August 2020

Identifying, understanding and combating complex inequality

Inequality. Racism. Oppression. Resistance. These are the words penetrating news media across the United States as the country wages war against systemic patterns of disparity.

From peaceful protests to violent clashes, society is slowly breathing life into the thought that there are powerful forces, rooted in history, that are actively suppressing certain members of the population. The pursuit of equity disconnected from race, ethnicity, class and gender is now at the forefront of society, leaving one question in the minds of many: “How can we do better?”

The answer partially lies in understanding invisible, deeply embedded injustices that are common practice in the United States. Research shows there are compounding challenges facing marginalized communities. These hurdles are multifaceted and cannot be distilled down to single data points. This is the basis of complex inequality, a concept being explored at UNM’s Institute for the Study of “Race” and Social Justice. "Race" is intentionally in quotes to underscore its nature as a socially constructed category of social status in particular historical contexts).

The Institute consists of research and academic programs. It’s made up of a consortium of scholars from many colleges, departments and programs at UNM, who started the first race and social justice interdisciplinary graduate and undergraduate certificate in the country. They have been compiling information, assessing data and writing reports on complex inequality for more than a decade. Their findings show that inequities are so deeply embedded in higher education that they have become invisible; like a splinter left in a finger so long that it becomes indiscernible to the naked eye, but still causes pain.

Complex inequality: recognizing the experience of marginality is layered and must be viewed through a lens that captures multiple oppressions and measurements (i.e. race, gender and class) instead of singular data points (i.e. race-alone or class-alone).

Inequality cannot be reduced to numbers

The recent protests against race-gender profiling have largely centered on police brutality and unfair assumptions about people based on the color of their skin. The spark igniting the fire was a video of a man aggressively restrained by police, who ultimately died as a result of the encounter. But this unrest is rooted in decades of disparities towards minorities, particularly Blacks, Latinx, people of color and Native American communities. Those inequalities include measures in the higher education system that attempts to reduce these marginalized populations to formulaic response.

“New Mexico institutions of higher education make the assumption that federal financial aid (PELL status) is a proxy for at-risk youth and can identify students who will have a harder time graduating,” said Nancy López, professor of sociology at UNM and director of the Institute for the Study of “Race” and Social Justice. “The logic is that if we reward institutions that are graduating more PELL status students, then we’re addressing racialized inequities.”

However, López and her colleagues conducted research that shows income is not a substitution for race or gender gaps in education. In fact, in the first empirical intersectional study of complex inequalities in higher education, they found major and statistically significant disparities in graduation rates among marginalized students. These gaps remain unseen in most reporting that relies solely on outcomes assessing class-alone, gender-alone, or race-alone.

“Color-blind, gender-blind, class-blind data is not enough,” said López. “A critical race intersectional perspective, equity-based policy and ethical institutional accountability are key to dismantling inequities in higher education.”

“Intersectionality is a way of understanding and analyzing complexity in the world, in people, and in human experiences. The events and conditions of social and political life and the self can seldom be understood as shaped by one factor. They are shaped by many factors in diverse and mutually influencing ways. When it comes to social inequality, people’s lives and the organization of power in a given society are better understood as being shaped not by a single axis of social division, be it race or gender or class, but by many axes that work together and influence each other.…People use intersectionality as an analytic tool to solve problems that they or others around them face.” – Collins, P. H., and S. Bilge. 2016. Intersectionality. Malden, MA: Polity Press.

Critical Race Intersectional Perspective

People are multifaceted and complex, with varying backgrounds, outlooks, beliefs, cultures and values. Making inferences about lived experiences based singularly on income levels ignores comprehensive dynamics that are woven together to create the fabric of humankind.

In higher education, the single-dimension use of income as a predeterminant of graduation likelihood gives a similarly narrow outlook. That’s why López is advocating the use of a critical race intersectional perspective, or looking at the whole picture of a person.

“It is important to understand that even if a group has the same odds of graduating, we should never assume that they have the same lived experiences,” she explained.  

For example, her research shows that a Native American low-income man is 45 percent less likely to graduate than a high-income white woman. In comparison, low-income white women were only 14 percent less likely to graduate than high-income white women. These statistics provide a more comprehensive look at race, gender and class, and place students in what López calls a “social location.” A person’s social location is a robust assessment of the inequities they face. It can be used as a framework for understanding how aspects like gender identity, race, class, sexuality, physical appearance and other factors. might combine to result in unique disparities during their journey through higher education.

