Search

The Bill and Melinda Gates Foundation Soon after the World Health Organization (WHO) declared a pandemic, the World Bank made available rapid financing to strengthen countries' ability to respond to COVID-19 through a multiphase programmatic approach (MPA). The MPA's immediate objective is to prevent, detect, and respond to the COVID-19 pandemic. By July 2020, the World Bank’s board of directors had approved financing for 74 countries. This evaluation aims to determine the extent to which response activities were planned at the primary health care (PHC) level, and the extent to which PHC was leveraged within the first wave of MPA projects was determined by the number of PHC activities listed in the project components and indicators. Of 74 projects evaluated, 70 (94 percent) had at least one PHC-related activity listed in the components. Frequently planned activities at the PHC level primarily included surveillance, handwashing, and community engagement–related activities. MPA projects did not prioritize a commitment to maintaining essential service delivery at the PHC level. Several projects showed a greater commitment to integrating response activities at the PHC level, including Côte d’Ivoire, Egypt, Liberia, and Papua New Guinea, Senegal, the Republic of Congo. Notably, except for Egypt and Papua New Guinea, these projects were in countries that have been affected or threatened by the Ebola pandemic. These countries emphasized the integration of pandemic response activities at the community level. Overall, this evaluation highlights three takeaways: (1) the most common project activities related to PHC focused on surveillance, community engagement, and disease prevention; (2) among MPA projects, those in the sub-Saharan African region integrated more pandemic response activities at the PHC level than did other regions; and (3) maintaining essential primary health care services was not a priority among MPA projects in the initial phase of the response.

The scale and scope of Lebanon’s deliberate depression are leading to the disintegration of key pillars of Lebanon’s post-civil war political economy. Monetary and financial turmoil along with surging inflation continue to drive crisis conditions. Public finances improved in 2021 as spending collapsed faster than revenue. Lebanon urgently needs to adopt and implement a credible, comprehensive, equitable reform plan if it is to avoid a complete destruction of its social and economic networks and immediately stop irreversible loss of human capital.

The Economic Monitor examines four possible factors behind Tunisia’s slow recovery. First, the drop in mobility related to the pandemic may have been more harmful in Tunisia. However, mobility in Tunisia has dropped to a similar extent as other countries and it has now returned to pre-pandemic levels following the acceleration in the vaccination campaign since July. If anything, the mobility drop in Tunisia has resulted in a lower reduction in economic activity than in comparator countries as Algeria and Egypt. Second, it could be that the level of public support to the ailing firms and households may have been particularly low. However, at 2.3 percent of GDP, the Covid-19 stimulus package in 2020 was in the same ballpark as other comparators in the region. Third, the structure of the Tunisian economy, particularly its reliance on tourism, may have exposed it to the negative demand shock more than other countries. Indeed hotels, cafe and restaurant and transport are the sectors which have contracted the most since the start of the pandemic. The losses of these sectors explain a significant portion of the negative effects of the crisis in Tunisia, although they do not fully account for such slow recovery.

The Philippines was among the most infected countries in East Asia at the onset of the COVID-19 outbreak. This study analyzes how international trade on various margins was affected by the country’s own lockdown policies and those of trading partners. Using a monthly series of product-by-country data for the period from January 2019 to December 2020 and an event study design, the paper shows that domestic lockdown measures did not affect international trade but external lockdowns affected both ex- ports and imports. The introduction of lockdown measures by trading partners affected imports more than exports, leading to 7 and 56 percent monthly average drops in export and import values, respectively. Restrictions on internal movements and international travel controls in partner countries were responsible for the drop in exports. The slump in imports was because of workplace closure, stay-at-home requirements, restrictions on internal movement, and international travel controls by trading partners of the Philip- pines. Intermediate goods were the key driver of the drop in imports following foreign lockdowns, reflecting supply disruptions in backward global value chain participation. At the same time, exports of intermediate goods were more resilient to the lockdown policies. Finally, both exports and imports were more affected at the extensive margin than the intensive margin, as lockdown measures hindered interactions among people, in turn reducing the potential of businesses to create new relationships and launch new products in foreign markets. Overall, diversified and geographically dispersed suppliers can help countries adjust better to future disruptions.

This report presents the findings of a process evaluation for the Coronavirus disease 2019 (COVID-19) urban cash intervention (CUCI) program. The CUCI was initiated by the Government of Malawi in 2020 to help mitigate the adverse health and economic effects of COVID-19 on urban poor populations in Lilongwe, Blantyre, Zomba, and Mzuzu. CUCI is the first major cash transfer program in Malawi to focus on urban areas. It therefore provides a conducive and fertile learning ground for shaping future policy and programming, both in terms of urban cash transfers and shock-responsive interventions. The goal of this process evaluation is to understand the quality of implementation of CUCI at each stage of the delivery chain, with a view to informing future policies and programs. The study looks at what, how, and why CUCI activities were implemented, what worked well, and what did not work well along the nine stages of CUCI’s delivery chain. The assessment also integrates the four building blocks of adaptive social protection, i.e., programs; data and information systems; finance; and institutional arrangements and partnerships - across all stages of the delivery chain. The process evaluation plans to draw lessons that can inform medium- to long-term considerations regarding the design and implementation of both urban safety nets and shock sensitive social protection policies and programs. The section lays out the context in which the CUCI was designed and implemented. It does this through examining the impacts of COVID-19 and social protection responses by governments - firstly at a global and regional level, and then with regard to Malawi.

COVID-19 was a major shock to youth entrepreneurs and their businesses in Kenya. This paper studies the causal impact of grants—worth two months of baseline business revenue—and business development services as potential mitigation measures. Using multiple rounds of phone surveys up to seven months from the start of the pandemic, the analysis finds that youth who are assigned business grants or a combination of grants and business development services are significantly more likely to maintain a business, earn more revenue and profits, retain employees, and report higher confidence and satisfaction with life. There are no corresponding effects of business development services alone, although the follow-up period is extremely short for training effects to materialize. These results suggest that cash infusion for young entrepreneurs in times of an aggregate shock can be instrumental in moderating its immediate harmful impacts.

