Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights
Final Report
February, 2021
UNICEF ROSA AND EAPRO
Contents
1. Executive Summary ...... 7 2. Rationale for MSME Focus ...... 14 3. Economic Impact of COVID-19 on The Economy and MSMEs in South Asia and East Asia Pacific ...... 16 3.1 Macroeconomic impact ...... 16 3.2 Impact on MSMEs ...... 18 4. MSME Coping Measures And Their Impact On Child Rights ...... 21 5. Key MSME Sectors and Populations Impacted By COVID-19 ...... 31 6. Review of Mitigation Measures ...... 41 6.1 Cross-cutting measures ...... 45 6.2 Nutrition-specific measures ...... 53 6.3 Primary healthcare-specific measures ...... 55 6.4 Child protection-specific measures...... 56 6.5 Education-specific measures ...... 58 7. Opportunities for UNICEF ...... 61 Areas for further exploration ...... 72 8. Country Snapshots ...... 73 8.1 Afghanistan ...... 74 8.2 Bangladesh ...... 86 8.3 Nepal ...... 103 8.4 Pakistan...... 116 8.5 Sri Lanka ...... 129 8.6 China...... 140 8.7 Indonesia ...... 151 8.8 The Philippines ...... 165 8.9 Thailand ...... 177 Annex I: Methodology and Definitions ...... 191 Methodology ...... 191 Definitions ...... 195 Annex II: Detailed Impact of MSME Response on Child Rights ...... 198
Annex III: Regional Impact Snapshots ...... 208 Economic and Child Rights Impact Snapshot: South Asia ...... 208 Economic and Child Rights Impact Snapshot: East Asia Pacific ...... 217
Figure 1: Projected real GDP growth rate ...... 17 Figure 2: Trend of stringency of measures over 2020 ...... 17 Figure 3: Share of firms benefitting from COVID-19 government support by firm size ...... 19 Figure 4: Conceptual framework for impact of MSME responses on child rights ...... 21 Figure 5: Differential in labour productivity in wages between MSMEs and large businesses ..... 22 Figure 6: Public debt burdens across South Asia and East Asia Pacific ...... 25 Figure 7: 2020 trends in international tourist arrivals for tourism-dependent countries...... 32 Figure 8: Distribution of job losses among youth in 2020 due to COVID-19 across sectors ...... 35 Figure 9: Potential direct and indirect measures for safeguarding child rights in the context of COVID-19’s impact on business ...... 43 Figure 10: Potential measures to mitigate challenges across child rights areas in the context of COVID-19’s impact on MSMEs ...... 45 Figure 11: COVID-19 cases & Stringency of measures ...... 74 Figure 12: GDP, constant prices, per cent change ...... 74 Figure 13: COVID-19 related change in coverage of services ...... 75 Figure 14: Sectoral impact of COVID-19 in Afghanistan ...... 75 Figure 15: MSME actions impacting child rights issues in Afghanistan ...... 78 Figure 16: COVID-19 cases and stringency of measures ...... 86 Figure 17: GDP, constant prices, per cent change in Bangladesh ...... 87 Figure 18: COVID-19 related change in coverage of services in Bangladesh ...... 87 Figure 19: Sectoral impact of COVID-19 in Bangladesh ...... 88 Figure 20: Revenue decline faced by SMEs in Bangladesh ...... 91 Figure 21: Revenue decline faced by RMG SMEs in Bangladesh ...... 91 Figure 22: Key child rights indicators for Bangladesh in 2019 ...... 94 Figure 23: MSME actions impacting child rights issues in Bangladesh ...... 95 Figure 24: Social security schemes in Bangladesh and levels of investment307 ...... 96 Figure 25: COVID-19 cases & Stringency of measures ...... 103 Figure 26: GDP, constant prices, per cent change ...... 103 Figure 27: COVID-19 related change in coverage of services ...... 104 Figure 28: Sectoral impact of COVID-19 in Nepal ...... 104 Figure 29: MSME actions impacting child rights issues in Nepal ...... 109 Figure 30: COVID-19 cases & Stringency of measures in Pakistan ...... 116 Figure 31: GDP, constant prices, per cent change in Pakistan ...... 117 Figure 32: COVID-19 related change in coverage of services in Pakistan...... 117 Figure 33: Sectoral impact of COVID-19 in Pakistan...... 118 Figure 34: Expected reduction in sales and profit, based on survey of 184 enterprises in April 2020 ...... 120 Figure 35: MSME actions impacting child rights issues in Pakistan ...... 122 Figure 36: COVID-19 cases & Stringency of measures in Sri Lanka ...... 129 Figure 37: GDP, constant prices, per cent change in Sri Lanka ...... 130 Figure 38: COVID-19 related change in coverage of services in Sri Lanka ...... 130 Figure 39: Sectoral impact of COVID-19 in Sri Lanka ...... 131
Figure 40: Risks of MSME business closures in Sri Lanka...... 133 Figure 41: MSME actions impacting child rights issues in Sri Lanka ...... 135 Figure 42: COVID-19 cases & Stringency of measures in China ...... 140 Figure 43: GDP, constant prices, per cent change in China ...... 141 Figure 44: Sectoral impact of COVID-19 in China ...... 142 Figure 45: MSME actions impacting child rights issues in China ...... 146 Figure 46: COVID-19 cases & Stringency of measures in Indonesia ...... 151 Figure 47: GDP, constant prices, per cent change in Indonesia ...... 151 Figure 48: COVID-19 related change in coverage of services in Indonesia ...... 152 Figure 49: Sectoral impact of COVID-19 in Indonesia ...... 152 Figure 50: Business Conditions of MSMEs in Indonesia ...... 156 Figure 51: MSME actions impacting child rights issues in Indonesia ...... 159 Figure 52: COVID-19 cases & stringency of measures in the Philippines ...... 165 Figure 53: GDP, constant prices, per cent change in the Philippines ...... 165 Figure 54: Sectoral impact of COVID-19 in the Philippines ...... 166 Figure 55: Business conditions for MSMEs in the Philippines...... 169 Figure 56: Capacity of operations in the Philippines ...... 169 Figure 57: MSME actions impacting child rights issues in the Philippines ...... 172 Figure 58: COVID-19 cases & Stringency of measures in Thailand ...... 177 Figure 59: GDP, constant prices, per cent change in Thailand ...... 178 Figure 60: COVID-19 related change in coverage of services in Thailand ...... 179 Figure 61: Sectoral impact of COVID-19 in Thailand ...... 180 Figure 62: Risks of permanent business closure in Thailand ...... 182 Figure 63: MSME actions impacting child rights issues in Thailand ...... 185 Figure 64: MSME actions impacting child rights issues in South Asia ...... 209 Figure 64: MSME actions impacting child rights issues in East Asia-Pacific ...... 218
Box 1: The impact of COVID-19 on key vulnerable segments ...... 33 Box 2: Impact of COVID-19 on key sectors ...... 35 Box 3: Trends in CSR funding and priorities in 2020 in Bangladesh ...... 93 Box 4: Trends in CSR funding and priorities in 2020 in Nepal...... 108 Box 5: Trends in CSR funding and priorities in 2020 in Pakistan ...... 122 Box 6: Trends in CSR funding and priorities in 2020 in Sri Lanka ...... 134 Box 7: Trends in CSR funding and priorities in 2020 in Indonesia ...... 158 Box 8: Trends in CSR funding and priorities in 2020 in the Philippines ...... 171 Box 9: Trends in CSR funding and priorities in 2020 in Thailand ...... 184
Table 1: MSME actions impacting child rights issues ...... 29 Table 2: Gaps in potential measures to mitigate challenges related to nutrition in the context of COVID-19 ...... 53
Table 3: Gaps in potential measures to improve access to primary healthcare in the context of COVID-19 ...... 56 Table 4: Gaps in potential measures to improve child protection in the context of COVID-19 .... 57 Table 5: Gaps in potential measures to mitigate challenges related to primary and secondary education in the context of COVID-19 ...... 59 Table 6: Gaps in potential measures to mitigate challenges related to vocational education in the context of COVID-19...... 59 Table 7: List of potential interventions for UNICEF ...... 64 Table 8: List of potential interventions for UNICEF Afghanistan ...... 81 Table 9: List of potential interventions for UNICEF Bangladesh ...... 98 Table 10: List of potential interventions for UNICEF Nepal ...... 112 Table 11: List of potential interventions for UNICEF Pakistan...... 125 Table 12: List of potential interventions for UNICEF Sri Lanka ...... 137 Table 13: List of potential interventions for UNICEF China ...... 149 Table 14: List of potential interventions for UNICEF Indonesia ...... 162 Table 15: List of potential interventions for UNICEF Philippines ...... 174 Table 16: Disruption to services for children and mothers due to COVID-19, as of June 2020 .. 178 Table 17: List of potential interventions for UNICEF Thailand ...... 187 Table 18: Descriptions, approach, sources and data considerations...... 191 Table 19: Impact of layoffs and wage cuts on child rights...... 198 Table 20: Impact of disruptions in products and services on child rights ...... 202 Table 21: Impact of diversification in sales and delivery channels on child rights ...... 205
1. EXECUTIVE SUMMARY
Context
Businesses play a crucial but often overlooked role with respect to fundamental child rights. Even when direct linkages are acknowledged, public sector advocates and private sector champions often focus narrowly on the exploitation of child labour or the lack of respect for young worker rights. However, businesses also employ children’s caregivers and produce and deliver many critical products and services for child development, sometimes alongside government, as in the case of education and healthcare. Every day, businesses indirectly shape the world in which children live through their actions, influence and command of resources. However, this role is often not reflected in decision-making within either the private or public sectors.
The economic crisis in South Asia and East Asia Pacific induced by the COVID-19 pandemic has further highlighted the risk of overlooking the direct and indirect links between business and child rights, as the shock to incomes has affected children’s access to goods and services in a way that requires an economic and not just a social response. The economic impact of COVID-19 on businesses caused by disrupted operations and declines in demand required them to respond in a range of ways that ultimately affected the lives of children. In the longer-term, these impacts have largely been driven by layoffs and wage cuts which have lowered family incomes – even pushing some into poverty –, negatively affecting several key enablers to child development. Effects on nutrition, education, and mental health have been the most observed as persisting beyond the first waves of the pandemic. While there were disruptions to goods and services in the short-term, most of these have been addressed; however, some smaller private educators continue to struggle and apprenticeship and job training opportunities have not rebounded. On the other hand, the pandemic has also required businesses to innovate and introduced new possibilities for reaching previously underserved populations; however, these potential benefits have yet to be explored widely with a focus on child rights.
Economic impact of COVID-19 on MSMEs Not a focus of impact on business, but Decline in demand Disrupted operations exacerbators of indirect impact on children
MSME responses School closures
Layoffs and Disruption in Diversification of Disruption to wage cuts products and services sales and public health delivery services
Areas of child rights impact Gaps in social protection Primary Child Nutrition Education schemes healthcare Protection
MSMEs were especially hard hit and, as critical contributors to the economy, are the special focus of this report. Where disaggregated data is available, MSMEs often fared worse than large companies. For example, as of April 2020, over 50 per cent of surveyed MSMEs in developing Asia expected profit reductions of more than 50 per cent, while just 26 per cent of large businesses expected such losses. Experts note that MSMEs are less resilient to the economic impacts of the pandemic than large enterprises due to their relatively lower liquidity and flexibility in adapting to changing business environments.