“We need to include measures of structural disadvantage by examining race, gender, and income as simultaneous social statuses in our analysis of social inequalities,” López said. “We must focus on solutions and ethical accountability.”

Social Policy Solutions for Equity and Justice

Armed with an intersectional perspective, campus communities can begin re-writing how institutions support students coming from marginalized communities. López says the first step is to push beyond compliance-driven reports.

“When we create reports for the federal government looking at equity, we often stop at compliance,” López explained. “Compliance only wants us to report graduation rates just by race or just by gender or just by income. We need to not just look at how to meet those compliance standards, but also start asking what other information we need in order to address complex inequalities.”

On more personal levels, López urges the campus community to look at their own social spheres and ask the question: What complex inequalities are happening here that we need to make visible?

“Ask yourself, what are two or three things I can do to make sure we are not ignoring these complex inequalities, but creating a convergent space for others who are also interested and passionate about working on these issues.”

“A critical race intersectionality is essential,” López concluded. “And it’s changing the conversation, policy and practice of institutions, policymakers and community-based organizations in the United States and abroad.”

Note from the author:

As a middle-class white woman, writing an article of this nature is enlightening, humbling and devastating. I can do my best to describe these actions that are causing deep wounds in society, but will never fully understand the pain our marginalized communities face every day. My thanks to Dr. Nancy López for her patience in explaining these concepts, sharing her lived experiences, and helping guide me to a better understanding of the invisible fractures crippling our desire for equality.

By : Rachel Whitt

Date : July 10, 2020

Source : The University of New Mexico

http://news.unm.edu/news/identifying-understanding-and-combatting-complex-inequality 

What fate for the Venezuelan migrants stranded in Peru?

Peru and other countries of destination, have a moral duty towards vulnerable migrants and refugees.

In the fight against COVID-19, Latin America presents a set of important challenges: underfunded healthcare systems, largely informal labor markets, extreme poverty and vulnerability, and a human displacement crisis that has forced almost 5 million Venezuelans into exile.

Peru hosted close to 1 million Venezuelan citizens as it declared a State of Emergency on 16 March, closing international borders and imposing compulsory social isolation. This measure was extended four times, and lasted until 30 June (the lockdown is on-going in seven regions with high infection rates).

Undoubtedly, the state of emergency has had a negative impact on the Peruvian population, and especially on all those employed informally (the informal sector makes up over 70% of Peru’s economy). However, the burden carried by Venezuelan immigrants, or refugees, is even more severe due to their informal working conditions, precarious legal status and lack of social networks.

In a recent study conducted at the Universidad del Pacífico, we found that 93% of our sample works informally. Furthermore, Peru initially gave out close to 500,000 temporary residence permits (PTP), however, these permits expire after a year, leaving Venezuelans with uncertain options for further regularization. Out of 500,000 asylum applications, only a minuscule fraction has been decided. What is worse is that less than 100,000 identification documents have been given out to Venezuelan asylum seekers and less than 1000 to refugees.

We met Andrith, a former police officer, his partner Patricia, and their 3-year-old son at the border between Ecuador and Peru in April of 2019. Having walked and hitchhiked from Venezuela, they arrived with no passports and extremely limited financial resources. When the lockdown was declared, Andrith was selling bracelets on buses, and was completely taken by surprise: “It caught us off guard. We live from day to day. We had nothing saved up… These weeks have been very hard. There have been days, when we didn’t have anything to eat.”

Despite initial public support for the emergency measures, including the support of Venezuelans, high levels of poverty and vulnerability made compliance extremely difficult. According to a survey conducted by Equilibrium CenDe on 23 March, a week into the lockdown, 37% of Venezuelan migrants declared that their homes had run out of food.

In a second survey, conducted on 18 April, only 5% of migrants had enough money to buy the food their household required. The same survey conducted on 15 June, showed that 43% had lost their jobs.

According to an on-going tracking study on socio-economic integration of Venezuelan immigrants we are conducting at the Universidad del Pacífico, together with the Interamerican Development Bank (IADB), about 10% went hungry during the quarantine.

Furthermore, access to public services, including healthcare, is very limited and migrants lack social support networks. Just prior to the COVID-19 outbreak, three out of four interviewees were concerned about not having access to the public healthcare system. Importantly, due to irregular or precarious legal status, 65% of our tracking cohort feared seeking medical assistance in the case of falling ill.