Countries in the Middle East and North Africa region quickly introduced measures to limit the spread of COVID-19 following the first confirmed cases. These measures included curfews, lockdowns, and social distancing. As a result of COVID-19 induced impacts, countries in the region adopted social protection measures to mitigate the human and economic impacts of the pandemic. But most of the countries in MENA were already experiencing poor macroeconomics brought on by the decline in oil prices and by fragility, conflict, and violence. Illness and loss of income due to the pandemic (largely from informal sources) exacerbated the extreme vulnerability faced by the poor and vulnerable groups. Social protection programs, and particularly social safety nets (SSNs), can help households absorb short-term consumption risk during periods of crisis and build resilience to manage future shocks. In MENA, 21 countries and territories formally announced social protection measures to cope with the impacts of COVID-19. According to a Word Bank real-time review of social protection and jobs responses to COVID-19 (updated May 2021), measures in MENA have spanned social assistance, social insurance, and labor markets programs. Social assistance measures accounted for 59 percent of overall response, whereas social insurance and labor markets made up 23 and 18 percent, respectively. Since the World Bank launched its COVID-19 response, Social Protection and Jobs (SPJ) support to MENA countries has been fast, flexible, and adaptive. The number of Bank-supported social safety net beneficiaries increased from 2 million to 16 million in just 1.5 years of response which demonstrates that social protection systems in MENA are scalable and that country systems and programs are flexible to facilitate this scalability. Early lessons suggest the World Bank significantly contributed to addressing financing, knowledge, and delivery needs based on existing lending and policy dialogue platforms, drawing on the experience in MENA as well as global learning. But lessons also suggest that social protection policy dialogue in MENA is even more important moving forward, to help countries strengthen and boost policy reforms and to design and implement social protection programs and systems that can adequately, effectively, and efficiently target the poor and vulnerable, and be able to respond to population needs during disasters and shocks. This paper provides a documentation of the context for SPJ COVID19 response in MENA countries’, a framework for continued response and some of the early lessons learned.

Despite strong evidence of its importance to the welfare of children and societies, early childhood education has been comparatively neglected as a policy priority both before and during the COVID-19 pandemic. This paper seeks to understand what factors have contributed to the lack of priority for early childhood education in distance learning and school reopening plans, by applying a political prioritization framework to the pandemic context in four low- and middle-income countries: Ethiopia, Jamaica, Liberia, and Pakistan. Some aspects of the pre-COVID-19 status quo, which disfavored early childhood education, have continued, including a lack of cohesive support from civil society and a greater focus by international partners on norm promotion and technical assistance than financing. In other respects, the pandemic put early childhood education at an even greater disadvantage. These include perceptions that early childhood education is less suited to distance delivery than other levels of education, concerns about young children’s ability to comply with health protocols, and competition with high-stakes examinations for education ministries’ attention. Previous country experience with pandemics (in Liberia) and a strong coordinating entity (in Jamaica) were mitigating factors. These results point to an urgent need to elevate priority for early childhood education in normal times and improve the resilience of early childhood education in future crises.

School closures during COVID-19 (coronavirus) led to an unprecedented global experiment in the delivery of remote learning. This report seeks to assess what lessons can be drawn from experiences of remote learning during COVID-19 in K-12 education, with a focus on low- and middle-income countries. It focuses on the period from March 2020 to October 2021 and addresses the following key questions: 1. Was remote learning during COVID-19 taken up and if so, was it effective That is, did children learn as much as they did during pre-pandemic, in-person learning 2. What lessons can governments derive from this wide-spread experience 3. How might policymakers use these lessons to reimagine learning as schools begin to reopen This report is part of a larger effort led by the World Bank to provide guidance and technical assistance to optimize country effectiveness in the design and execution of remote learning strategies. It has been developed in conjunction with Remote Learning During the Global School Lockdown: Multi-Country Lessons, a qualitative study conducted between May and November 2020 to understand the perceived effectiveness of remote and remedial learning solutions implemented across 17 countries.

The informal economy in Africa is large and diverse, and it is the main source of employment in the region. It is projected to grow and create more jobs. The informal economy is well established in the region, but it also faces a host of development challenges. It is characterized by low human capital and productivity compared with the formal economy and is typically associated with limited access to resources such as electricity, finance, land, and public services. People who work in the informal economy are usually more susceptible to short-term shocks and the more catastrophic consequences of idiosyncratic shocks (acute short-term crises, such as illness) and covariate shocks (chronic or widespread shocks affecting entire communities). These vulnerabilities are exacerbated because these people ordinarily have limited avenues to formal financial institutions or risk mitigation instruments. Women are more likely to work in the informal economy in Africa and are therefore also more likely to experience precarious work environments. The COVID-19 pandemic highlighted the vulnerabilities of the vast informal economy, especially in urban areas. Social protection cash transfers provided an essential platform for delivering assistance in response to the COVID-19 shock in the Africa region. In addition to macroeconomic measures to support economic recovery, governments needed to limit the damage to livelihoods, especially in the informal economy. Many governments in the region added to their capacity to extend coverage with innovations in targeting and delivering payments by leveraging technology and using big data. In many cases, registration was carried out using mobile technology. Some governments opted to implement more direct registration processes by creating dedicated websites or relying on informal economy associations. These swift responses were success stories in their own right, but they were undertaken essentially as a response to an urgent requirement to provide much-needed support to groups that lacked social protection and to prevent them from slipping into poverty. Governments allocated significant resources, typically through external financing (US6.1 billion dollars in additional spending in 30 countries across Africa).

This paper examines the impact of the COVID-19 crisis on the reallocation of economic activity across firms, and whether this reallocation depends on the competition environment. The paper uses the World Bank’s Enterprise Surveys COVID-19 Follow-up Surveys for about 8,000 firms in 23 emerging and developing countries in Europe and Central Asia, matched with 2019 Enterprise Surveys data. It finds that during the COVID-19 crisis, economic activity was reallocated toward firms with higher pre-crisis labor productivity. Countries with a strong competition environment experienced more reallocation from less productive to more productive firms than countries with a weak competition environment. The evidence also suggests that reallocation from low- to high-productivity firms during the COVID-19 crisis was stronger compared with pre-crisis times. Finally, the analysis shows that government support measures implemented in response to the crisis may have adverse effects on competition and productivity growth since support went to less productive and larger firms, regardless of their pre-crisis innovation.

This note will examine the distributional and efficiency issues associated with the fiscal response to the COVID-19 (coronavirus) crisis in Da Nang city and nationally in Vietnam. More specifically, we look at the social assistance (cash transfer) programs. Did these programs efficiently reach people who were the most in need Was the amount of support and the duration of programs sufficient Based on the World Bank COVID-19 monitoring surveys, national-level results indicate that cash transfer programs may have ended prematurely and were not received by the poorest groups or by those who lost their jobs due to pandemic-related factors. Official data also show that the scope of the implementation was smaller than planned, both in the number of new beneficiaries who received access and in terms of the amount spent.