MSMEs also employ most of the population in Asia, especially in the more vulnerable informal sector. MSMEs contribute significantly to GDP (47 per cent in South Asia and 55 per cent in East Asia Pacific) and employment (70 per cent in South Asia and 60 per cent in East Asia Pacific). Of particular importance for UNICEF is that MSMEs are an important contributor to employment for women and vulnerable populations, such as informal workers. In East Asia Pacific, 59 per cent of microenterprises and 50 per cent of small and medium enterprises are owned by women. Female ownership is less common in South Asia, but women still make up 20-40 per cent of MSME employees across different countries. While comprehensive estimates for Asia are unavailable, 87.8 per cent and 75.2 per cent of the populations in South Asia and Southeast Asia and the Pacific, respectively, is employed in the informal economy1.
Impact of COVID-19 on MSMEs and implications of resulting MSME responses for child rights
COVID-19 began to spread in most of South Asia and East Asia Pacific (China excluded) in March 2020, triggering stringent lockdown measures and leaving both regions grappling with outbreaks and the consequences of an economic contraction by the end of 2020. Though most countries have relaxed lockdown measures as of November 2020 the economic impact of the initial measures has been protracted and demand remains depressed due to ongoing travel restrictions. As of October 2020, the International Monetary Fund (IMF) projected that GDP in South Asia, South-East Asia and the Pacific declined by 8.4 per cent, 3.3 per cent and 7.1 per cent, respectively.2 China is a notable exception, where the economy showed strong signs of recovery in Q3 2020, registering year-over-year (YoY) growth of 4.8 per cent, despite a Q1 contraction of 6.8 per cent.3 At a business level, in a September 2020 survey conducted across eight Asian countries, more than a quarter of MSMEs reported a decline of more than 40 per cent in sales in the first half of 2020 relative to the first half of 2019 and did not expect to recuperate in the following months .4
Despite the development and approval of several COVID-19 vaccines in late 2020 and early 2021 – including two developed and manufactured in China and India with government support – , the rollout is expected to last into 2022 and, thus, the effects of the pandemic are expected to continue through 2021.
MSMEs have primarily coped with the pandemic-induced financial pressures through layoffs and wage cuts, as well as forced and voluntary interruptions to business. The ILO estimates that 115
1 ILO, Women and Men in the Informal Economy, 2018 2 IMF, World Economic Outlook 2020 3 BBC, China's economy continues to bounce back from virus slump, 2020 4 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020
million jobs in South Asia and 31 million jobs5 in South-East Asia and the Pacific were lost during the third quarter of 2020.6 The large share of employment in MSMEs as well as the outsized economic impact on MSMEs suggest that they accounted for a significant proportion of job losses. Temporary suspension of wages was the most common financial coping measure MSMEs employed. According to an Asian Development Bank (ADB) survey conducted in April–May 2020, up to ~60 per cent of MSMEs temporarily suspended wage payments in some countries. Wage reductions were also used, though less commonly. According to the same survey, up to ~20 per cent of MSMEs in some countries reduced employee wages by more than 30 per cent.7 Financial struggles initially compelled many MSMEs to shut down, but closure rates have been declining. In South Asia, rates of small business closure fell from 46 per cent in April 2020 to 25 per cent in August 2020 while, in East Asia Pacific, they fell from 18 per cent to 14 per cent during the same period.8
While there have been concerns that MSMEs might increase their reliance on child labour, a potentially cheaper option, evidence of this is limited. Experts suggest that this is because demand for all labour has severely decreased. However, there is reason to believe that children themselves – potentially encouraged by family members – could be seeking out work to alleviate economic stress.
Some of the observed MSME responses, most prominently layoffs and wage cuts, could exacerbate critical child rights issues, especially in the areas of nutrition, education, child protection and healthcare. Poverty-induced food insecurity can inhibit access to adequate nutrition for children. An estimated 49 million additional people in South Asia and 18 million in East Asia are projected to have been pushed into food insecurity by the end of 2020. Meanwhile, an additional 3.9 million children in South Asia are expected to suffer from wasting due to the economic repercussions of the COVID-19 pandemic (projections for East Asia Pacific are unavailable). As schools closed during lockdowns, rising poverty and pre-existing digital divides meant that over 147 million children in South Asia and 80 million children in East Asia Pacific were unable to participate in online learning. Even for those children able to access online education, quality concerns remain, as teachers, children and materials have generally not been prepared for long-term, fully-digital learning experiences. Several experts have also highlighted an increased risk of mental health disorders among children and increased reports of domestic violence due to economic stress and family members being home from work. Given the inadequate public healthcare systems in most countries in the regions, loss of household income could also make direct and indirect costs of accessing healthcare, especially private healthcare, a burden for families. This is most relevant for endemic diseases and maternal and newborn healthcare, where out-of-pocket spending is dominant in several countries.9 However, there has been a limited observed long-term impact on large private healthcare systems themselves, in part because governments prioritized proper operations of the healthcare sector and reductions in demand were driven by temporary mobility and transport restrictions.
5 Equivalent number of full-time jobs lost based on lost work hours (48 hours/week) 6 ILO, COVID-19 and the world of work. Sixth edition, 2020 7 ADB, COVID-19 Impact On Micro, Small, and Medium-Sized Enterprises in Developing Asia, November 2020 8 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 9 In all countries, but Maldives, in South Asia, and Cambodia, Myanmar and Philippines in East Asia Pacific, out-of-pocket forms more than half of the healthcare expenditure
While COVID-19 has compounded issues related to childhood obesity, the links between obesity and MSME responses are weaker. While experts warn of potential increases in obesity due to changes in lifestyle and increased exposure to the marketing of unhealthy foods, evidence linking these effects to the behaviour of MSMEs is limited. Nonetheless, there is evidence that families with reduced household incomes have switched to less nutritious food to save money.
The COVID-19 pandemic has also highlighted the importance of strong social protection systems that are ready to cushion the millions of families whose economic security is tenuous and at risk of giving way to poverty due to an economic shock.
Most affected sectors and populations and potential areas for focused intervention
While at the height of lockdowns, the impact was widespread across most sectors, recovery paths have diverged, with tourism and garment manufacturing being the hardest hit in both South and East Asia Pacific as of September 2020. Services sectors were hit the hardest due to movement restrictions, with the tourism, travel and hospitality sector affected most severely, given the abrupt decline in international tourist arrivals. While domestic travel activity has increased in popular destinations, the sector is not expected to recover until international travel picks up. The readymade garments sector showed signs of a slow recovery due to a lack of demand for exports in Western markets, where risks of second and third waves of the outbreak persisted.
As previously discussed, informal MSMEs and informally employed workers are especially vulnerable. Informal MSMEs tend to have limited savings or financial contingencies and are generally not covered by government programmes or unemployment benefits, making them more vulnerable to the economic impacts of COVID-19. In recent years, in light of these outsized vulnerabilities of the informal sector, there has been considerable dialogue in the global community around supporting informal MSMEs and workers transition to the formal sector, as well as around better regulating and standardizing informal sector employment. COVID-19 has a shone a light on the criticality of these discussions.
Women have also been disproportionately affected because they are overrepresented in highly disrupted sectors, have lower access to resources and take on a greater share of domestic responsibilities. Globally, women’s jobs have been more vulnerable to this crisis than men’s jobs10. For example, while women made up 39 per cent of total employment, they accounted for 54 per cent of the job losses in May 20208. The State of Business Study found that women-led MSMEs in East Asia Pacific reported higher closure rates (27 per cent) in May 2020 than men-led MSMEs (20 per cent).11 Severely impacted sectors, like textiles and tourism, employ large proportions of women. Moreover, the increased burden of domestic responsibilities during the pandemic has disproportionately impacted women MSME leaders. According to the May 2020 Global State of Business study, 23 per cent of female small business leaders described spending six hours or more per day on domestic responsibilities while only
10 McKinsey Global Institute, COVID-19 and gender equality: Countering the regressive effects, 2020 11 Facebook, World Bank and OECD, Global State of Small Business Report, 2020
11 per cent of male small business leaders reported the same.12 Meanwhile, 58 per cent of women entrepreneurs (vs. 42 per cent of men entrepreneurs) lack access to finance in East Asia Pacific.13
Ecosystem response in Asia and opportunities for UNICEF
The response to these indirect impacts of business on children has followed previous patterns, with the private sector relatively inactive despite an enhanced appreciation of its role in a sustainable future and government taking a narrower-than-ideal approach to economic recovery. Thus far, governments have led the charge, though not typically with a child rights lens and not always in ways that reach the most vulnerable populations (e.g., informal workers). These measures have included supporting MSMEs financially, providing employment retention support (e.g., through wage subsidies) and taking unprecedented actions to temporarily expand social assistance. NGOs, though not comprehensively landscaped for this study, have been critical in providing support to affected children and their families. MSMEs have, understandably, primarily been concerned with trying to survive the economic crisis. There is limited evidence of these companies voluntarily taking action to protect employment or wages or adopting family-friendly policies in light of the impacts of COVID-19. While some businesses have pivoted to provide digital services in times of restricted movement, few have been in the position to make fundamental shifts in their business models or use what influence they may have in the service of child rights.
The implications for UNICEF’s work are two-fold: (i) there are gaps in the medium-term COVID- 19 response for which it is well-positioned to focus its advocacy, evidence generation and technical guidance and (ii) the far-reaching impact of the economic crisis highlights the need to take a systems-based approach to private sector engagement. Six opportunity areas emerge for UNICEF to build on its existing work and broaden its efforts to engage the private sector and others on the link between MSMEs and child rights at scale. Across these opportunities, it will be critical to take a systems-based approach and collaborate with a range of other actors – governments, investors, regulators, large companies and employees – in order to build an ecosystem that can encourage MSME’s to uphold child rights and can hold them accountable when they do not. Moreover, the failure of emerging mitigation measures to consider impacts on child rights amplifies the need for UNICEF to help articulate the link and work with MSMEs and other ecosystem actors to embed a child rights consciousness in longer-term recovery efforts. A shift towards more private sector ownership and accountability regarding child rights likely will not and, indeed, should not be driven by businesses alone, especially not MSMEs.
To pursue these opportunities, UNICEF country offices may need to strengthen private sector engagement capacities, increase and diversify their networks of private sector partners and more systematically include private sector analysis in the preparation of programmatic work.
12 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 13 ADB, Innovative Financial Products and Services for Women in Asia and the Pacific, April 2020
The next page provides an overview of the critical gaps to be addressed and the unique roles that UNICEF could play. ‘Chapter 7: Opportunities for UNICEF’ provides more detail as well as specific potential interventions under each broader role.