There have also been reports of Venezuelans who, when contacting local health facilities to request testing, were denied attention because they lacked a specific form of residency (carné de extranjería). Excluding the migrant and refugee population from the country's public healthcare system, is not only discriminatory, but likely undermines public health efforts to stem the spread of COVID-19.

By the day, the despair of Venezuelan immigrants in Peru increases. Almost half of them now fear eviction, most of them with nowhere else to go to. According to our tracking-study, 95% have not received any institutional help since the beginning of the lock-down.

Government measures to provide social and economic support for Peruvian families in vulnerable conditions did not include immigrants and refugees. Rather, the Minister of Foreign Affairs, appealed to the financial support from international organizations to help migrants and refugees in Peru, but without any serious efforts to efficiently coordinate international help.

At the time of writing, and after having all their documents stolen, including the precarious certification of having initiated the asylum process in Peru, Andrith and Patricia had embarked on the dangerous journey back home. They decided to go just as they came, crossing Ecuador and Colombia , on foot and without any food or money – despite the lock-down, three militarized borders and the collapsing health system in Venezuela.

After six weeks they finally reached the border city of Cucuta in Colombia. Given Venezuela’s strict entry restrictions, even for nationals, it is not clear when they will be able to return home.

The COVID-19 crisis will likely constitute an additional factor of forced displacement from Venezuela and lead to new migratory flows across the region. Once borders reopen, it is crucial that countries facilitate legal access and residence to Venezuelan immigrants and asylum seekers.

In these unprecedented times, supporting migrants and refugees is not only a moral duty of Peru and other countries of destination, but also essential if we are to successfully mitigate the transmission of the virus.

By : Marta Luzes and Feline Freier

Date : July 15, 2020

Source : Open Democracy

https://www.opendemocracy.net/en/pandemic-border/what-fate-venezuelan-migrants-stranded-peru/

India’s lockdown locks out the poor

Indian Prime Minister Narendra Modi gave India’s nearly 1.4 billion people just four hours’ notice that a total national lockdown would be imposed to curb the spread of the COVID-19 pandemic on 24 March. Neither preparation nor provision was made for the needs of workers in the informal sector (90 per cent of India’s workforce), nor means for them to return to their distant homes.

That lockdown set off the largest mass migration in the country since the traumatic events of the partition of 1947. Although India is far from being a ‘failed state’, its treatment of its most vulnerable citizens is evidence of ‘state failure’ that appears to be a direct consequence of Prime Minister Modi’s leadership style.

Much reporting has shown thousands of people surging around train stations such as the one in Mumbai. They were desperately trying to board trains headed to their native villages after suddenly finding themselves without work in the city.

Thousands of others, without money or transportation, set out on foot to cover the hundreds or even thousands of kilometres to their rural homes. Abandoned by their employers and devoid of any help from state and national governments, many say they are never coming back.

This lack of preparation once again reveals the blind spots of the present government — particularly its lack of understanding of the informal sector and the marginal sections of Indian society. Just like the demonetisation of high-value rupee notes in 2016, and the attempted ban on sale and consumption of beef in 2017, the lockdown decision was taken without fully understanding — or caring about — its implications for people living on the margins.

It is also reflects Modi’s penchant for drastic, bold and symbolic gestures, which was duly praised by a sycophantic media as his ‘surgical strike’ on the virus. Modi asked people for three weeks’ worth of ‘sacrifice’ and encouraged gestures of gratitude such as lighting candles, clapping to chase away the evil demon of the virus, or asking the air force to drop rose petals on health workers to thank them for their selfless work.

After continuing for ten weeks, the lockdown exerted a heavy cost on the lives of India’s poor and yet, there is no indication of the curve flattening. Tired of waiting for government help, many stranded migrant workers moved back to their rural hometowns in droves — threatening to carry the disease to the yet unaffected hinterland. By the beginning of June, the government then decided to gradually unlock the economy, leaving many traumatised workers in a dilemma over whether to retrace their steps back to the cities.

Why was India, with only the state of Kerala being a shining exception, relatively unprepared for the arrival of the virus?