The emergence of the Coronavirus disease 2019 (COVID-19) pandemic has brought with it a sharp focus on public health services and health systems as well as shed light on the chronic lack of capacity to manage emerging public health risks. Climate change further exacerbates this challenge. In combination with COVID-19, the climate crisis presents a clear and present risk of disrupting and overwhelming health systems, health care facilities, and the health care staff upon which these systems rely. This risk is of particular concern in those settings with already weak health systems, leadership challenges, insufficient resources, and limited capacities. Despite these concerns, the collective global effort to respond to COVID-19 and recover from it also presents important opportunities for implementing profound cross-cutting efforts within the health sector to tackle both the pandemic and the climate crisis. This report provides a framework that builds on the World Bank’s climate-smart health care approach and integrates the World Bank’s multiphase programmatic approach (MPA) into the global COVID-19 response. It is intended to guide ongoing as well as pipeline activities and investments targeted at the pandemic, with a view to enabling the health sector to leapfrog toward climate-smart universal health coverage (UHC).

In recent years, there has been renewed interest in providing countercyclical lending and sustainable development financing through national development financial institutions (NDFIs). While NDFIs are often a feasible solution for addressing development needs and closing financing gaps, they are not always the best solution, and their setup and structure need to be tailored to the country’s needs. It is important that prior to setting up a new NDFI or increasing the scope of operations of the existing ones, governments consider all available public policy interventions as well as options for private capital involvement to address unmet financing needs of the private sector. NDFIs will likely see strong demand for their interventions in a post- Coronavirus disease 2019 (COVID-19) recovery phase. This calls for enhanced NDFI efficiency and effectiveness. To maximize the net benefits of NDFIs and ensure their financial sustainability, NDFIs should be effectively managed and properly supervised. NDFIs have been important actors in the implementation of countercyclical finance in response to the COVID-19 pandemic and have helped mitigate a credit crunch. During the COVID-19 pandemic, governments have taken on large balance-sheet risks to support credit growth, in many cases using NDFIs as administrators of public anti-crisis programs.

Since the Great Depression of the 1930s, and through the more recent Asian Crisis of 1997 and Great Recession of 2008/09, governments have experimented with Keynesian style fiscal stimulus to support employment and accelerate economic recovery. The effectiveness of these policies depends on the size of fiscal multipliers. A large body of economic literature has estimated such multipliers, with gradually increasing precision, due to econometric improvements and better ways to identify fiscal impulses. Overall, the largest multipliers are found to be associated with public investment, as opposed to other types of spending. Such public investment multipliers are typically below one in the short run, but studies with multi-year horizons suggest that values higher than unity can be attained over time. The size of multipliers is sensitive to economic conditions. During recessions, and periods of high unemployment, transfer payments appear sometimes to offer higher multipliers than public investment. An important exception is when fiscal and monetary policies are closely coordinated and interest rates approach zero, conditions that provide the strongest evidence for the efficacy of public investment multipliers. Other institutional factors also play a crucial role in determining the size of the public investment multiplier, in particular the country’s absorptive capacity, and the selection of high-quality shovel ready projects. However, there is limited empirical evidence available on the magnitude of fiscal multipliers in developing country settings, or for infrastructure sectors or subsectors specifically. The few studies available suggest that certain types of green infrastructure (energy efficiency, solar energy, and so forth) may bring employment benefits in the short run, while innovative digital infrastructure may yield longer-run benefits for economic growth. The relevance of these findings to the current COVID-19 crisis is explored.

The Caribbean region is highly exposed to different types of shocks, some with devastating effects, ranging from climate change and disasters to external economic stresses and epidemics like the ongoing COVID-19 pandemic. Most Caribbean economies are small and open, and reliant on tourism and foreign investments, combined with high levels of poverty, which makes countries in the region vulnerable to such shocks. Shocks disproportionally affect the poor because they are often not only more exposed to them (e.g. due to their geographical location), but they are also more vulnerable to their effects. The sources of resilience available to the poor are more limited, and therefore they are often less equipped to anticipate, absorb, and recover from shocks. The social protection (SP), health, and education sectors play key roles in helping people to build human capital for resilience. These sectors contribute to strengthening the capacities of households and individuals, and in particular the poor, to anticipate, absorb, and recover from shocks. In this regard, ensuring business continuity for these services during shock events is crucial, alongside developing the capacity to rapidly adapt and deploy adequate support to people affected by shocks. Adaptive Social Protection (ASP) is concerned with how SP programs, services and systems can contribute to addressing covariate shocks through preventive, preparedness, and response actions: that is, adapting and using the capacity of the SP sector, typically developed for addressing idiosyncratic shocks, to enhance the resilience of households – and of the poor in particular

The COVID-19 pandemic has triggered a massive increase in global debt levels and exacerbated the trade-offs between the benefits and costs of accumulating government debt. This paper examines these trade-offs by putting the recent debt boom into a historical context. It reports three major findings. First, during the 2020 global recession, both global government and private debt levels rose to record highs, and at their fastest single-year pace, in five decades. Second, the debt-financed, massive fiscal support programs implemented during the pandemic supported activity and illustrated the benefits of accumulating debt. However, as the recovery gains traction, the balance of benefits and costs of debt accumulation could increasingly tilt toward costs. Third, more than two-thirds of emerging market and developing economies are currently in government debt booms. On average, the current booms have already lasted three years longer, and are accompanied by a considerably larger fiscal deterioration, than earlier booms. About half of the earlier debt booms were associated with financial crises in emerging market and developing economies.

This report reflects on the Indonesian school system's response to the COVID-19 (coronavirus) pandemic, assesses the influences of these policies on children in Indonesia, and discusses lessons learned. It further synthesizes these lessons into policy recommendations that might guide the Ministry of Education, Culture, Research and Technology (MoECRT) to recover and to strengthen the system. For over a year, the Government of Indonesia (GoI) has responded to the evolving situation promptly, with policy guidance and other support efforts, to keep 60 million children engaged in learning. While these efforts are lauded, the experiences of students, teachers, and parents shared here reflect the challenges that the pandemic, and consequent Learning from Home (LFH) have presented. By reviewing the experiences of students, teachers, and parents identified through research studies conducted during 2020, the report proposes four broad policy areas that need attention; i) Refocusing effort on learning, ii) Supporting learning recovery, iii) Providing training, support, and guidance to teachers, parents, and school principals, and iv) Strengthening relations between schools and their communities.

Government initiatives to reduce the housing deficit in Colombia go back more than a hundred years, but it was only after the creation of the Ministry of Housing as an independent agency, a decade ago, that national housing policy took on the relevance that it has today. Since then, Colombia has made substantial progress. Building on the progress made by previous governments, since 2018 the national government has promoted a comprehensive, inclusive, and sustainable housing policy, which has led to notable improvements, and enabled significant progress towards achieving the sustainable development goals (SDGs) and implementing best practices in the region. The past two and a half years have been full of positive results and unimaginable challenges, including the Coronavirus disease 2019 (COVID-19) pandemic. In this context, national housing policy in Colombia has started to undergo a transition towards a truly integrated approach, one which addresses several of the challenges discussed in the report. One of the key aspects of this transition is the main thesis developed in this report: the need to intensify housing policy’s focus on the qualitative housing deficit after years of concentrated efforts to reduce the quantitative deficit.