WHAT critical gaps exist and WHY HOW can UNICEF address these gaps
WHAT: While governments have taken actions to expand social protection programs, critical gaps in coverage remain. MSME workers, particularly in the Build evidence and advocate to and support informal sector, are less likely to be covered by these programs. A lack of governments in strengthening and expanding child- adequate social protection could reduce access to essential needs for children sensitive social protection for MSME workers in vulnerable households suffering from income loss. WHY: These gaps are likely due to government’s fiscal constraints, their lack of data or policy frameworks by which to identify informal workers, and ineffective registration and payment mechanisms.
WHAT: Limited action has been taken by MSMEs to amplify efforts to Advocate for stronger policies from governments and respect child rights in light of COVID-19. provide support to businesses to increase respect of WHY: Financial survival and economic considerations have assumed first child rights within MSMEs priority for MSMEs. Additionally, current policy frameworks are inadequate to hold MSMEs accountable for failing to respect child rights and responsible for preventing the negative consequences of their responses on children.
WHAT: Family-friendly policies are critical for caregivers to meet the needs Promote the provision of family-friendly policies of their children during the pandemic. Substantial action has not been taken to among MSMEs through advocacy, guidance, tools improve provision of family-friendly policies in MSMEs. and partnerships with businesses WHY: For MSMEs, financial security took priority over the amplification of family-friendly policies (FFPs) during the pandemic. A lack of awareness and expertise on practical approaches by which to institute FFPs in workplaces may have further prevented their implementation.
WHAT: Targeted support packages are needed to reach MSMEs in sectors that disproportionately employ and impact vulnerable groups. In the absence of adequate support, vulnerable workers could face prolonged income losses, Build evidence and advocate to governments for thus impacting their children’s well-being. support to enable recovery of MSMEs in sectors where WHY: MSME support packages have been largely temporary in nature, likely vulnerable groups are overrepresented due to fiscal constraints, and MSMEs in the informal sector have been hard to reach due to their low levels of financial inclusion. Moreover, support packages have failed to consider the special needs of MSMEs and the vulnerable populations they employ due to a lack of data and evidence.
WHAT: The COVID-19 pandemic has aggravated the consequences of Convene private-sector actors to facilitate MSMEs’ limited awareness of and engagement with child rights. Even when cooperation and share best practices and bring voices MSMEs have taken proactive action to uphold child rights, these actions have together to mainstream child rights considerations in lacked scale. MSMEs WHY: There has been a lack of pressure and incentives from governments in areas where these actions would constrain business objectives and there are too few examples where these actions exhibit a strong business case.
WHAT: There is an opportunity for MSMEs to develop inclusive business Mobilise MSME action towards vulnerable models sensitive to the needs of children in vulnerable households. populations by filling gaps in evidence, advocating WHY: Historically, businesses have lacked an understanding of the needs and preferences of people living at the base of the pyramid (BOP). As COVID-19 and leveraging partnerships with businesses has changed the profile of the ‘global poor’, businesses may face further challenges understanding changing needs. Evidence and examples of successful, inclusive business models is also lacking.
Business as Business as Business’ impact on communities Business as a source of The voice and provider of good employer and environment tech, innovation, financing influence of business and services
2. RATIONALE FOR MSME FOCUS
Micro, small and medium enterprises (MSMEs)14 were selected as the focus of this study, because:
i. They account for a greater share of employment than large businesses, thereby impacting a larger number of households and children ii. Early evidence suggests that MSMEs were more severely impacted by the COVID-19 pandemic iii. MSMEs in the region are critical to global supply chains but are disproportionately vulnerable to global supply chain shocks
Contribution of MSMEs to employment and the economy in the region Within the private sector, MSMEs account for a vast majority of total employment in Asia and the Pacific:
MSME share in total employment and GDP: South Asia MSME share in total employment and GDP: East Asia Pacific
Severity of economic impact of COVID-19 on MSMEs versus large businesses According to an April 2020 survey by UNIDO, across emerging economies in Asia, the economic impact of COVID- 19 was felt more strongly among micro, small, and medium enterprises1
Share of surveyed firms expecting >50 per cent drop in profits Share of surveyed firms expecting to lay off >25 per cent workers
14 Definitions of micro, small and medium-sized enterprises vary across countries. For the impact analysis, as the evidence has been sourced from different regional and national studies, a harmonized definition does not exist and country-specific definitions (detailed in Annex I) apply to country-specific data points. For programming purposes, in the recommendations, this study classifies companies leveraging the definition used in International Trade Center’s SME Competitiveness Outlook: • Micro: up to 4 employees • Small: 5 to 19 employees • Medium: 20 to 99 employees
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 14
Share of surveyed firms facing difficulty in paying worker Share of surveyed firms facing difficulty in obtaining salaries financing
Exposure of MSMEs to global supply chain disruptions Economies in Asia are exposed to global supply chain shocks: o Together, China, the EU and the US account for 64 per cent of world supply chain imports o Asian economies have direct and second order (or higher) trade linkages with these three importers, serving as suppliers of key industrial and manufacturing inputs o Due to severe lockdowns in these three regions, ripple effects were felt across Asian economies, with exports from Asia to these three major importers projected to decline by 2 per cent, or USD 71.4 billion MSMEs in the region play a critical role in these supply chains and are disproportionately susceptible to adverse impacts due to supply chain shocks: o MSMEs serve as end suppliers and producers for lead firms in their domestic countries, which, in turn, serve as exporters in the complex global supply chain network o Disruptions to this global supply chain network have outsized impacts on MSMEs. Analysis by the International Trade Centre suggests that in many cases, during the crisis, lead firms passed the risk burden down the supply chain to vulnerable SMEs in developing countries15
15 ITC, COVID-19: The Great Lockdown and its Impact on Small Business, June 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 15
3. ECONOMIC IMPACT OF COVID-19 ON THE ECONOMY AND MSMES IN SOUTH ASIA AND EAST ASIA PACIFIC
Objective: To analyse the economic impacts of COVID-19 on the economy, on businesses broadly and on MSMEs specifically. Key Takeaways:
• The stringent lockdown measures implemented to combat COVID-19 have exerted adverse macroeconomic impacts on the regions, affecting all businesses: GDP growth rates were projected to have contracted to 8.3 per cent, 3.3 per cent, and 7.1 per cent in South Asia, East Asia, and the Pacific Islands respectively in 2020 (with the exception of China, which started to recovery strongly in 2020) • MSMEs, which are deeply integrated into supply chains in the regions, faced outsized impacts on their sales and profitability because lead firms in supply chains often passed the burden down to MSMEs • Pre-existing vulnerabilities amplified negative impacts on MSMEs: MSMEs are less resilient to shock than large firms due to their limited liquidity and inadequate capacity to quickly adopt alternate business models • Moreover, MSMEs were found to be less likely to benefit from government relief packages than large firms
3.1 Macroeconomic impact
The COVID-19 pandemic has exerted a significant economic impact in both South Asia and East Asia Pacific. Due to the unpredictable nature of the disease’s spread, estimates of COVID-19’s economic impact varied throughout 2020. Furthermore, ongoing uncertainty about vaccine availability in the region will continue to make projections difficult. However, as previously noted, the most recent estimates from the IMF (October 2020), indicate that COVID-19 could have reversed economic growth in South Asia,16 shrinking the region’s GDP by 8.4 per cent in 2020. In South-East Asia17 and the Pacific Islands,18 the GDP was projected to contract by 3.3 per cent and 7.1 per cent, respectively. The economies of the sub-regions were projected to rebound in 2021. China is a notable exception. Its economy already showed strong signs of recovery in Q3 2020, registering year-over-year growth of 4.8 per cent, despite a Q1 contraction of 6.8 per cent.19 Across both South Asia and East Asia Pacific, the economic impact was especially high in countries that suffered sharp declines in tourism (e.g., the Maldives, Fiji, Cambodia, the Philippines and Thailand). Additionally, disruption in production and sales in sectors that are labour intensive and exposed to global trade risks also severely impacted economies (e.g., readymade garments in Bangladesh). Growth forecast downgrades were also pronounced in already struggling economies (e.g., Afghanistan).20
16 Countries included: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka 17 Countries included: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, Vietnam 18 Countries included: Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu 19 BBC, China's economy continues to bounce back from virus slump, 2020 20IMF, World Economic Outlook, October 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 16
Figure 1: Projected real GDP growth rate21 ( per cent annual change, October 2020 forecasts)
Stringent mitigation measures employed by many countries were key drivers of the severe economic impacts of COVID-19 on businesses in the region. In South Asia, all countries applied extremely stringent lockdown measures in April 2020, and as of November 2020, all, except for Afghanistan, extended or reinstated moderately stringent measures. In East Asia Pacific, most countries implemented moderately stringent measures by April 2020, with many relaxing them in the second half of the year before ‘second waves’ required the partial reinstatement of some.
Figure 2: Trend of stringency of measures over 2020 (Oxford Stringency Index (out of 100))22
21IMF, World Economic Outlook, October 2020 22 Oxford COVID-19 Government Response Tracker
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 17
The COVID-19 outbreak and the mitigation measures imposed to contain it caused demand declines and supply disruptions for businesses. Businesses in both South and East Asia Pacific experienced a negative supply shock due to full or partial business closures during the lockdowns, and a negative demand shock due to reductions in domestic demand and spill-over effects from other countries.
3.2 Impact on MSMEs
MSMEs play an important role in Asian economies and were amongst the hardest hit by the economic impact of COVID-19. MSMEs account for ~70 per cent of all employment in South Asia and ~60 per cent of all employment in East Asia and the Pacific, thus, they impact a large proportion of livelihoods in both regions.23 MSMEs contribute ~47 per cent of total GDP in South Asia and 55 per cent in East Asia.24 In addition, ILO experts note that most MSMEs in developing countries operate in the informal economy and lack social safety nets, making them the most at risk during the economic turndown.25 Hence, while this study considers the impact of COVID-19 on the overall business environment, it places special focus on MSMEs.
MSMEs have been at the frontline of COVID-19’s economic ramifications, with many facing abrupt declines in demand and major disruptions to operations. In a survey conducted by the ADB in September 2020, more than 35 per cent of MSMEs across eight Asian countries, reported a drop in domestic demand as their top challenge.26 MSMEs also reported temporary business closures, disruption in material supply, and low employee turnout as key challenges. Temporary business closures were especially high in Bangladesh, likely as a result of one of the most stringent, sustained lockdowns adopted in the region. As would be expected, the drop in demand and increased operational disruptions eroded sales for MSMEs across the region. In the ADB survey, more than a quarter of MSMEs reported a decline of more than 40 per cent in sales in the first half of 2020, relative to the first half of 2019. The
23 IFC, MSME Country Indicators, 2014 24 Singh and NA, MSMEs Contribution to Local and National Economy, 2017 25 ILO webpage, 2020 26 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020
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MSMEs also did not expect to recuperate in the following months, with most MSMEs across all observed countries (except Indonesia and Vietnam) expecting a decline in annual sales for 2020, relative to 2019.