One explanation is that Modi and his all-powerful Home Minister Amit Shah were looking elsewhere in the crucial weeks in February and March. Early on, there were widespread protests against the imposition of a Citizenship Amendment Act, widely seen as discriminatory against India’s large Muslim minority. Then there were the big celebrations of India’s Republic Day on 26 January. There were crucial elections in the capital territory of Delhi in early February. Soon after, there were preparations for a rousing reception for US President Donald Trump in Ahmedabad and New Delhi.

All of this demonstrates the sharp contradiction between Modi’s continuous efforts to centralise power, decision-making and the media spotlight in New Delhi, while simultaneously pushing the responsibility and burden of dealing with the pandemic’s social realities onto state and local authorities and the valiant local NGOs.

In early April, a centrally-determined list of containment zones classified by the severity of virus spread was announced. It drew complaints from various states that had better and more fine-grained information about local spread of COVID-19. It was only by the second week of May that the states were granted the power to determine the classification of zones.

Weeks after the lockdown was imposed, when special trains for migrant workers were finally authorised, the migrants themselves (their meagre savings long since expended on food) were initially asked to pay the cost of returning them to their states of origin. This sharply contrasted with the proposed treatment of overseas Indians, some of whom were flown home without charge — a policy later reversed following public outcry.

What is perhaps most astonishing in the hands-off approach of the government in New Delhi is that at the outset of the pandemic, Modi established PM CARES — an entirely new relief fund not subject to public scrutiny or government audit — which has received donations of over Rs 38 billion (US$500 million). Although it was announced in mid-May that Rs 10 billion (US$131.6 million) would be used to assist distressed migrant workers, it is difficult to find evidence of actual disbursement.

The global pandemic has been a major exogenous shock for every country. But what might be the implications for India? When the Black Death scythed the population of Europe in the late Middle Ages, the long-term effects were profound. Labour became scarce, wages rose rapidly, land became relatively devalued and rural social structures were disrupted. Technical innovations and capital-intensive developments took place in cities.

The current pandemic shock might not have such wide-ranging nor long-lasting consequences. Still, it is clear that restarting India’s economy will require tens of thousands of badly scarred workers to return to the cities. Employers and governments will have to offer significant incentives to induce them to retrace the bitter journey back to the cities.

Mandar Oak is Associate Professor in Economics at the University of Adelaide.

Peter Mayer is Associate Professor and Visiting Research Fellow in Politics and International Studies at the University of Adelaide.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.

By : Mandar Oak and Peter Mayer, University of Adelaide

Date : June 20, 2020

Source : East Asia Forum

https://www.eastasiaforum.org/2020/06/20/indias-lockdown-locks-out-the-poor/

The inequality of telework: 5 studies you should know about

With confirmed cases of COVID-19 — the disease caused by a novel coronavirus — on the rise, organizations worldwide are encouraging or mandating that their employees telework.

Federal agencies in the U.S. are prepping plans for hundreds of thousands of employees to work from home, if needed. Big tech firms like Amazon, Google and Facebook are asking some employees to telework. Universities around the country have switched to online-only classes.

For many office workers, it’s not hard to do their jobs with a laptop at the kitchen table. But 34% of U.S. employees work in fields such as food preparation, retail sales, production, construction, maintenance and agriculture, according to data from the U.S. Bureau of Labor Statistics.

Global job and revenue losses underscore the ability of some industries over others to support work-from-home arrangements. Air travel, for example, relies on employees being there — think pilots, flight attendants and airplane mechanics.

Norwegian Air will cancel 3,000 flights — 15% of the airline’s flight volume — over the coming weeks, the company announced March 10. A leading business travel trade association estimates the industry could see worldwide revenue losses of $820 billion due to flagging international business travel. Travel agencies in Atlanta and Los Angeles have laid off staff, while some 145 drivers at the Port of Los Angeles have lost their jobs, according to The Washington Post. Cargo volume at the port fell 23% in February compared with last year.

So who gets to telework? People who work mostly online. And people with more education. Before the coronavirus outbreaks, 12% of high school graduates over age 25 without any college worked from home on a typical day, according to the 2018 release of a nationally representative survey the BLS has conducted continuously since 2003. Compare that with 37% with at least a bachelor’s degree, and 42% of workers with an advanced degree.

Then there is the fact that millions of mostly rural Americans don’t have reliable home internet access — occupations aside, working from home doesn’t work without decent internet.

More than 21 million Americans lack advanced broadband internet access, according to the latest report from the U.S. Federal Communications Commission. “Moreover, the majority of those gaining access to such connections, approximately 4.3 million, are located in rural America,” according to the report.