While the coronavirus disease (COVID-19) pandemic reinforced the critical role that water supply and sanitation (WSS) plays in preventing its spread, it affected the financial stability of service providers in the industry. In response to demands from the client countries, the World Bank carried out an analytical service and advisory (ASA) activity to assess the financial impact of the Coronavirus (COVID-19) pandemic on WSS service providers in Latin America and identify possible mechanisms to improve service providers’ resilience to these external shocks. This report presents the key findings from the financial impact assessment of the Coronavirus (COVID-19) pandemic on WSS service providers in Latin America and draws cross-cutting lessons. The report also documents examples of good practices that can be implemented at the WSS service provider and government levels to build the financial resilience of the sector and lays out some financing mechanisms that can help service providers enhance their capacity to cope with future pandemics or other crises, including natural disasters. It is envisioned that the findings of this report will inform policymakers and WSS service providers in the World Bank’s client countries in planning for financial resilience building in the WSS sector.

This study includes three main sections that have been organized in a chronological order within this report: the first one, “What can we learn from education emergency responses in low- and middle-income countries?” analyzes the emergency education responses to the COVID-19 pandemic of over 120 governments from April until May, 2020. The second section, “Is remote learning perceived as effective? An in-depth analysis across five countries” discusses the main national education responses deployed by Brazil, Kenya, Nigeria, Sierra Leone, and Peru, as well as the perceived effectiveness of these strategies conducted from May until August, 2020. The third section, “What works with remote and remedial strategies? an analysis across 13 countries” builds on key lessons learned during the analysis of the five multi-country experiences and presents global trends of remote learning implemented during school closures and the actions governments adopted to get ready for remedial learning, conducted from August until December 2020. The countries prioritized for the third section are IDA borrowing countries of which six are low-income countries.

Human capital development is imperative to achieve sustainable economic growth in Iraq. At the heart of Iraq’s human capital crisis is a learning crisis, which is exacerbated by effects of the Coronavirus (COVID-19) crisis on education service delivery. The low levels of human capital development, coupled with limited opportunities to gain job-relevant skills, have translated into worsening economic and social outcomes. To overcome these sources of fragility and spur sustainable human capital driven economic growth, change can only be brought about through a comprehensive reform agenda that addresses the inefficiencies in the education sector and promotes a renewed focus on learning. This Iraq education reform note proposes actionable reforms for key education sector inputs to lead to better learning and skills development.

Successive waves of COVID-19 disrupted the Thai economy in the first half of 2021, but their impact was mitigated by recovering global demand and substantial fiscal support. After a second wave of COVID-19 infections began in late 2020, the government strengthened public health and social distancing measures to contain the renewed spread of the virus. The shock of the second wave caused the economy to contract by -2.6 percent, year-on-year (yoy), in Q1 2021, following a 6.1 percent drop in GDP in 2020 which was one of the steepest contractions among Association of Southeast Asian Nations (ASEAN) member states. While private investment and manufacturing production recovered to near pre-COVID levels in the first quarter of 2021, weakness in the services and agricultural sector persisted. A third wave of infections that emerged in April 2021 has proven especially severe, and the number of cases surged to over 3,000 per day in May-June 2021. Strict containment measures have reduced mobility and negatively affected consumption and business sentiment. Activity in the tourism sector has remained negligible, and the outlook is clouded by the ongoing impact of COVID-19 across the region, the emergence of new variants, and slow progress on vaccination. However, rebounding goods exports have provided substantial support to the Thai economy, driven by recovering global demand for automotive parts, electronics, machinery, and agricultural products. Cash transfers, public health initiatives, economic recovery programs and other forms of fiscal support have helped shore up private demand while supporting consumption among vulnerable households and attenuating the impact of the crisis on poverty. Going forward, government will need to invest in strengthening the social protection system. Prior to the pandemic social assistance benefits were not very generous and often inadequate to protect the poor. The largest social assistance programs were categorically targeted, and only recently is poverty targeting becoming more prominent. In the years to come it should be a priority to ensure that vulnerable beneficiaries receive adequate support and given the limited fiscal space would also require significant investments in effective targeting. The crisis also further underscores the need to ensure that the social protection system covers the large informal sector in Thailand at all times, not only during crises.

Tajikistan’s agrifood system has had a steady and growing presence domestically and in the Central Asia region, but still faces many constraints. Agriculture is significantly affected by climate change due to the high vulnerability of its natural environment and the low adaptive capacity of both farmers and the public sector. Coronavirus (COVID-19) disruptions amplified the latter and highlighted the need for more constructive relationships between public policy and the private sector, not only to respond to imminent challenges brought by the current crisis, but also to implement longer-term solutions for resilient development. This report reviews key issues characterizing the agrifood sector in Tajikistan (Chapter 1), assesses how the agrifood sector fared in the face of COVID-19 (Chapter 2), and discusses key findings regarding agricultural public expenditure policies (Chapter 3). Chapter 4 presents recommendations for building a better future.

Almost half a century ago, policy leaders issued the Declaration of Alma Ata and embraced the promise of health for all through primary health care (PHC). That vision has inspired generations. Countries throughout the world—rich and poor—have struggled to build health systems anchored in strong PHC where they were needed most. The world has waited long enough for high-performing PHC to become more than an aspiration; it is now time to deliver. The COVID-19 (Coronavirus) pandemic has facilitated the reckoning for that shared failure—but it has also created a once-in-a-generation opportunity for transformational health system changes. The pandemic has shown policy makers and ordinary citizens why health systems matter and what happens when they fail. Bold reforms now can prepare health systems for future crises and bring goals such as universal health coverage within reach. PHC holds the key to these transformations. To fulfill that promise, however, the walk has to finally match the talk. Walking the Talk: Reimagining Primary Health Care after COVID-19 outlines how to get there. It charts an agenda to reimagined, fit-for-purpose PHC. It asks three questions about health systems reform built around PHC: Why? What? How? The characteristics of high-performing PHC are precisely those that are most critical for managing the pressures coming to bear on health systems in the post-COVID world. The challenges include future outbreaks and other emergent threats, as well as long-term structural trends that are reshaping the environments in which systems operate in noncrisis times. Walking the Talk highlights three sets of megatrends that will increasingly affect health systems in the coming decades: • Demographic and epidemiological shifts • Changes in technology • Citizens’ evolving expectations for health care. Reimagined PHC systems will be equipped through optimized system design, financing, and delivery to ensure high-quality services, care to address patients’ needs, fairness and accountability, and resilient systems.