These shocks to demand and operations led to cashflow and profitability challenges for which MSMEs are generally less prepared than larger businesses. MSMEs are facing cash flow constraints, limiting their ability to pay wages, taxes, supplier payments and debt payments. In the ADB survey, more than 35 per cent of MSMEs across the observed countries reported cash flow shortages as their top concern due to COVID-19.27 In a UNIDO survey of manufacturing firms across seven Asian countries,28 74–77 per cent of enterprises with 11–100 employees reported the payment of wages as a top challenge, compared to 54 per cent of enterprises with more than 500 employees.29 The resulting pressure on profits has been higher for MSMEs than for larger enterprises. For example, the UNIDO survey found that more than 50 per cent of businesses with fewer than 100 employees reported extreme drops in profit, compared to 26 per cent of businesses with more than 500 employees.30 The same survey also found that, across all the observed countries, except Malaysia, small enterprises (those with less than 30 employees) were least likely to benefit from COVID-19 government support.
Figure 3: Share of firms benefitting from COVID-19 government support by firm size per cent of respondents
These impacts on MSMEs have sparked widespread dialogue, prompting critical changes and trends in the MSME landscape in the region for the COVID-19 recovery phase, such as government-backed internationalization and diversified financing mechanisms. A report by the ADB suggests that MSME internationalization in a secure and well-organized manner is likely to be a priority for governments to boost national productivity going forward, especially in the food processing industry. Given the vulnerability of MSMEs to external shocks, as demonstrated by COVID-19, government support and protection mechanisms, such as trade insurances, could play a key role in the
27 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 28 Countries included: Afghanistan, Cambodia, Malaysia, Mongolia, Pakistan, Thailand, Vietnam 29 UNIIDO, Coronavirus: the economic impact, July 2020 30 UNIIDO, Coronavirus: the economic impact, July 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 19 new phase of integration of MSMEs with global supply chains. Moreover, diverse mechanisms of MSME financing are poised for further growth and development especially in Southeast Asia and are likely to play a significant role in the MSME landscape going forward. These include non-bank finance, digital finance (e.g., peer-to-peer lending platforms, equity crowdfunding), and MSME capital or stock markets.31
31 ADB, ASIA SMALL AND MEDIUM-SIZED ENTERPRISE MONITOR, October 2020
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4. MSME COPING MEASURES AND THEIR IMPACT ON CHILD RIGHTS
Objective: To analyse the key measures that MSMEs implemented to cope with the negative economic impacts of COVID- 19 and identify their consequences on child rights. Key Takeaways:
• The most widespread and consequential measures taken by MSMEs were to lay off workers or reduce wages; the resulting income loss deteriorated caregivers’ ability to afford education and nutritious food for children • Access to primary healthcare for children also likely reduced as, in the absence of adequate public healthcare systems, families facing income losses could struggle to afford expensive private healthcare; although evidence substantiating the same is scarce. • Rising household poverty and stress levels also posed threats to child protection, contributing to increases in domestic violence against women and children as well as the exacerbation of mental health issues among children • Some MSMEs diversified to alternate channels of service delivery, primarily digital channels; while this presents an additional channel for caregivers to access nutritious food, healthcare and education for their children, it also raises the risk of digital exclusion
To cope with the external impacts of the Covid-19 pandemic, MSMEs have responded in different ways. The most cited responses have been layoffs and wage cuts, voluntary or forced business closures, and endeavours to secure financing. MSMEs have also diversified sales and delivery channels to boost sales. These in turn have had impacts on child rights in terms of nutrition, child protection, education and primary healthcare.
Figure 4: Conceptual framework for impact of MSME responses on child rights
Economic impact of COVID-19 on MSMEs Not a focus of impact What economic challenges are MSMEs facing due to COVID-19? on business, but exacerbators of indirect impact on Decline in demand Disrupted operations children
MSME responses School closures What coping mechanisms being adopted by MSMEs are expected to impact children? Layoffs and Disruption in Diversification wage cuts products and services of sales and Disruption to delivery public health services Child rights impact Where are the coping mechanisms expected to have impact? Gaps in social Child Primary protection Nutrition Education Protection healthcare schemes
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Layoffs and wage cuts:
Even before COVID-19, MSMEs in both regions were less productive and paid lower wages than large firms. Smaller firms were more constrained along key facets of production and less able to overcome these constraints compared to larger firms. Consequently, the earnings of an average worker in an MSME are lower than those of a worker in a large firm. Analysis by the ILO in 2015 showed that, in South Asia, firms with 100+ employees pay 30 per cent higher wages than firms with 5–19 employees. In East Asia Pacific, firms with 100+ employees pay 50 per cent higher wages than firms with 5–19 employees, driven in part by different in productivity (
Figure 5).32
Figure 5: Differential in labour productivity in wages between MSMEs and large businesses
Moreover, with ~77 per cent of MSMEs in Asia being informal, MSME employees largely fell outside social protection nets and employment-related insurance coverage.33 Due to the preponderance of informality, it is difficult to ensure that jobs provided by MSMEs are fully covered by a social protection network. According to the ILO, the majority of those employed in the informal economy lack social protection, rights at work and decent working conditions. Furthermore, they rarely receive life, accident and unemployment insurance, which would contribute to their social security and ensure them paid leave in accordance with legal requirements. Therefore, although MSMEs represent a large share of employment, they may not offer decent work opportunities and employment protections as per ILO standards.34
With limited employment protections in place, the COVID-19 pandemic saw MSMEs laying off or furloughing workers, cutting their already low salaries and reducing their work hours. The ILO estimates that 115 million jobs in South Asia and 31 million jobs35 in South-East Asia and the Pacific were lost during the third quarter of 2020.36 Assuming MSME job losses corresponded with their proportion of overall employment, an estimated 80 million jobs would have been lost in South Asia and
32 ILO, Small and medium-sized enterprises and decent and productive employment creation, 2015 33 IFC, Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises, 2013 34 UNDESA, Report on MSMEs and the Sustainable Development Goals, 35 Equivalent number of full-time jobs lost based on lost work hours (48 hours/week) 36 ILO, COVID-19 and the world of work. Sixth edition, 2020
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19 million jobs would have been lost in South-East Asia and the Pacific in the third quarter of 2020.37 These estimates are likely conservative since the impact on MSME jobs is expected to have been higher than on jobs in large companies.
Layoffs and wage cuts have disproportionately impacted non-permanent workers, migrant and daily wage workers and micro-entrepreneurs. MSMEs more commonly laid off non-permanent workers. In an ADB survey of MSMEs in Vietnam and Malaysia, 50–60 per cent of MSMEs reported reductions in non-permanent workforce of over 40 per cent, but only 10–20 per cent of MSMEs reported reduction in permanent workforce by over 40 per cent.38 In the UN Economic and Social Commission for Asia and the Pacific subregional office for South and South-West Asia (UNESCAP-SSWA) survey, the population groups most at risk of losing jobs were migrant workers/daily wage labourers, people self- employed in the informal sector and MSME entrepreneurs.39 Job losses or wage cuts among migrant workers have forced them to live in poor conditions in cities, repatriate to their home countries with limited livelihood options or shelter in facilities in border areas.
Disruption in products and services:
MSMEs have closed, sometimes permanently, to cope with financial struggles and lockdown restrictions. According to a survey conducted by Facebook, the World Bank and the OECD, in South Asia, 46 per cent of surveyed small businesses reported closures at the height of the lockdown in April 2020. According to another in the same series of surveys, business closure rates in the region dropped to 25 per cent in August 2020, indicating MSMEs had been re-opening. According to the same series of surveys, in East Asia Pacific, while the closure rates stood at 18 per cent in April 2020, the re-opening of businesses was less pronounced, as closure rates only dropped to 14 per cent in August 2020.40 Many MSMEs faced the risk of permanent closure. In Thailand, around 50 per cent of surveyed MSMEs reported being at ‘high-risk’ of permanent closure as of September 2020.41 While aggregate data for the region is unavailable, mid-year, survey-based estimates for individual countries typically found that 30–50 per cent of MSMEs were either worried about permanent closure or had inadequate cash reserves to survive longer than a few months.
Diversification of sales and delivery channels:
In order to boost sales, MSMEs have diversified sales and delivery channels, increasingly growing their online presence. MSMEs are leveraging digital interventions to deliver goods and services, manage remote transactions, market efficiently and aggressively and enable access to financial services. In a Global State of Business study, 25 per cent of closed small businesses in East Asia Pacific and 20 per cent of closed small businesses in South Asia set up online presences or websites. In the same survey, 44 per cent of small businesses reported generating more than a quarter of their sales online in June
37 IFC, MSME Country Indicators, 2014 (Median MSME employment share: ~70 per cent in South Asia and ~60 per cent in East Asia Pacific) 38 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 39 UNESCAP, COVID-19 and South Asia, Jun 2020 40 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 41 Asia Foundation, Enduring the Pandemic, September 2020
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2020, as compared to 37 per cent of small businesses reporting the same in 2019. Female small business leaders were found to be more likely to develop an online presence than their male counterparts.42
Financing:
MSMEs have sought financing to manage cash flow shortages. In an April–May survey across five Asian countries, more than 40 per cent of MSMEs reported taking out loans from commercial banks. At the same time, more than 30 per cent reported delaying payments to financial institutions.43 In another survey across four countries in East Asia Pacific, more than 25 per cent of MSMEs relied on their personal funds and 30–40 per cent borrowed from family and friends.44
While there have been concerns that the Covid-19 crisis would lead to a rise in child labour, evidence that MSME actions directly drive this risk is limited. However, layoffs and wage cuts in the family could compel children to seek employment to meet income shortfalls.
This study also explored whether MSMEs were cutting employee benefits. However, evidence of such actions was limited, likely because few MSMEs had been providing benefits, beyond annual or festival bonuses, before COVID-19.45,46 Even in those countries where MSMEs enhanced benefits, only 30–50 per cent of workers reported receiving benefits such as healthcare coverage, paid sick leave and travel allowances (based on data from China and Indonesia). The reduction or suspension of bonuses is treated in this study as part of layoffs and wage cuts as it would impact the household incomes of workers.
Of the coping mechanisms adopted by MSMEs, layoffs and wage cuts will likely exert the longest- term impact and, consequently, affect child rights in the medium-term. The long-term effect of COVID-19 on jobs and wages will depend on developments in the pandemic and how governments react going forward. However, the economic hardship has not been temporary. Moreover, the ability of several governments in South Asia (Pakistan, India, Sri Lanka, Maldives and Bhutan) to respond is restricted by pre-existing burdens of public debt. These countries face public debt-to-GDP ratios of over 77 per cent, the threshold of debt beyond which the World Bank finds that the economic growth of developing economies is negatively impacted. This debt ratio further increased in 2020 (Figure 6).47 On the other hand, many, though not all, disruptions affecting products and services have been resolved. Financing, while important in thinking about how to further support MSMEs, does not have implications on child rights beyond related job or wage decisions made to manage cashflow. Finally, diversification of sales and delivery channels is likely to emerge as a fundamental shift in how business operate in the long-term, creating both opportunities and threats.
