The World Bank has released steps countries, especially poor countries, can adopt to cushion negative impacts of Coronavirus pandemic (COVID-19) on their economies.
This is targeted governments and authorities across nations mulling partial or total reactivation of their economies, having been forced to shut down operations in most sectors the pandemic over past months.
According to analytical chapters released Tuesday by the World Bank Group’s Global Economic Prospects Report, “developing countries and the international community can take steps now to speed recovery after the worst of the health crisis has passed and blunt long-term adverse effects”
The Breton Woods institution advocated that “short-term response measures to address the health emergency and secure core public services will need to be accompanied by comprehensive policies to boost long-term growth, including by improving governance and business environments, and expanding and improving the results of investment in education and public health.”
“To make future economies more resilient, many countries will need systems that can build and retain more human and physical capital during the recovery – using policies that reflect and encourage the post-pandemic need for new types of jobs, businesses and governance systems.
“The scope and speed with which the COVID-19 pandemic and economic shutdowns have devastated the poor around the world are unprecedented in modern times. Current estimates show that 60 million people could be pushed into extreme poverty in 2020” the bank added.
David Malpass, the World Bank Group President, projected these estimates are likely to rise further with the reopening of advanced economies as the primary determinant.
The report further stated that “policy choices made today – including greater debt transparency to invite new investment, faster advances in digital connectivity, and a major expansion of cash safety nets for the poor – will help limit the damage and build a stronger recovery” the World Bank suggested.
“The financing and building of productive infrastructure are among the hardest-to-solve development challenges in the post-pandemic recovery. We need to see measures to speed litigation and the resolution of bankruptcies and reform the costly subsidies, monopolies and protected state-owned enterprises that have slowed development.”
According to WB, “the long-term, the pandemic will leave lasting damage through multiple channels, including lower investment; erosion of physical and human capital due to closure of businesses and loss of schooling and jobs; and a retreat from global trade and supply linkages. These effects will lower potential output – the output an economy can sustain at full employment and capacity – and labour productivity well into the future.”
“Policies to rebuild both in the short and long-term entail strengthening health services and putting in place very targeted stimulus measures to help reignite growth. This includes efforts to maintain the private sector and get money directly to people so that we may see a quicker return to business creation after this pandemic has passed” WB said.
The analysis has been released ahead of the June 8 issuance of the full report, which will include the Bank Group’s latest forecasts for the global economy.