Lesotho, a high-altitude, landlocked country of 2.1 million people encircled by South Africa, has made gains in poverty reduction over the last decade but challenges of shared prosperity remain. The country has made significant investments in developing social protection programs as part of the Government’s commitment to protecting vulnerable groups. In sum, while several social assistance programs in Lesotho are found to be effective, whether measured by impact or spending effectiveness, spending on social protection is very high and cost-effectiveness varies.

In recent months, there has been a steep increase in the number of daily new cases and, more disturbingly, in the number of deaths. While it took almost one year for Malaysia to record its first 100,000 cases, the increase in the number of new cases between April to May 2021 alone amounted to more than 100,000. Similarly, while it took about one year for cumulative deaths to reach 500, the cumulative number of deaths in the first two weeks of June alone was more than 500. Even more worryingly, the number of brought-in dead (BID) cases also rose sharply; in May 2021, BID cases accounted for nearly one-third of total deaths. The severity of the current wave has raised concerns regarding the overall capacity of the health system. With the number of new cases and death rates continuing to climb at a rapid rate, the health system has been operating at close to its maximum capacity, with most intensive care units (ICUs) running at nearly 100 percent capacity. At the same time, key containment measures, including mass testing and contact tracing, have not been fully or effectively implemented. In addition, the rollout of the country’s vaccination program is being affected by delayed vaccine supply and high vaccine hesitancy, although there are some signs that the pace has picked up recently. To curb the spread of the pandemic and to ease the burden on the health system, the government has reimposed the movement control order (MCO). Initially, the terms of the MCO allowed for most economic sectors to continue to operate. However, with the number of cases remaining high and with no signs of abatement, the government subsequently announced a full lockdown, with only key essential services allowed to operate. The Ministry of Health has indicated that it may take between 3-4 months to flatten the curve of the pandemic.

The twin shocks of the pandemic and the coup pushed the economy into a recession in 2020. Real GDP is estimated to contract by 2.0 percent (4.9 percent in per capita terms) in 2020. The containment measures from mid-March to early May 2020 hampered economic activity in the sectors that source critical imports from abroad, depend on international traveling and those more reliant on face-to-face interactions for service delivery. On the demand side, private consumption declined, due to lower remittance inflows, households’ response to the health hazard, and containment measures. Non-priority public investment was curtailed to accommodate COVID-related expenditures, and donor disengagement after the military coup. Inflation picked up in May and continued to rise due to low cereal output and supply chain disruptions. The fiscal deficit increased to 5.5 percent of GDP in 2020. The pandemic’s economic toll and the slowdown in international trade slowed domestic revenues. Authorities responded with an ambitious COVID-19 emergency response plan (2.3 percent of GDP). Therefore, both the spending increases, and revenue shortfalls contributed to a higher fiscal deficit. Meanwhile, external support from international communities were delayed after the military coup. Public debt subsequently increased to 44.1 percent of GDP. Notwithstanding this increase, Mali remained at moderate risk of debt stress with some space toabsorb shocks (joint IMF/World Bank Debt Sustainability Analysis (DSA), February 2020). The crisis offers an opportunity to build back educational systems stronger and more equitable than before. As rules around social distancing are gradually relaxed, systems need to ensure that schools reopen safely, student dropout is minimized, and learning recovery starts. An immediate policy option to focus on is the development and implementation of remedial education, accelerated learning programs, and revision of the academic calendar and examination schedules to allow effective school continuity particularly in poor and conflict areas. Medium-term policies in the aftermath of the pandemic will be the: (i) enhancement of the immediately established remote learning platforms within the ministry of national education and (ii) development of digital teaching content for each education level in full alignment with the existing curricula. Longer term policies would be to establish a virtual library with an inventory of national and international teaching resources to be used for remote learning programs to be delivered through existing channels (radio, television, mobile phone, and internet). These policies would make the country resilient to future disruptions. Given limited resources, policy prioritization, effective implementation should be emphasized and in line with a general framework of medium-term fiscal consolidation. A COVID-19 response plan was put in place in April 2020, with an uneven level of implementation. Lessons should be learnt with improved oversight of COVID-19 fund execution. Meanwhile, the enduring structural deficit and increasing resort to domestic short-term financing add to the risks on fiscal sustainability, which is further aggravated by the 2020 twin crises. The broad direction for fiscal policy changes points to the need to mobilize more domestic revenue and reform public spending to increase the fiscal space for higher quality services and investments, while reducing the overall deficit.

South Africa is set to emerge from the crisis weaker than it had been going into it. However, this Economic Update argues that the reasons for low growth and high unemployment do not lie in the government’s crisis response, which has generally been sound. Growth is expected to reach 4 percent in 2021, slowing to 2.1 percent in 2022 and 1.5 by 2023. The global recovery is helping South Africa, especially given strong performance by China and the United States, two of its main trading partners. With deeper economic reforms, South Africa could benefit even more from the high growth in its trading partners. Low-wage workers suffered almost four times more job losses than did high-wage ones. Although a modest job recovery has started, it is at risk from the severe third wave of the pandemic. Self-employment represents only 10 percent of all jobs, as against 30 percent in most upper-middle-income economies, such as Turkey, Mexico, and Brazil. The emerging start-up sector in South Africa could help close this gap.

This third edition of the Zimbabwe Economic Update (ZEU) aims to provide both a current and historical background covering the pre-pandemic (2019) and pandemic (2020 to April 2021) period. The 2019-2020 period marked a very difficult time for the country as 2019 was clouded by a prolonged drought, unprecedented cyclone and turbulent economic reform period; while 2020 and early 2021 coincided with a global Coronavirus pandemic that further dampened prospects at both global and local levels.

Kazakhstan’s economy started to recover in the second half of 2020, although real GDP is still lower than pre-COVID-19. After suffering the worst contraction in the past two decades, Kazakhstan’s real GDP rebounded in the third quarter of 2020, and growth has extended to the first quarter of 2021. Real GDP in Q1 2021 grew moderately at 1.9 percent in seasonally adjusted terms relative to the Q4 last year. The external environment has generally improved and lifted the value of Kazakhstan’s exports by about 5.8 percent in Q1 2021 compared with Q4 2020 in seasonally adjusted terms. In Q1 2021, China experienced a faster-than-expected economic rebound, while the euro area suffered another dip due to the COVID-19 resurgence. This update features findings on factors affecting the slow productivity growth among Kazakh firms, one of the critical development challenges. Productivity matters to sustain long-term growth and improve the standard of living. Findings from firm-level data analysis suggest a muted contribution of firms’ upgrading capability (innovation, managerial), poor allocative efficiency, and limited contribution from entry and exit dynamics. The authorities should consider coordinating policies to improve productivity growth by ensuring competition in the product market, reducing barriers for firms to entry in sectors dominated by state-owned enterprises, improving the effectiveness of investment policy and promotion, and boosting firms’ capability to innovate. Also, revisiting distortive support programs for firms should be reconsidered to avoid perpetuating inefficiencies in firms.