42 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 43 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 44 ADB, Impact of COVID-19 on MSMEs in Asia, September 2020 45 ADB, Social protection for informal workers in Asia, 2016 46 FICCI, MSME group health insurance penetration in India, 2017 47 World Bank, Finding The Tipping Point – When Sovereign Debt Turns Bad, 2013
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Figure 6: Public debt burdens across South Asia and East Asia Pacific
This study initially reviewed four child rights areas based on their potential links to the private sector and special significance to UNICEF’s work – nutrition, education, child protection and primary healthcare. UNICEF strives to correct inequities created by the persistent barriers of poverty and discrimination through the development of and investment in programmes, which, if successful, can benefit all people and children, as opposed to just the ‘lucky few’. These four child rights areas, if secured, will not only act as critical equalizers that benefit all children but can also drive the recovery of marginalized and disadvantaged groups more broadly. While other areas (e.g., WASH) are similarly important to UNICEF’s work and child rights, these were deprioritized for this study given the predominant influence of the public sector over business. Where highlighted by UNICEF country offices, some of these areas are discussed in the country chapters at the end of this report.
The evidence suggests that MSME responses to the economic crisis could exacerbate critical child rights issues, especially in the areas of nutrition, education, and child protection; these are explained in the following sections. The analysis focuses on the impacts that can be linked to MSME responses and refers to non-economic impacts of the COVID-19 pandemic (e.g., school closures, suspension of community services, absence of adequate social protection, etc.) where they exacerbate the economic conditions and vice versa.
Access to primary healthcare is expected to have been impacted predominantly due to reduced income levels, but evidence substantiating this impact is limited; other pandemic-related constraints to accessing healthcare were short-lived. Based on prior experience regarding the
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 25 relationship between income levels and access to healthcare in the regions, the COVID-19 pandemic is likely to have reduced access to primary healthcare. Strengthening public healthcare infrastructure is likely the appropriate solution for these prevailing affordability concerns. Other pandemic-related constraints to primary healthcare access involved the limited movement of medical supplies (medicines, vaccines and equipment) and staff. But, given the sector’s essential nature, governments prioritized the facilitation of unrestricted and safe movement of essential healthcare supplies and workers. These efforts largely contained the short-term disruptions. Additionally, since most COVID-19 responses were implemented through public hospitals/spaces, private providers were not particularly impacted by staff shortages. Reductions in demand, owing to mobility restrictions, were noted. However, as restrictions on essential movement eased, these impacts dissipated after the initial months.
Layoffs and wage cuts:
Regional evidence suggests that diminished household incomes are causing a rise in food insecurity and a reduction in the affordability of online education. There is already evidence that these effects are increasing stress in households and among children and adolescents. Specifically, 49 million additional people in South Asia, and 18 million additional people in East Asia are projected to be pushed into food insecurity by the end of 2020. An additional 6.2 million and 0.79 million children in South Asia are expected to suffer from wasting and stunting respectively in South Asia by the end of 2022 due to the economic impacts of pandemic48 (projections for East Asia Pacific are unavailable). Moreover, over 147 million children in South Asia and 80 million children in East Asia Pacific are unable to participate in the online learning necessitated by COVID-19 and school closures.
It is expected that lower income will have reduced access to treatment for endemic diseases and maternal and new-born healthcare, although evidence substantiating this impact is limited. Most countries in South Asia and many in East Asia-Pacific are characterized by high out-of-pocket healthcare expenditures. Moreover, recent national-level qualitative evidence indicates that there is increasing reliance on private healthcare in some countries. This suggests that families struggling with reduced household incomes likely faced difficulties in accessing treatment for endemic communicable diseases and maternal and new-born healthcare. While evidence substantiating this impact is scarce, evidence from the early months of the pandemic demonstrates that households with lower incomes faced greater difficulty in accessing healthcare during COVID-19, indicating that further reductions in income could have further reduced access: an assessment by the World Bank in April 2020 showed that in Nepal and Afghanistan, women in around 80 percent of the poorest households report that distance is a ‘big’ problem in using health services, while this is the case only for about 20 percent for the richest group in Nepal, and 40 percent in Afghanistan.49 Past evidence also establishes a direct linkage between household income level and the degree of access to healthcare services, especially for women. For example, an assessment by the WHO and OECD in 2018 shows that in Cambodia, Nepal, the Philippines, and the Solomon Islands, more than 75% of women with the lowest household income reported difficulties in accessing healthcare due to financial reasons, while in Nepal, Pakistan, and the Solomon
48 Osendap et al., The potential impacts of the COVID-19 crisis on maternal and child undernutrition in low and middle income countries, October 2020 49 World Bank, THE ECONOMIC IMPACT OF COVID-19 ON SOUTH ASIA, April 2020
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Islands, about 67% of women from worst-off households reported having unmet care needs due to distance.50
Evidence connecting the impact of COVID-19-induced household income loss to obesity, vaccination, workplace exploitation, vocational education and training is currently limited.
An absence of adequate social insurance and assistance systems could exacerbate and prolong the impact of the pandemic, therefore, governments in nearly all countries introduced measures to expand social insurance and assistance systems temporarily (refer to Chapter 6: Review of Mitigation Measures for details).
Disruption in products and services:
COVID-19 restrictions caused large scale logistical and transport-related disruptions in food supply chains during the height of the lockdown, and some disruptions, particularly those related to agriculture inputs and labour, have persisted. For example, during the height of the pandemic in Indonesia, social restriction-induced logistical disruptions affected food supply to many regions of the country – particularly the East – resulting in shortages of certain food types and increased food prices.51 Similarly, in China, nationwide travel restrictions resulted in labour, seed and fertilizer shortages, with one survey finding that 60 per cent of farmers were pessimistic about the planting season. Meanwhile, disruptions to local factories triggered a shortage of 1.3 million tons of phosphate fertilizers, or 40 per cent of annual consumption.52 A World Bank brief indicates that, while food insecurity is not currently driven by food shortages, disruptions in access to agricultural inputs and labour could reduce next season’s crop production. 53
The food price inflation caused by these disruptions persisted even as the disruptions started to ease, which further compounded the food security impact of income losses. These service disruptions, amongst other factors, likely contributed to the ~20% price inflation in staples observed across South and East Asia Pacific during the early months. However, these price impacts persisted even beyond the initial months of the pandemic, globally and in Asia. Globally, in August 2020, the prices of food products were on average 5.5 per cent higher than in August 2019. Food prices continued to climb in Asian economies towards the end of 2020 as well: FAO data showed that food prices in Asia rose to their highest level in nearly six years in November 2020. This increase in prices might have had a positive impact on net food producers, including farmers and other MSMEs in the supply chain, such as processors or aggregators. However, the majority of the population comprises net food consumers: although a considerable proportion of the regional population is engaged in agriculture, several of them are landless labourers and rural poor farmers who depend on markets for their food consumption. Hence, these net food consumers were not only facing food affordability constraints due to income losses, but also saw further deteriorations in their food security owing to rising food prices. The impacts
50 OECD and WHO, Health at a Glance: Asia/Pacific, 2018 51 Rahman, 2020, Pandemic disrupts food distribution across country, minister says 52 Financial Times, 2020, China’s farmers fear food shortages after coronavirus restrictions 53 World Bank, Food Security and COVID-19, November 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 27 were likely most severe for low-income households, for whom 60–70 per cent of expenditures are devoted to food.54
Disruptions to global and domestic supply chains, especially in highly specialized production lines, such as health and pharmaceutical products, were noted, however, they have been mostly contained due to the essential nature of the sector. Specifically, disruptions in the supply of active pharmaceutical ingredients (API) from China to India could increase the final prices of drugs, potentially impacting low-to-middle-income countries (LMICs) like Pakistan and Afghanistan, which are highly dependent on India for drug production.55 Similarly, increased production and export challenges faced by China and India, where production capacity fell to 30–75 per cent, may have resulted in reduced accessibility and availability of MNH products.56 However, expert interviews suggest that shortages in the availability of vaccines, essential medicines and medical supplies were not a constraint by the end of 2020. Similarly, disruptions to the operations of private healthcare providers were not reported.
Domestic disruptions may directly impact children’s access to education, mental health care and child protection services. As MSMEs struggled to operate, TVET students lost access to internship and apprenticeship opportunities, with a survey reporting that ~75 per cent and ~66 per cent of firm-level apprenticeships were disrupted in the Philippines and India, respectively.57 In another survey conducted by UNICEF across 100 countries, South Asia was amongst the regions with the highest number of countries reporting disruptions to child protection services.58
Recent evidence suggests that the impact of disruptions to products and services on child rights was largely short-term. While shortages in both food and healthcare supplies were reported during the height of the lockdown, these disruptions have by and large been contained. Experts indicated that some ongoing constraints on transportation could impact the ability of pregnant women to reach healthcare facilities. In addition, emerging examples suggest that small private schools may be struggling financially, limiting their operations, and the MSMEs continued financial struggles could prolong the reduction in apprenticeship opportunities.
Diversification of sales and delivery channels:
Digitization could drive a fundamental shift in how MSMEs operate, market and sell in the long run, which could both create opportunities to uphold child rights and engender child rights violations. Examples of MSMEs using their own or a partner’s digital channels to deliver food and provide primary healthcare and mental health services are emerging across countries, but national trends are not yet established. Although, there are concerning examples of marketing trends among food and beverage producers seeking to leverage the pandemic, evidence linking this behaviour to increased risks of obesity has not yet emerged.
Table 1 displays the anticipated impact of MSME economic choices on the four child rights areas. Data related to many of these impacts in the context of COVID-19 is still scarce, but they are often
54 ADB, Food Security and Poverty in Asia and the Pacific, 2012 55 UNAIDS, The impact of the COVID-19 response on the supply chain, availability and cost of generic antiretroviral medicines, July 2020 56 USAID, Maintaining maternal, newborn and child health commodity supply in the time of COVID-19 , June 2020 57 OECD, The Impact Of Covid-19 On Education, 2020 58 UNICEF, COVID-19 causes disruptions to child protection services in more than 100 countries, UNICEF survey finds, 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 28 substantiated by previous studies, experience in Asia and expert perspectives. Nonetheless, areas where actual observations suggest little evidence of a certain impact have been noted. Given the lack of data availability, even in instances where observed evidence is available, it is not necessarily of a scale sufficient to establish a regional view. The Annex includes a detailed view of the evidence.
