during lockdown were less widespread. However, this is a completely different story in LMICs, who have been hit disproportionately hard by COVID-19 restrictions. A huge factor in this is the form that most work takes — in HICs, most people are employed in formal jobs — that is, jobs that have contracts, salaries and set working hours. However, in LMICs, it is estimated that 80 to 90% of employment is informal [2], working jobs such as cleaners, market sellers or independent producers. This means that while the workers are neither registered as working or paying taxes, they also have no safety net when they can no longer work. Moreover, even formal jobs in developing economies are much less compatible with social distancing, with the major markets focused on labour, construction and retail. Hence, if your job required you to go house-to-house, or work in a crowded market factory, the emergency response to the coronavirus crisis has completely cut off your source of income.

Social responses to COVID-19

Although, of course, lockdowns and quarantines were the only way to prevent the spread of COVID-19, many believe that if the government imposed these restrictive measures, it is also their responsibility to create policies that help people through the crisis. Several social safety nets will need to be put in place, both during the lockdown and after, as the population recovers from the disruption.

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Food rations are available in India [9]. Picture taken by Arun P James

Challenges and limitations

While these social responses will, of course, benefit the populations of LMICs hit the hardest by the COVID-19 pandemic, there are some substantial challenges that will need to be overcome. Firstly, there is an enormous difference between a policy and the implementation of a policy, something that the current report touches on but does not fully address. An example of where a good policy was not translated into successful implementation is in Peru. The Peruvian government acted extremely quickly to the pandemic, rapidly going into lockdown. One of their social responses was direct money transfers — however, this required people to have bank accounts, as well as access to online banking. Globally, only 69% of adults have a bank account, with only 30% being paid wages or receiving direct government [12]. This meant it was extremely difficult to get the money to a large proportion of the population, with the added complication of not having a pre-existing database from which to enroll people onto the programme. This resulted in people queuing into banks to receive money, decreasing social distancing and hence increasing the spread of the virus. Pakistan faced a different issue — their financial assistance packages for their poor required people in need to identify themselves to the relevant authorities, but this involves texting the existing social programme with their national identification number. This programme falls apart when you consider poverty may prevent people from having access to phones, or migrant workers may not have an identification number. Hence, a good policy in theory is only beneficial in practice if it can be successfully implemented.

Concluding remarks

With no end in sight for the current pandemic that is yet to peak in many LMICs, the social response to the crisis is something we will undoubtedly be considering for many months to come. The recent policy brief considers a host of different measures that can be taken to ensure that anyone in a country, no matter their employment status or location, can be helped through these difficult times. However, as early responses have shown, it’s not just as simple as handing out money to those in need. There needs to be a collective effort from both national and international governments to identify vulnerable people and successfully deliver support to them, without breaking many of the public health restrictions. The social safety net is in serious need of expansion, but we can only wait and see how this will play out on a global scale.

References

[1] François Gerard, Clément Imbert and Kate Orkin (2020). Social Protection Responses to the COVID-19 Crisis: Options for Developing Countries. Economics for Inclusive Prosperity. https://econfip.org/policy-brief/social-protection-response-to-the-covid-19-crisis-options-for-developing-countries/

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