The article takes stock of the social protection measures implemented through the Pradhan Mantri Garib Kalyan Yojana (PMGKY) to respond to the livelihoods impact of COVID-19 in India. The paper reports the share of households that received food, cash transfers and both forms of assistance under the PMGKY program at the national and state level. While a few surveys have reported coverage and benefit receipt information related to PMGKY, the current analysis draws on one of India’s largest panel survey of households from CMIE to better quantify the coverage and targeting parameters. Results find that nearly 80 percent of all households received at least one social protection benefit from government programs. Approximately 40 percent of all poor households reported receiving both food and cash assistance. While subsequent versions of the paper shall attempt to unpack quantum of assistance, the first round of results on receipt of any transfers suggest that relief measures have been pro-poor and broad-based in outreach. However, there are state level variations in benefit delivery. Urban areas have lagged in coverage and cash transfers reached fewer shares of households relative to food distribution through the Public Distribution System (PDS). Furthermore, analysis highlights the need to bolster benefit levels for any future relief measures. Drawing on lessons from PMGKY implementation, the article concludes with suggestions on designing a decentralized and adaptive social protection system in India to protect the poor and vulnerable against impacts from the second wave of the pandemic and any future crises.

The advent of the novel coronavirus (COVID-19) pandemic has led to a severe liquidity crunch among private firms. Yet, formal analysis of the impact of a liquidity crunch or access to finance on the performance of firms during the pandemic is limited. The present paper estimates the impact of access to finance in the period before the pandemic on the likelihood of a decline in sales of the firm during the pandemic. The results show a strong connection between the two. That is, firms with better access to finance are significantly less likely to experience a decline in sales, and this relationship is highly heterogenous. First, better access to finance reduces the likelihood of a decline in sales much more for firms that have a stronger long-standing relationship with important stakeholders such as skilled workers and input suppliers. These are firms that use more skilled relative to unskilled workers, firms in industries with a more complex network of input suppliers, and firms in countries where the cost of enforcing contracts with new input suppliers is high. Second, the impact of access to finance is less among firms that use more women relative to men workers. This is especially so in countries or societies that accord a higher value to women’s caregiving role than to their work outside the home. The paper argues that both of these heterogeneities are along expected lines and derive from the specific ways in which access to finance benefits firms in fighting the pandemic. Thus, they help to raise confidence against endogeneity concerns about the main results.

The deep recession in many of the emerging market transition economies of Europe and Central Asia caused by the COVID-19 crisis has raised fears of long-term damage to potential output through scarring and hysteresis. These economies were also hit hard by the great recession caused by the global financial crisis. This paper provides empirical estimates of the impact of the great recession on the subsequent medium-term level of real gross domestic product in a sample of 65 middle-income countries. It finds evidence of a significant hysteresis parameter in these countries. The paper also examines how the combination of a hysteresis parameter and a positive fiscal multiplier can mean that a countercyclical fiscal expansion that successfully mitigates the output loss in a recession need not worsen public debt levels in the medium to long term because of its positive impact on potential output and thus the tax base.

Somalia Economic Update reports aim to contribute to policymaking and the national conversations on topic issues related to economic recovery and development. The report contains three main messages. The COVID-19 pandemic exposed the costs of not investing in a public health system. The near-term economic prospects for Somalia depend on the pandemic’s path. Public spending on health is crucial to support testing and tracing and ensuring that the logistical, administrative, and financial requirements of mass vaccination are in place. The slower the pace of vaccination and the larger the unvaccinated population, the greater the possibility that new variants of the virus will develop, increasing the prospect of a more protracted pandemic.

Latin America and the Caribbean (LAC) reported over 30 million Coronavirus (COVID-19) cases and around 960,000 deaths as of May 2021. Official tracking data shows that Brazil, Colombia, and Argentina have the highest number of reported cases throughout LAC, which in turn is the region with among the highest numbers across all developing regions. Moreover, Brazil is the third-worst affected country worldwide, after the United States and India, with approximately 15.4 million infections. Dramatic declines in economic activity are expected throughout the LAC region due to the global pandemic. Unfortunately, many LAC countries entered the crisis with low potential economic growth and high levels of inequality, following the region’s recent period of stagnant growth. The 2020 COVID-19 crisis will likely reverse in a short time frame many of the social gains that took decades to materialize in Latin America and the Caribbean. In the past two decades, the region has seen a reduction in the number of people living in poverty by nearly half and an increase in the size of its middle class. Income inequality also decreased, as income growth has been primarily pro-poor in recent years. Despite variations across countries, most have experienced positive welfare gains since the early 2000s. However, the growth deceleration of 2014–2019 coupled with the dramatic fall in activity caused by the COVID-19 crisis will negatively impact living standards and well-being across the region. Poverty projections for 2020 suggest that the number of the poor increased in most LAC countries. Brazil, however, implemented a generous emergency transfer program that benefited almost 67 million people and lifted millions out of poverty. As a result, poverty in the LAC region is expected to decline marginally from 22 percent in 2019 to 21.8 percent in 2020. Had no mitigation measures been implemented, the region may instead have seen 28 million new poor in 2020.

Aggregated data from mobile network operators can provide snapshots of population mobility patterns in real time, generating valuable insights when other more traditional data sources are unavailable or out of date. The COVID-19 pandemic has highlighted the value of remotely collected, high-frequency, localized data in inferring the economic impact of shocks to inform decision making. However, proper protocols must be put in place to ensure end-to-end user confidentiality and compliance with international best practice. This paper demonstrates how to build such a data pipeline, for the case of The Gambia, channeling data from mobile network operators through the national regulator to the analytical users, who in turn produce policy relevant insights. The aggregated indicators analyzed offer a detailed snapshot of the decrease in mobility and increased out-migration from urban to rural areas during the COVID-19 lockdown. Recommendations based on lessons learned from this process can inform engagements with other regulators in creating data pipelines to inform policy making.