Table 1: MSME actions impacting child rights issues
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Caregivers faced with livelihood loss Lack of access to agricultural inputs Digital platforms offer caregivers an are unable to afford adequate, and labour due to COVID-19 may alternate source by which to obtain food, nutritious food for children, impact next season’s production and, but those without access may face risks of especially for girls consequently, access to nutritious further exclusion food for children; the food price inflation caused by these disruptions were prolonged, compounding the food security impact of income losses Obesity Caregivers and children could Disruptions in food supply chains Children may be increasingly exposed to increase consumption of cheap, could reduce the availability and marketing and advertisement from processed food products affordability of perishable, nutritious producers of unhealthy food and snacks, food, causing consumption of less which may increase their calorie intake healthy options Child Protection Workplace exploitation Children may seek employment, even in hazardous workplaces, to alleviate financial distress at home Domestic violence Financial stress in households threatens to increase the prevalence of domestic violence experienced or witnessed by children Mental health / issues Loss of jobs and income threatens to Reduced access to mental health Online mental health services are increase household stress, depriving services, which were lacking to begin increasingly available and utilized, but those children of a conducive environment with, could further deprive at-risk without access face risks of further exclusion for development children of critical services Education Basic education / As families struggle to afford Disruptions to private education Delivery and uptake of digital education has education costs, children, especially providers as a result of COVID-19 increased through education technology girls, are at risk of falling behind in may impact children’s access to basic (EdTech) platforms, but efforts to make remote education and dropping out education these platforms widely accessible and completely from the system affordable are nascent Vocational Education The decrease in household income Interruptions to businesses and Training threatens to exacerbate the risk of operations result in fewer
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TVET students dropping out apprenticeship and internship completely from the system opportunities for TVET students, severely disrupting work-based learning Primary Healthcare Vaccination Caregivers could struggle to afford Primary healthcare providers faced the indirect costs of obtaining short term disruptions in vaccine vaccines, e.g., travel costs to supplies healthcare facilities and opportunity costs of time spent getting vaccines Endemic / communicable (for countries with high out-of-pocket Decreased availability of essential Caregivers with access to digital platforms disease treatment healthcare spending) drugs at primary healthcare centres have an alternate source of accessing Caregivers facing income loss may in the initial months limited access to treatment for their children, but those not be able to afford direct medical effective treatment for childhood without access face risks of further exclusion costs (in countries dependent on communicable diseases private healthcare) and indirect costs, including opportunity costs of time spent Maternal and / newborn (for countries with high out-of-pocket Decreased availability and increased Mothers with access to digital platforms healthcare (MNH) health spending) cost of MNH supplies in initial have an alternate source of accessing MNH, Households facing livelihood loss months limited access to MNH, but those without access face risks of further may not be able to afford direct especially in low-income segments exclusion medical costs (largely in the private sector) and indirect opportunity costs of time spent accessing MNH
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5. KEY MSME SECTORS AND POPULATIONS IMPACTED BY COVID-19
Objective: To identify the degree of impact across key sectors where MSME activity is prominent and to identify key vulnerable populations across sectors Key Takeaways:
• COVID-19 exerted a significant and sustained impact on key sectors where MSME activity is pronounced. In South Asia, readymade garments, construction, and wholesale & retail trade sustained significant and long-term impacts, while the sectors most impacted in East Asia Pacific were tourism and readymade garments • Across all sectors, women and informal workers faced outsized impacts, while youth unemployment was expected to be pronounced across the most affected sectors in each region • On the other hand, the ICT/e-commerce and the healthcare/pharmaceuticals sectors witnessed signs of growth in both regions due to COVID-19-induced demand, suggesting an opportunity for further growth and employment generation
Service sectors were the hardest hit in both South Asia and East Asia Pacific, with tourism being the most affected and showing signs of slow recovery. In March 2020, consumer services (including tourism), transportation, software services and industrial services in Asia Pacific experienced a substantial contraction in economic activity.59 The travel, tourism and hospitality sectors faced the most significant impact, owing to the sharp drop in international tourism amid prolonged movement restrictions. International tourist arrivals in Asia Pacific are estimated to have declined by 79 per cent between January and August 2020, with no signs of revival for key destinations in the third quarter of 2020 (
Figure 7).60 In November 2020, the World Travel and Tourism Council (WTTC) estimated employment loss of 48 per cent and GDP loss of 50 per cent in Asia Pacific, and suggested that, if the situation does not improve, these figures could increase to 59 per cent and 61 per cent, respectively.61 Experts have been more optimistic about recovery in domestic travel, with activity picking up in some countries (e.g., China and Thailand).62,63 The impact of COVID-19 on transportation services was also severe due to restrictions on the travel and movement of goods, additional safety protocols for workers and the temporary suspension of manufacturing activities at the height of lockdowns.64 In November 2020, experts forecasted a revenue loss of 20 per cent for the road transportation sector in Asia Pacific, with the loss expected to be even higher for passenger-based road transportation.65
59 IHS Markit, ASIA SECTOR PMI, April 2020 60 UNWTO, International Tourism AND COVID-19 Tracker 61 WTTC, Asia-Pacific Economic Impact from COVID-19, November 2020 62 Interview of expert from Pacific Asia Travel Association 63 UNWTO, Impact assessment of the COVID-19 outbreak on international tourism, October 2020 64 Abiad et al., The impact of COVID-19 on developing Asian economies, 2020 65 IRU, COVID-19 Impact on the Road Transport Industry – Update, November 2020
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Figure 7: 2020 trends in international tourist arrivals for tourism-dependent countries (Percentage change in monthly arrivals vs. same month in 2019) 66
Note the proportion of GDP represented by tourism at the bottom of the chart
COVID-19 restrictions resulted in temporary supply-side pressures on most manufacturing sectors, with consumer-facing sectors experiencing the worst impacts, but signs of recovery have appeared. At the onset of the pandemic (February–April 2020), lockdowns forced large-scale factory closures across both regions, restricting the supply of labour and inputs and severely impacting manufacturing production in most countries,67 except for China, where the manufacturing sector started showing signs of recovery in March 2020.68 The readymade garments, automotive, and electrical equipment manufacturing sectors were most impacted, suffering reductions of 55 per cent, 50 per cent, and 45 per cent in production, respectively, between December 2019 and April 2020.69 As governments began to relax restrictions, the manufacturing sectors in some countries, including India, China, Indonesia and Thailand, started to recover, recording an expansion in industrial output by October 2020.70 Since June, recovery has been relatively faster in automotive and electric equipment manufacturing, with production levels in September 2020 reaching close to pre-COVID-19 production levels. In the first half of 2020, major buying countries reduced imports from garment-exporting countries in Asia by 70 per cent.71 While the garment industry saw a reduction in such shortfalls over the last few months of 2020, a second wave of the pandemic in importing nations slowed recovery in countries such as Bangladesh and Sri Lanka.
66 UNWTO, International Tourism AND COVID-19 Tracker 67 IHS Markit, Global Manufacturing PMI at 11-year low in April as only China reports growth, May 2020 68 WEF, Here’s how coronavirus has affected Asia’s factories, Apr 2020 69 UNIDO, Statistical Portal (based on monthly Index of Industrial Production) 70 Trading Economics, Manufacturing PMI, 2020 71 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020
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While the agriculture sector faced COVID-19-induced supply-side challenges, it has been relatively less impacted due to high demand for essential food items and government interventions. However, given the high contribution of the sector to employment in both regions, even a modest negative economic impact could drive significant job loss. Lockdown restrictions at the onset of the pandemic impacted the movement of agricultural labour, access to farm inputs and operations at port facilities, thus disrupting agricultural supply chains and creating acute food shortages. The immediate impact of COVID-19 on demand varied by the food type, with staple crops believed to have witnessed a rise in demand due to panic buying, while perishable crops faced lower demand, perhaps due to a preference for cheaper food among households suffering from income loss and disruptions in the food services industry.72 The immediate food shortages were, by and large, contained, as governments rushed to reduce the impact on food supply chains by taking measures, such as providing financial support, access to credit, or special exceptions for the movement of agricultural labour and goods.73 However, a brief by ADB suggests that challenges related to the availability of agricultural inputs and labour have persisted. This could impact crop production in the coming season.74 Although the economic impact on the agriculture sector is not expected to be as high as on services or manufacturing, even modest negative impacts could result in disproportionately high job loss as the sector is the biggest employer in both regions.75 While estimates for overall job losses in the sector are not available at the regional level, the ILO projected the sector to be the biggest contributor to COVID- 19-related youth job losses in Pakistan (33.3 per cent of total youth job losses), Bangladesh (22.9 per cent of total youth job losses), India (28.8 per cent of total youth job losses) and Lao PDR (22.4 per cent of total youth job losses).76
Box 1: The impact of COVID-19 on key vulnerable segments
Across sectors, the COVID-19 pandemic has often exerted a disproportionate economic impact on women, informal workers and youth.
72 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic, June 2020 73 FAO, The impact of COVID-19 on food and agriculture in Asia and the Pacific and FAO’s response, September 2020 74 World Bank, Food Security and COVID-19, November 2020 75 ILO, ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, August 2020 76 ILO, ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, August 2020
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The economic impact of COVID-19 is expected to widen the gender-poverty gap.77 • In many countries, women are overrepresented in the sectors and industries most affected by the pandemic. The garment industry remains a key employer of women in major exporting nations: Women the share of the garment industry in female employment is ~18 per cent in Cambodia (vs. ~11 per cent across genders in the country), ~15 per cent in Pakistan (vs. ~8 per cent across genders in the country), ~15 per cent in Sri Lanka (vs. ~7 per cent across genders in the country) and ~11 per cent 78 in Myanmar (vs. ~5 per cent across genders in the country). Additionally, ~8 per cent of women in East Asia Pacific work in accommodation & food services, another sector that was severely hit by COVID-19. • There are pre-existing differences in resilience between businesses owned/run by men and those owned/run by women. In the Global State of Business study conducted by Facebook, women-led small businesses in East Asia Pacific reported higher closure rates (22 per cent) at the 79 height of the lockdown (May) than men-led small businesses (16 per cent). It is expected that this is partially because there are gender gaps in access to finance – 58 per cent of women entrepreneurs 80 lack access to finance in East Asia Pacific (vs. 42 per cent of men entrepreneurs). Similarly, in South Asia, access to finance challenges are more commonly faced by women-owned MSMEs – e.g., 23– 28 per cent of women-owned micro enterprises cite access to finance as a major or severe constraint vs. 16–19 per cent of men-owned micro enterprises.81 • The burden of domestic responsibilities fell disproportionately on women workers and leaders during the pandemic. The burden of unpaid care and domestic work increased significantly for women due to the pandemic, with rising responsibilities of caregiving of children and sick or elderly family members. In a survey of small businesses, 23 per cent of female leaders reported spending six hours or more per day on domestic responsibilities, while only 11 per cent of male leaders reported the same.82
Informal workers have struggled more because they typically lack access to employment protection and social assistance and are disproportionately comprised of vulnerable populations such as youth, rural populations and women. • Informal workers are more vulnerable to job and wage losses due to their lack of access to social assistance and employment protections. Within South Asia’s overall informal sector, 44 per cent of those employed in December 2019 were no longer employed by April 2020, with a higher unemployment rate of 57 per cent recorded amongst informal wage workers.83 Specifically, urban informal workers were at greatest risk due to their involvement in high-contact jobs, including transport, food, retail and tourism, which are easily disrupted by movement restrictions.84 In South- East Asia, the ILO estimated that COVID-19 threatened the livelihood of 218 million workers in the informal sector.85 Government programs do not typically support informal enterprises, and workers employed in the informal sector are typically ineligible for employment protection and social assistance.