The rural-urban broadband gap may be narrowing, but it remains stark. Roughly a quarter of rural Americans and a third of Americans in Tribal lands don’t have advanced broadband coverage — compared with less than 2% of people in urban areas, according to the report.

The FCC defines “advanced” broadband as offering download speeds of at least 25 megabits per second. Average download speed in the U.S. for fixed broadband is about 96 mbps, according to internet speed test firm Ookla, based on more than 115 million speed tests.

The ability to get broadband and having broadband are two different things. A Pew Research Center survey, released June 2019 based on a nationally representative sample of more than 1,500 adults, estimates that 73% of Americans have broadband at home — meaning more than a quarter of Americans don’t have home broadband. More than 90% of households making over $75,000 have broadband at home, compared with just 56% of households making less than $30,000 yearly, according to Pew. Median household income is $60,000 in urban areas and $44,000 in rural areas, according to Census data.

The five studies that follow offer more insight on who has the opportunity to telework, how telework can help prevent the spread of respiratory illness, key concepts related to digital inequality, and more.

Paid Leave and Access to Telework as Work Attendance Determinants During Acute Respiratory Illness, United States, 2017-2018

Faruque Ahmed, Sara Kim, Mary Patricia Nowalk, Jennifer P. King, Jeffrey J. VanWormer, Manjusha Gaglani, Richard K. Zimmerman, Todd Bear, Michael L. Jackson, Lisa A. Jackson, Emily Martin, Caroline Cheng, Brendan Flannery, Jessie R. Chung and Amra Uzicanin. Emerging Infectious Diseases, January 2020.

The authors analyzed work attendance for 1,374 people aged 19 to 64 years who got the flu during the 2017-2018 flu season in six cities — Ann Arbor, Detroit, Pittsburgh and Seattle as well as Temple, Texas and Marshfield, Wisconsin.

People with the flu are most infectious during the first three days they’re sick, according to the authors. During those first three days, 28% of people in the authors’ sample who had a telework option didn’t work at all, compared with 41% of people without the option — indicating that people who worked remotely did so while sick.

Those without the option to telework were more likely to have taken time off, and those with paid leave — including sick leave and vacation time — were less likely to work during the first three days they were sick.

People who could telework and had paid leave more often were full-time, salaried workers, had higher levels of education and were “more likely to be encouraged by their employer to go home if they had influenza-like symptoms at work,” the authors write.

The gist: “We have documented that workplace cultures that encourage employees to refrain from coming to work when ill may play a crucial role in keeping workers away from the workplace when sick.”

Work–Life Flexibility for Whom? Occupational Status and Work-Life Inequality in Upper, Middle, and Lower Level Jobs

Ellen Ernst Kossek and Brenda A. Lautsch. Academy of Management Annals, May 2017.

The authors examine 186 peer-reviewed articles on work-life flexibility around the world, including in telework policies. They note that in labor research “flexibility” means the ability to deviate from traditional 9-to-5 office work. Flexibility generally means that employees have some say over how, when and where they do their jobs.

“People may have limited choices and many constraints on the options available to manage their personal lives,” the authors write, adding that “organizations can benefit society and improve employee well-being by designing work to provide individuals within and across job groups some control over how work is enacted and reconciled with the rest of life.”

The gist: “Flexibility to control work location is rarely available for lower level jobs but benefits middle- and upper level employees, provided that individuals are able to control separation from work when desired and self-regulate complexity.”

Employment and Compliance with Pandemic Influenza Mitigation Recommendations

Kelly D. Blake, Robert J. Blendon and Kasisomayajula Viswanath. Emerging Infectious Diseases, February 2010.

The authors analyzed interviews they conducted by phone with a nationally representative sample of roughly 1,100 full- or part-time workers in September and October 2006, to gauge Americans’ ability and willingness to follow public health recommendations at home, school and work.

Roughly equal numbers of participants had only finished high school, had some college but no degree, or had a college or advanced degree. Two-thirds were white, 14% were Hispanic and 11% were black. Nearly a third had annual household incomes greater than $75,000. Three-quarters of people in the sample lived in an urban setting while about a quarter lived in a rural area.

Some 69% of respondents said they would not be able to work from home for a month if there were a serious outbreak of the flu, and 42% said they would not be paid if kept away from the workplace for that length of time. More than a quarter said someone in their household would lose a job or business if they had to stay home for seven to 10 days and avoid contact with the outside world.