COVID-19 is spreading quickly throughout the country, despite early successes in containing the virus. Meanwhile, flooding and landslides have caused considerable human loss and economic damage. These compounding health and humanitarian emergencies are undermining the economic recovery in 2021, but the recent approval of a revised budget can alleviate the negative impacts. Economic activity has been weakened by the recent COVID-19 outbreak and the impact of Cyclone Seroja. GDP is forecast to grow by 1.8 percent in 2021, which is lower than the 3.1 projected in October 2020. The economy is expected to recover in the medium-term, but structural constraints will remain an impediment to faster growth. Reforms to boost productivity and competitiveness are critical. COVID-19 and recent floods have highlighted and exacerbated underlying weaknesses in Timor-Leste’s health system. Disruptions to health and nutrition services arising from these crises may have a multiplier effect on access to care for routine and essential care, setting back the country’s progress on health outcomes and human capital development.

In lower-income countries, the economic contractions that accompany lockdowns to contain the spread of COVID-19 can increase child mortality, counteracting the mortality reductions achieved by the lockdown. To formalize and quantify this effect, this paper builds a macro-susceptible-infected-recovered model that features heterogeneous agents and a country-group-specific relationship between economic downturns and child mortality, and calibrate it to data for 85 countries across all income levels. The findings show that in low-income countries, a lockdown can potentially lead to 1.76 children’s lives lost due to the economic contraction per COVID-19 fatality averted. The ratio stands at 0.59 and 0.06 in lower-middle and upper-middle income countries, respectively. As a result, in some countries lockdowns can actually produce net increases in mortality. In contrast, the optimal lockdown that maximizes the present value of aggregate social welfare is shorter and milder in poorer countries than in rich ones, and never produces a net mortality increase.

In 2020 COVID-19 (coronavirus) plunged the Western Balkan countries, like the rest of the world, into deep recession. Economic activity contracted by an estimated 3.4 percent - the worst downturn on record. The primary causes were the drop in both domestic and foreign demand and disruptions in supply chains, especially early in the year when activity in a number of sectors simply shut down. Countries like Montenegro that have a services or tourism-oriented economy, and those where more stringent containment measures and lockdowns were imposed fared the worst. The economy began to reactivate in Q3 2020, supported by a partial easing of stringent lockdowns and the revival of global demand as vaccine development advanced. However, in late 2020 restrictions were renewed in response to a resurgence of infections across most of the region; they have kept the recovery subdued. The crisis has led to significant job losses and interruptions in welfare improvements, but the labor market is rebounding from the troughs of the recession. As noted in the Fall 2020 Regular Economic Report (RER), the pandemic halted a decade of progress in boosting incomes and reducing poverty: Since its start 139,000 jobs have been lost and between 165,000 and 336,000 people in theregion were pushed into poverty. However, job support schemes and other government measures limited the labor market fallout and helped to prevent steeper spikes in poverty. By yearend, the labor market had recovered half its pandemic losses, but large numbers of people are still unemployed, and many dropped out of the labor force discouraged by the poor economic prospects. Moreover, workers with less education, women, youth, those in contact-intensive sectors, and those informally employed have suffered disproportionate livelihood and income losses.

The objective of this working paper is to provide guidance on the dilemma that governments are facing because of the economic crisis triggered by COVID-19. Measures adopted by governments during the contention phase to alleviate cash flow pressures on taxpayers require budget expenditures that exacerbate revenue losses from reduced tax bases. In parallel, governments are struggling with public expenditure needs that call for creating fiscal space. During this crisis there has been a significant increase in digital transactions as well as an acceleration of digital economy business models and trends. As a result, new income sources have appeared, and governments must find ways of taxing them. The first part of this paper provides guidance on practical measures that may be applied by tax authorities to strengthen cash management and alleviate cash flow constraints on taxpayers. Most of these measures are applicable primarily during the contention phase of the COVID-19 health and economic crisis, but there are others well positioned to support the recovery phase. This paper elaborates on some of the recommendations profiled in the ‘Revenue Measurements on Tax and Customs’ document produced by the Fiscal Policy and Sustainable Growth unit,2 which serves as the umbrella document for this one. The main scope of this paper is to further develop specific practical measures for improving the cash management of businesses and households faced with liquidity constraints during this period. It also provides recommendations to revenue administrations for improving compliance and receipt monitoring during the contention phase. The second part of this paper focuses on post-crisis measures that may compensate for the fiscal deficit generated by cash flow management and temporary tax relief measures. This paper is a continuation, from a cash flow management perspective, of previous World Bank Group research conducted in the areas of fiscal policy and revenue administration implications in response to the COVID-19 pandemic.

The COVID-19 pandemic created unprecedented circumstances and challenges in many dimensions, without clear ex ante directions and guidance on the best strategies for coping with the emergency, including in public procurement. As a result, especially in the first months of the pandemic, governments responded to the COVID-19 crisis in myriad ways. To rationalize and take stock of these diverse experiences and challenges, the World Bank’s Procurement and Standards Global Unit and Development Impact Evaluation (DIME) unit conducted an International Survey of Procurement Specialists and Experts to document the legal and administrative framework for national emergency public procurement in the first months after the global COVID-19 outbreak. The survey was implemented between May and August 2020 and received 136 contributions covering 103 countries. The authors find that (a) some countries relied more heavily on high-risk procedures than on the procedures considered critical for effective and efficient emergency procurement; (b) lack of clarity on procurement needs and lack of coordination were significant bottlenecks experienced by most surveyed countries; (c) transparency and accountability standards deteriorated for COVID-19-related procurement relative to standard procurement; and (d) e-procurement, lessons from previous emergencies, and the quality of institutions are factors that enable national procurement systems to respond in a timely and effective manner to emergencies such as the COVID-19 crisis. Using these results, authors provide policy recommendations to guide countries to prepare and adapt their national procurement systems to respond to critical emergencies such as the COVID-19 crisis.

Healthcare systems are at the frontline of delivering critical care during emergencies. Yet, already before the COVID-19 pandemic, many countries were struggling to meet even routine demands for health care. Climate change, disasters, pandemics, and demographic changes will increase pressures on already strained health systems. To strengthen the resilience of health systems to shocks and pressures, this note outlines five principles and priority areas for action. (1) Foundations: Building the capacity of health systems to effectively manage routine demands is a prerequisite for increasing their resilience to shocks. (2) Health care facilities: Facilities must be prepared to meet surge demand during emergencies and protected against shocks, such as earthquakes or floods. (3) Health care systems: Coordinated regional and system-level responses and flexible solutions are key during emergencies. (4) National emergency management: Crisis response by the health sector must be coordinated with emergency management systems, including civil protection and risk financing. (5) Quality infrastructure: Resilient water, electricity, transport, and digital systems are essential for effective health services. The principles presented in this note can help to better prepare health systems to respond to a wide range of shocks, from seasonal demand surges, to pandemics, climate change, and disasters.