• The informal sector employs 68.2 per cent of the population in Asia-Pacific, disproportionately employing some of the most vulnerable groups. Informal employment is Informal more common in rural areas (85.2 per cent of employment) than in urban areas (47.4 per cent of workers employment) and among youth aged 15–24 years (86.3 per cent of employment) than among adults over 25 (67.1 per cent of employment). It is particularly prevalent in the agriculture sector (94.7 per
cent of employment). 87.8 per cent and 75.2 per cent of the populations in South Asia and Southeast
Asia and the Pacific, respectively, is employed in the informal economy. From a gender perspective,
while in South-East Asia and the Pacific and South Asia, women are more likely to be in informal
77 UN Women, COVID-19 and its economic toll on women, September 2020 78 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 79 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 80 ADB, Innovative Financial Products and Services for Women in Asia and the Pacific, April 2020 81 IFC, GPFI, Strengthening Access to Finance for Women-Owned SMEs in Developing Countries, 2011 82 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 83 World Bank, Beaten or Broken?, 2020 84 World Bank, Beaten or Broken?, 2020 85 UN, The Impact of COVID-19 on South-East Asia, July 2020
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employment than men, in East Asia men are more likely to be in informal employment than women. Own-account workers and contributing family workers are predominantly informally employed.86 • In recent years, in light of these outsized vulnerabilities of the informal sector, there has been considerable dialogue in the global community around supporting informal MSMEs and workers transition to the formal sector, as well as around better regulating and standardizing informal sector employment. COVID-19 has a shown a light on the criticality of these discussions.
The crisis is expected to increase the prevalence of youth unemployment in the regions, as the key
sectors that generate youth employment have sustained severe losses.
Figure 8: Distribution of job losses among youth in 2020 due to COVID-19 across sectors
Youth
The analysis below assesses the impact of COVID-19 on key sectors, identified in alignment with the UNICEF regional teams. These sectors align with the ILO’s typology of sectors. Tourism is not considered as a separate sector, but tourism-related activities fall under multiple sectors, including accommodation & food services and transportation & storage. Regional and national reports have been used to develop a high-level regional view of the magnitude of impact and the timeline for recovery in the sectors (Box 2). The sectors have been categorised based on the scale below:
• Severe and sustained impact: In most countries where this sector is prominent, it experienced significant, negative, COVID- 19-related economic effects that lasted beyond the initial lockdown phase (April 2020) • Mixed impact: In some or most countries where this sector is prominent, it experienced significant negative economic effects, however, recovery signs were noted after the initial lockdown phase (April 2020) • Minor or positive impact: In most countries where this sector is prominent, it saw minimal negative effects or even growth
Box 2: Impact of COVID-19 on key sectors
Note: All employment contribution estimates are pre-COVID-19 Sector87 South Asia East Asia Pacific Manufacturing contribution to total employment: 13 per contribution to total employment: 18 per cent cent
86 ILO, Women and men in the informal economy, May 2018 87 Employment figures based on the latest estimates available from ILO (various years); all estimates are pre-COVID
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Share of own- contribution to female employment: 13 per contribution to female employment: 20 account workers cent per cent and firms with ------less than 10 Impact of COVID-19 on RMG and textile: Impact of COVID-19 on RMG and textile: employees: 34 per Severe and sustained impact Severe and sustained impact cent • Major exporting nations, including Sri Lanka, • All major exporting nations, China, Cambodia, Pakistan, Bangladesh and India, saw significant Indonesia, Vietnam and the Philippines, losses in export revenues in H1 2020, with slow experienced significant export losses in H1 recovery 2020, however, the timeline of impact has - Bangladesh, the second largest exporter of RMG, varied. is expected to have lost ~USD 6B due to the drop - In China, by June 2020, YTD garment imports in global demand.88 By June 2020, YTD garment from the country fell by ~40 per cent imports from the country fell by 32 per cent compared to the same period in 2019.98 compared to the same period in 2019.89 The However, China’s textile exports in totality industry was also affected by its high reliance on increased by 32.4 per cent in H1 2020,99 with China for the import of inputs. Shipments saw exports of facemasks soaring by over 700 per modest growth in August and September, but the cent.100 second wave of the pandemic in western markets - Imports from Indonesia and Vietnam saw slowed recovery in November.90 minimal impacts until March 2020.101 - In Pakistan, by June 2020, YTD garment imports - By June 2020, YTD garment imports from from the country fell by 20 per cent compared to Indonesia and the Philippines fell by ~25 the same period in 2019.91 Textile exports per cent and ~40 per cent, respectively, increased by 4 per cent YoY between July and compared to the same period in 2019.102 October 2020.92 - By June 2020, YTD garment imports from - In Sri Lanka, the apparel industry is believed to both Vietnam and Cambodia fell by ~20 per have lost USD 1.5 billion worth of orders between cent compared to the same period in 2019.103 March and June 2020,93 owing to reduced demand from the USA, which accounts for >75 per cent of its exports.94 By June 2020, YTD garment imports from the country fell by ~40 per cent compared to the same period in 2019.95 By October 2020, cumulative export earnings from apparel and textiles declined by 21 per cent YoY. EU, Japan and US imports of masks from Sri Lanka rose by 700 per cent in H1 2020, however this did not fully offset the drop in garment orders.96 - By June 2020, YTD garment imports from India fell by 41 per cent compared to the same period in 2019.97 ------Impact of COVID-19 on pharmaceuticals: Impact of COVID-19 on pharmaceuticals: Minor or positive impact Mixed impact • India is the largest producer of generic • China is the largest producer of APIs in the drugs in the world. Despite disruptions in world. At the beginning of 2020, disruptions to China’s Active Pharmaceutical Ingredients China’s API supply significantly affected (API) supply, the pharma industry in India,
88 ORF, Bangladesh: COVID-19 badly impacts garment industry, Apr 2020 89 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 90 Bangladesh Garment Manufacturers and Exporters Association 91 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 92 Pakistan Today, Textile exports rise 6pc YoY to $1.3bn in October, November 2020 93 UNESCAP, COVID-19 and South Asia, June 2020 94 UN SDG, The Impact of COVID19 on the MSME Sector in Sri Lanka 95 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 96 Sri Lanka Apparel, Apparel industry hails budget; confident of recovery from 2021, November 2020 97 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 98 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 99 CGTN, China's imports and exports rebound in June as recovery gains momentum, Jul 2020 100 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 101 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 102 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 103 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020
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which imports 84 per cent of its APIs from pharmaceutical production globally.109 Greater China, is expected to have seen overall increases in new orders for pharmaceuticals revenue growth in 2020.104 India’s pharma were reported in August 2020 vs. July 2020.110 exports increased by 15 per cent YoY for • In the Philippines, local pharmaceuticals April–September 2020.105 Pharma was one suppliers and manufacturing units are expected of the sectors where hiring was least to benefit, as the government of India has impacted due to COVID-19.106 urged Indian pharmaceutical companies to • In Pakistan, overall sales in the establish manufacturing units in the Philippines pharmaceuticals sector for the financial to meet rising regional demand due to COVID- year ending in June 2020 recorded 9 per 19. cent growth over the previous year, with • In Thailand, domestic sales of medicines in Q1 the highest sales recorded in March 2020107 2020 increased by 7.5 per cent YoY, but exports and a projected growth rate of >10 per of medicines declined in value by 11.3 per cent cent for 2020–2021108 YoY, and over the whole of 2020, the value of • In Bangladesh, 51,000 new jobs are pharmaceuticals distributed to the domestic estimated to have been created in 2020 in market was projected to grow at a slower rate the factories that manufacture medical than it did in 2019 because of fewer domestic goods and pharmaceutical products.268 and international patients seeking treatment in Thai hospitals.111 Construction contribution to total employment: 11 per contribution to total employment: 7 per cent cent Share of own- contribution to female employment: 3 per contribution to female employment: 1 account workers cent per cent and firms with ------less than 10 Impact of COVID-19: Severe and sustained Impact of COVID-19: Mixed impact employees: 64 per impact • In East Asia Pacific, the impact on the cent • The construction sector in India, Nepal, construction sector is mixed, with many South Bangladesh and Pakistan is expected to have East Asian countries expected to struggle contracted in 2020, resulting in severe job losses. - In Q1 of 2020, Thailand witnessed the largest - India’s construction sector, where migrant contraction (9.9 per cent), followed by workers make up a large portion of the workforce, Malaysia (7.7 per cent), Singapore (4 per saw a 2.2 per cent contraction in Q1 of 2020112 cent) and the Philippines (3.4 per cent), while and is expected to have faced daily losses of USD Vietnam and Indonesia experienced growth 4.1 billion with project investments declining by of 4.4 per cent and 2.9 per cent, up to 30 per cent.113 Furthermore, the sector respectively.117 slowdown is expected to reduce construction- - For 2020 as a whole, Vietnam’s construction related employment by 11–25 per cent compared sector is expected to record 5.5 per cent 118 to pre-crisis projections for FY 2021. growth. - Similarly, the construction sector in Bangladesh, - Despite a 16.3 per cent contraction in January which employs ~3.5 million workers, potentially and February, China’s real estate lost ~USD 400 million in 2020, faced suspensions development investments rose by 7 per cent of major infrastructure residential and commercial in April as it resumed 90 per cent of its key projects114 and witnessed job losses of up to 30 projects, including 97 per cent of its major per cent in 2020.115 highway and waterway projects and 87 per 119 - In Pakistan, an estimated 4.2 million people were cent of its airport projects. laid off by May 2020 in construction.116
104 Mabiyan, Pharmaceutical industry expected to see positive growth this year: Charu Sehgal, Deloitte India, May 2020 105 IBEF, Indian Pharmaceutical Industry, 2020 106 Naukri, A report on hiring activity in India, November 2020 107 The News Pakistan, Pharma sales up 9pc to Rs453.5bln in FY20, August 2020 108 FitchSolutions, Uncertainties Surrounding Pharmaceutical Pricing In Pakistan To Diminish, October 2020 109 Healthcare Asia, China's API supply disruption worries pharma companies, 2020 110 CGTN, China's August manufacturing PMI sees minor slip affected by floods, August 2020 111 Krungsi Research, Thailand Industry Outlook – Pharmaceuticals, May 2020 112 Global Data, South and Southeast Asia’s construction industry set to contract by 4.3 per cent in 2020, 2020 113 Moneycontrol, Construction sector facing daily loss of Rs 30,000 crore; investments in projects to fall 13-30 per cent: KPMG, 2020 114 Dhaka Tribune, The woes of the construction sector and its ancillary industries, 2020 115 a2i, Post COVID-19 Jobs and Skills in Bangladesh, 2020 116 Pakistan Worker’s Federation, COVID-19 and World of Work, May 2020 117 Global Data, South and Southeast Asia’s construction industry set to contract by 4.3 per cent in 2020, 2020 118 Global Data, Vietnam construction industry output set to grow by 5.5 per cent in 2020, Nov 2020 119 Lescohier, Asia Pacific: Fighting to recover from Covid-19, 2020