“Job insecurity, whether real or perceived, is a real consideration for many working adults,” the authors write. “U.S. health authorities recommend that to prepare for a pandemic, businesses should establish policies for non-punitive liberal leave and flexible worksite accommodations.”

The gist: “We found that inability to work from home, lack of paid sick leave, and income are associated with working adults’ ability to comply and should be major targets for workplace interventions in the event of a serious outbreak.”

Acting and Reacting: Work/Life Accommodation and Blue-Collar Workers

Jaime E. Bochantin and Renee L. Cowan. International Journal of Business Communication, March 2014.

Participants in this research were skilled workers, like plumbers and electricians, and unskilled workers, like custodians, drawn from a large company in an unnamed state in the southern U.S. The authors interviewed a small sample of workers — 11 skilled and 15 unskilled — for anecdotes about how these workers navigate work-life balance.

Skilled and unskilled blue-collar workers used similar strategies to request schedule flexibility, such as going around supervisors to make requests higher up the chain of command, or pointing to past examples of hard work to persuade bosses to grant time off. What was different between skilled and unskilled workers was how supervisors responded.

“Unfortunately, many of the unskilled participants in our study indicated that they desired more flexibility and permeability, and this is reflected in the types of accommodations asked for,” the authors write. “For example, Sophia’s request to carry her cell phone on her at work to tend to her sick mother was denied by her supervisor, and Michele was not permitted to rearrange her schedule in order to take English courses at night to further her education.”

The gist: “In many of the examples shared by skilled blue-collar employees, their requests were almost always accommodated, which may suggest that those in skilled professions have an easier time getting requests granted,” the authors write.

Digital Inequalities and Why They Matter

Laura Robinson, Shelia R. Cotten, Hiroshi Ono, Anabel Quan-Haase, Gustavo Mesch, Wenhong Chen, Jeremy Schulz, Timothy M. Hale and Michael J. Stern. Information, Communication & Society, March 2015.

Digital inequality refers to gaps in access to and knowledge of computers, smartphones and the internet. The authors provide an overview of research on how digital inequality plays out across gender, age, race and ethnicity and income.

People with jobs, for example, are more likely to use computers, according to the authors. People who use the internet tend to earn more. By the time kids reach middle school, a digital inequality gap emerges between children familiar with the internet and computers, and those who aren’t. Digital skills matter, particularly as more jobs in sectors like manufacturing are automated, according to the authors.

“The shift toward ‘networked work’ — partly spurred on by technological transformations — has important consequences for organizational structure and job quality,” the authors write. “In the United States, national data show that telework and [information and communication technology] use are positively related to job autonomy and skill development.”

The gist: “Digital inequalities continue to combine with race, class, gender, and other offline axes of inequality. Even in countries with high levels of smartphone adoption, basic access to digital resources and the skills to use them effectively still elude many economically disadvantaged or traditionally underrepresented segments of the population.”

For more on the coronavirus pandemic, learn how oil prices have been affected, the research so far on how the virus is infecting the economy, plus 5 tips for journalists covering the outbreak.

This article was updated on April 6 to add the metropolitan area level U.S. map of jobs conducive to telework, reproduced with author permission from the NBER working paper “How many jobs can be done at home?” The article was updated on April 7 to reflect a correction the authors made due to a coding error. The initial estimate of the share of jobs that can be done at home was 34%. The corrected share is 37%.

By : Clark Merrefield

Date : March 12, 2020

Source : Journalistresource.org 

https://journalistsresource.org/studies/economics/workers/telework-telecommuting-inequality-research-coronavirus/

COVID-19 entrenching poverty in the developing world

Through disruption of the forces of supply and demand and the forcing of lockdown measures across the global economy, the COVID-19 pandemic is posing an existential threat to least developed and developing countries.

Gains made in poverty alleviation through decades of economic growth are being shattered. It is a sober reminder of humanity’s fragility and it will be a tragedy if we do not emerge wiser and more united from this savage crisis.

The number of COVID-19 fatalities in developing and emerging Asian countries is relatively small so far, but their economies are still set to be hit by post-pandemic economic disaster. More than 90 per cent of the labour force in Asia work in the informal sector without any job security and little by way of healthcare or institutional protection.