This book showcases the many ways in which the World Bank is pushing the medium-term sustainable development agenda forward while dealing with the pressing health emergency response and the economic and human capital recovery challenges. Though hard and dramatic for millions of people across the region, the pandemic crisis now offers a unique opportunity to rethink the future of Latin America and the Caribbean.

The objective of this report is to provide an update to the Government of Cabo Verde, think-tanks and researchers, and the public on the state of the Cabo Verde economy and its outlook, together with the structural reforms required to strengthen the foundations for private sector-led recovery from the COVID-19 crises. The report begins with a chapter on recent economic developments, the medium-term outlook, and risks. It includes sections on growth, fiscal policy, public debt, the external sector, monetary developments, and inflation. The second chapter stresses the importance of improving the investment climate to leverage the role of the private sector for an inclusive economic recovery. It provides an overview of key challenges and actionable policy priorities around foreign direct investment, the business environment, and competition.

I discuss the multifaceted economic and financial vulnerabilities that have been created or exacerbated by the COVID-19 pandemic on a foundation of already weak economic fundamentals in many countries. Crises often do not travel alone. Banking, sovereign debt, exchange rate crashes, sudden stops, and inflation often intersect to become severe conglomerate crises. Historically, whether of the individual or conglomerate variety, crises influence the shape and speed of economic recovery. As the health crisis morphs into a financial or debt crisis in some countries, I discuss what may lie ahead in terms of the stages in crisis resolution and a brief reflection on how the resolution process can be expedited.

Drawing on a representative survey of firms in 38 countries, eight of which are in Sub-Saharan Africa, this paper documents the impact of COVID-19 and firms’ coping strategies in Sub-Saharan Africa, benchmarking with other regions. The paper shows that the impact of the pandemic is more pronounced in Sub-Saharan Africa compared with other regions. This disproportionate impact is not explained by differences in sectoral composition and other firm characteristics, but likely by the level of development. This underscores the important economic and structural contexts that predate the pandemic in understanding the differential impact. Contrary to expectations, the findings show that businesses in Sub-Saharan Africa are more likely to adjust their operations or products and services to adapt to the shock than those in other regions. However, firms in the region lag in leveraging digital technologies, remote working, and e-commerce, compared with those in other regions.

COVID-19 (coronavirus) has taken a heavy toll on Turkey, as it has across much of the world. New estimatesof total COVID-19 cases indicate that the epidemic grew rapidly over November and into December, before a new round of restrictions were put in place to control the spread of the virus in late December. The expansion of COVID-19 in late 2020 followed a similar path to many European countries. Turkey’s economic growth performance in 2020 was strong compared to other countries, but poverty spread, and unemployment became more prevalent. Turkey’s GDP grew by 1.8 percent in 2020, which was the fastest amongst G20 countries in 2020 aside from China. This was on the back of one of the strongest economic rebounds in the second half of 2020, largely achieved in the third quarter, but with positive growth continuing into the fourth quarter. Despite measures to support jobs and households, labor market and poverty outcomesnevertheless deteriorated. Indicators of domestic demand showed some signs of economic growth cooling early in 2021, although supply side measures such as industrial output remainedrobust. Turkey responded to COVID-19 with a large economic stimulus program, focused on credit channels. In fiscal terms, Turkey’s COVID-19 stimulus package amounted to nearly 12 percent of GDP when including tax deferrals and contingent liabilities. This is larger than the average for emerging market, G20 countries, and is similar in size to the stimulus packages of the United States, Australia and Canada. While the program utilized a broad range of fiscal tools, uniquely amongst G20 countries, Turkey’s support was overwhelmingly provided through the banking sector, and was not realized as direct fiscal costs on the budget, but ascontingent liabilities to the government in future. Credit stimulus, loose monetary policy, andother regulatory measures to promote credit expansion drove a sharp increase in economicactivity in late 2020. In addition to government measures to recapitalize a partial credit guarantee fund and state banks, policy interest rates were maintained below inflation and a series of financial regulatory measures introduced that incentivized banks to increase lending activities. The combined effect of these policies was to generate one of the largest credit expansions that the world saw in 2020.

The sanitary and economic shocks caused by the COVID-19 pandemic brought about the most significant disruption in the history of the education sector in Latin America and the Caribbean region, leading to school closures at all levels and affecting over 170 million students throughout the region. Despite the tremendous efforts made by countries to mitigate the lack of in-person education through remote learning, education is taking a serious hit and outcomes are plummeting in the region. Learning poverty by the end of primary education could increase by more than 20 percent. Over 2 in 3 lower secondary education students could fall below minimum proficiency levels, and learning losses will be substantially larger for the most disadvantaged students. There is no time to lose. All countries must act now to make sure schools are ready to reopen safely and effectively country-wide so as to speed up the recovery process from the dramatic effects of the pandemic. They can leverage many emerging lessons and evidence, and must protect public funding for education, to enable this reopening process. While education systems face a challenge like no other, this exceptionally difficult situation also opens a window of opportunity to build back better their education systems to become more effective, equitable and resilient.

COVID-19 has severely affected Ethiopia, weakening its economic performance. Ethiopia has experienced a collapse in external demand since April 2020 due to COVID-19. While merchandise exports, excluding gold, increased by 5.8 percent overall in FY20, they declined by 4.1 percent during July-December 2020 (year-on-year). Exports of garments, textiles, and fruits and vegetables have been particularly hit since the onset of the pandemic. Both exports and imports of services, dominated by air transport, recorded negative growth in FY20. Remittances dropped by 10 percent in FY20, although they have rebounded during the first half of FY21. Merchandise imports, which were already on decline prior to COVID-19, dropped by 8 percent in FY20, contributing to the narrowing of the current account balance, estimated at about 4 percent of GDP. Meanwhile, foreign direct investment has been severely hit, with inflows declining by 20 percent in FY20, contributing to weakening reserve levels. Despite the severe impacts, Ethiopia grew at 6.1 percent in FY20, as the impact of the COVID-19 pandemic took place largely in the final quarter of the fiscal year. Phone survey data suggests that both firm revenue and household income are significantly depressed, which points to weakening domestic demand. The adverse impact of the COVID-19 pandemic on economic activity is expected to continue in FY21, prior to experiencing a rebound in FY22 and beyond. Further action is needed to ensure a resilient economic recovery. The Government of Ethiopia is to be commended for having kept advancing its Homegrown Economic Reform Agenda despite COVID-19. Implementing some complementary reforms will be key to ensuring a resilient recovery in the new COVID-19 normal.