Before the pandemic, millions of South and Southeast Asian citizens worked abroad in the Persian Gulf and other countries due to a lack of job prospects at home. Remittances are an important source of foreign exchange earnings for these countries. In 2018 remittances amounted to US$72.5 billion for ASEAN countries and US$132 billion for South Asian countries.

The pandemic has suggested that over-reliance on foreign employment as an answer to domestic unemployment is an imprudent strategy. As COVID-19 spread, millions of migrant workers were sent home while millions more were stranded in their host countries. Those who returned found their home economies struggling for survival. Increasing fiscal deficits have also disabled many countries’ ability to address the consequences of the pandemic.

Still, many developing countries are launching stimulus packages to revive their economies. Such packages range from 0.1 per cent of GDP, in Sri Lanka to 8.9 per cent in Thailand. This is in contrast to stimulus packages in developed countries — 11 per cent of GDP in the United States, 19.7 per cent in Singapore and 21 per cent in Japan. Nepal, Cambodia and Laos were unable to devise any financial stimulus package.

Common measures in these packages include daily food rations for the most vulnerable, short-term income support for the poor, subsidies for small- and medium-sized enterprises, insurance protection for healthcare workers and public works construction. But these measures remain grossly inadequate given the scale of job losses and hunger.

Countries traditionally playing a global leadership role are demonstrating fatigue or retreat, as 92 per cent of the globe is facing negative GDP growth this year. Multilateral resources committed by the World Bank (US$150–160 billion over the next 15 months), the Asian Development Bank (US$20 billion) and the IMF (around US$1 trillion) are insufficient. The IMF’s own estimates show the world’s current financing needs are around US$2.5 trillion. But the capacity of these institutions to process claims is overwhelmed as requests for assistance surge. Meanwhile, around US$100 billion in foreign capital has left Asia since the pandemic began.

The need to assist least developed and developing countries has never been more compelling. The suffering of millions of jobless youths — if prolonged and not prudently addressed — could result in massive cross-border movements in due course and social upheaval across multiple countries. Yet the global appetite for migration is waning and donor countries are themselves under fiscal constraint and negative growth prospects.

This pandemic displays the huge income and social inequality between rich and poor countries. COVID-19 is not a health crisis — it is a human crisis. Millions of workers and hungry families face food shortages, though others remain indifferent to food wastage and poverty.

Some reassuring baby steps are emerging from different platforms. These include Japan’s contribution of US$100 million to the IMF’s Catastrophe Containment Relief Trust and SDR1.8 billion (US$2.5 billion) to the Poverty Reduction Grant Trust. The South Asian Association for Regional Cooperation’s COVID-19 Emergency Fund of US$21.8 million and the ASEAN COVID-19 Fund symbolise admittedly modest but important regional efforts.

COVID-19 confirms some built-in anomalies of the current global financial system. All countries face fiscal and foreign exchange stress as they roll out expensive measures to stimulate their economies. But the United States and 14 other nations with swap arrangements are relatively spared from these stresses.

Swap arrangements are those agreements between the US Federal Reserve and other central banks guaranteeing countries a pre-arranged amount of US dollars whenever needed. Hundreds of countries are denied this privilege. It seems only fair that the United States and its swap partners set up a common global pool of financial resources to aid poorer countries through this period, as many emerging countries lack the institutional infrastructure and financial firepower to combat the crisis.

Bilateral and multilateral agreements should be better leveraged to coordinate a global support program for the poorest countries on an experimental basis. The deployment of some form of wide financial provision — funded by donor governments, big corporations and philanthropic organisations — could help prevent the development divide deteriorating further. Unusual times call for unusual measures.

To recover to pre-pandemic levels of growth, countries must at minimum collectively commit to keeping markets open for free trade and investment. Regional and global supply chains need to be maintained to ensure the flow of food, medical equipment and other basic necessities. ASEAN’s continued commitment to deliver the Regional Comprehensive Economic Partnership (RCEP) by the end of 2020 is a powerful message towards this goal.

Humanity must take this crisis as an opportunity to proactively address fundamental challenges to the global economy, tackling social inequalities and degradation.

Omkar Shrestha is a former senior official of the Asian Development Bank.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.

By : Omkar Shrestha, Singapore

Date : June 19, 2020

Source : East Asia Forum

https://www.eastasiaforum.org/2020/06/19/covid-19-entrenching-poverty-in-the-developing-world/