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- The sector is expected to have been a significant driver for youth unemployment due to COVID-19 in India, Nepal and Pakistan, because it is a large provider of new jobs for youth ( - Figure 8) Wholesale & retail contribution to total employment: 11 per contribution to total employment: 16 per trade120 cent cent contribution to female employment: 5 per contribution to female employment: 19 Share of own- cent per cent account workers ------and firms with Impact of COVID-19: Severe and sustained Impact of COVID-19: Mixed impact less than 10 impact • In East Asia Pacific, due to earlier relaxation of employees: 70 per • Strict mobility restrictions in most countries led to restrictions in some countries (Vietnam, cent partial or full closures of retail stores, causing Thailand, Malaysia and Cambodia), stores significant job losses across countries. started to open in May with social distancing - In India, as of May 2020, only 7–8 per cent of measures modern retail was operational and an estimated • The sector is expected to have been a key 1.5 million people were affected due to layoffs, contributor of youth unemployment due to wage cuts and unpaid leave.121 COVID-19 in Indonesia, the Philippines and - The retail trade sector is expected to have been a Fiji (Error! Reference source not found.), w key driver of youth unemployment due to COVID- here relatively strict restrictions were still in 19 in Nepal, Pakistan and Sri Lanka ( place until May. - Figure 8) as the sector is a large provider of new jobs for youth. - In Pakistan, an estimated 6 million people were laid off by May 2020 in wholesale trade.122 Accommodation & contribution to total employment: 2 per cent contribution to total employment: 5 per food services contribution to female employment: 1 per cent cent contribution to female employment: 7 Share of own- ---- per cent account workers Impact of COVID-19: Mixed impact ---- and firms with • The sector is expected to struggle in countries with Impact of COVID-19: Severe and less than 10 high tourist footfall – the Maldives and Sri Lanka. sustained impact employees: 59 per - The sector is expected to have been a key driver • Due to a sharp decline in tourism, the sector is of youth unemployment due to COVID-19 in Sri cent expected to struggle until international tourism Lanka ( resumes. - Figure 8). - The sector is expected to have been a - Lockdown measures in India continued to limit significant driver for youth unemployment food service operations as of June 2020, while in due to COVID-19 in Mongolia, Cambodia, Sri Lanka, all restrictions on food services were the Philippines, Vietnam and Lao PDR ( 123 lifted. - Figure 8). - In Pakistan, an estimated 1.2 million people were - In June 2020, Food Industry Asia estimated a laid off by May 2020 in accommodation & food positive outlook for recovery in food services 124 services. across China, Malaysia and Vietnam because all food services there (dine in, takeaway and delivery) were allowed to operate as usual, while Indonesia and the Philippines still had restrictions in place.125
Agriculture contribution to total employment: 42 per contribution to total employment: 27 per cent cent Share of own- contribution to female employment: 57 per per cent contribution to female account workers cent employment: 24 per cent
120 ILO estimates for employment also include ‘repair of motor vehicles and motorcycles’ in this category 121 JLL, COVID-19 impact and implications on Asian retail sector, May 2020 122 Pakistan Worker’s Federation, COVID-19 and World of Work, May 2020 123 Food Industry Asia, COVID-19 Food & Beverage Impact: Monitoring Update, June 2020 124 Pakistan Worker’s Federation, COVID-19 and World of Work, May 2020 125 Food Industry Asia, Food & Beverage Impact, June 2020
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and firms with ------less than 10 Impact of COVID-19: Mixed impact Impact of COVID-19: Mixed impact employees: 85 per • Widespread lockdowns, especially in March and • Agriculture could be a significant driver of cent April 2020, caused major disruptions across the youth unemployment in some countries - Lao agriculture supply chain.126 However, the sector saw PDR (22 per cent), Thailand (17 per cent), a rise in demand for staple crops. Indonesia (16 per cent) and the Philippines - Despite relatively lower economic impact on the (15 per cent)127 sector, the ILO estimated it would contribute • The impact of COVID-19 resulted in an ~3.1 significantly to unemployment among youth in per cent reduction in agricultural production in India, Bangladesh and Pakistan ( the first quarter of 2020 in Southeast Asia, - Figure 8) due to its high contribution to which translates to a 1.4 per cent fall in GDP employment in South Asia. (USD 3.76 billion), including a loss of USD 2 billion in Indonesia alone.128 • In the Philippines, mobility restrictions reduced availability of farm labour and contracted the agricultural labour force, which is expected to have reduced agricultural production by ~3 per cent in first quarter of 2020.129 Transportation and contribution to total employment: 6 per cent contribution to total employment: 5 per storage contribution to female employment: <1 per cent cent contribution to female employment: <1 Share of own- ---- per cent account workers Impact of COVID-19: Mixed impact ---- and firms with • As countries slowly ease restrictions, transportation Impact of COVID-19: Mixed impact less than 10 activity is expected to pick up. • During the peak of the crisis in South East Asia, employees: 50 per - As of June 2020, approximately 2 million jobs in cross-border freight continued to flow despite the transportation sector were lost in India, with 135 cent lockdown measures. Across Asia Pacific, lockdowns keeping 95 per cent of vehicles off the transport activity generally picked up to pre- 130 road. COVID-19 levels once lockdowns were eased.136 - In Bangladesh, 0.7 million workers in public • The impact on East Asia Pacific’s aviation transportation are expected to have lost jobs, and industry (excluding China) was significantly over 0.5 million drivers employed with ridesharing high, with projected revenue losses of over apps are expected to have lost jobs. Workers were USD 71.4 billion in 2020, putting ~8.1 million expected to be re-employed once lockdowns jobs at risk.137 relaxed.131 - South-East Asia accounted for over 88.4 per - In Pakistan, an estimated 1.9 million people were cent of at-risk jobs in the region, with laid off by May 2020 in transport and Indonesia and Thailand having the highest 132 communication. number of aviation-linked, at-risk jobs. • Six major South Asian countries were expected to - However, in China, where restrictions were face aviation revenue loss of ~USD 16 billion in eased early, domestic aviation steadily 2020, potentially impacting close to 4 million recovered, with domestic passenger flights in jobs.133 September 2020 exceeding pre-COVID-19 • Railway transportation in India was impacted levels in 2019 by 3.5 per cent.138 severely as all passenger trains and metros were In East Asia Pacific, public transportation was fully suspended in March 2020. Since May 2020, train or partially suspended across countries, including services have slowly resumed. Public bus operations China, Indonesia and the Philippines.
126 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic, 2020 127 ILO, ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, August 2020 128 Gregorio & Ancog, Assessing the Impact of the COVID-19 Pandemic on Agricultural Production in Southeast Asia: Toward Transformative Change in Agricultural Food Systems, 2020 129 Gregorio and Ancog, Assessing the Impact of the COVID-19 Pandemic on Agricultural Production in Southeast Asia, 2020 130 The Economic Times, COVID-19 has led to 20 lakh job losses in bus, taxi sector; more on anvil: Industry Body, June 2020 131 a2i, Post COVID-19 Jobs and Skills in Bangladesh, 2020 132 Pakistan Worker’s Federation, COVID-19 and World of Work, May 2020 133 IATA, COVID-19 Impact on Asia-Pacific Aviation Worsens, 2020 135 UNESCAP, The Impact of COVID-19 on South-East Asia, July 2020 136 ADB, Guidance Note on COVID-19 and Transport in Asia and the Pacific, July 2020 137 IATA, COVID-19 Impact on Asia-Pacific Aviation Worsens, 2020 138 Reuters, UPDATE 1-China's domestic flight numbers top pre-COVID-19 levels in Sept, Oct 2020
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in major cities also partially resumed starting in May 2020.134 Healthcare139 contribution to total employment: 1 per cent contribution to total employment: 2 per contribution to female employment: 3 per cent Share of own- cent contribution to female employment: 4 account workers Impact of COVID-19: Minor or positive per cent and firms with impact Impact of COVID-19: Minor or positive less than 10 • Government financial actions that focused on the impact employees: 21 per healthcare sector and increased adoption of digital • Remote healthcare consultations increased cent health have driven growth in the sector significantly across several countries during - In Bangladesh, the eHealth service industry lockdown compared to pre-COVID-19 levels – witnessed increased demand. Furthermore, 600 per cent in Malaysia, 350 per cent in governments have taken actions to drive adoption Thailand, 360 per cent in Vietnam, 290 per of online healthcare during the pandemic. cent in Indonesia, and 200 per cent in the Consequently, the sector is estimated to have Philippines. They remained higher than pre- created 20,000 new jobs in 2020.140 COVID-19 levels even after the lockdown - In India, the government reimbursed COVID-19 lifted.143 testing costs in private labs for 500 million • China, Indonesia, Malaysia, the Philippines 141 people. Healthcare was one of the sectors and Vietnam have injected significant where hiring was the least impacted due to additional financial resources into the health COVID.142 sector.144 ICT and e- contribution to total employment: NA contribution to total employment: NA commerce contribution to female employment: NA contribution to female employment: NA ------Share of own- Impact of COVID-19: Minor or positive Impact of COVID-19: Minor or positive account workers impact impact and firms with • As companies and employees have transitioned to • Southeast Asia is projected to have seen a 63 less than 10 remote work models, demand for IT services has per cent increase in e-commerce gross 147 employees: NA increased. merchandise value between 2019 and 2020. - In Bangladesh, ~10,000 jobs are estimated to • COVID-19 is expected to have accelerated have been created in IT and tech companies.145 growth in the e-commerce sector in South- - In India, IT was one of the sectors where hiring East Asia, as 40 million people came online for was the least impacted due to COVID-19.146 the first time. The internet sector in the region continued to see growth in 2020.148
134 World Conference on Transport Research Society, Impacts of COVID-19 on the Transport Sector, September 2020 139 Employment estimates based on ‘Human health and social work activities’ in ILO data 140 a2i, Post COVID-19 Jobs and Skills in Bangladesh, 2020 141 UNESCAP, Social protection response to COVID-19, September 2020 142 Naukri, A report on hiring activity in India, November 2020 143 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 144 UNESCAP, Social protection response to COVID-19, September 2020 145 a2i, Post COVID-19 Jobs and Skills in Bangladesh, 2020 146 Naukri, A report on hiring activity in India, November 2020 147 Al Jazeera, Buy now! COVID-19 sparks Southeast Asian e-commerce boom, November 2020 148 Google, e-Conomy SEA 2020, November 2020
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6. REVIEW OF MITIGATION MEASURES
Objective: To identify key measures that MSMEs and other ecosystem actors can take to mitigate the negative child rights outcomes of MSME responses to the COVID-19 crisis and to conduct a high-level review of the degree of activity across possible measures Key Takeaways: • The most widely implemented mitigation measures were government actions to provide financial support to MSMEs, support employment retention (primarily through wage subsidies) in businesses (including in MSMEs), provide financial assistance and transfers to workers and, in some cases, support digitalization and upskilling efforts in the MSME sector • However, these measures did not adequately reach enterprises and workers in the informal sector and were often temporary or insufficient. In particular, limited efforts were made to expand the coverage of fundamental social security and employment-related insurance (e.g., pensions and health insurance) in the informal sector • Moreover, government responses did not typically take a child rights lens, with limited action to expand child- centric policies such as parental leave, workplace breastfeeding policies or regulations curbing the marketing of unhealthy food for children • MSMEs, primarily concerned with financial survival, were seen to make few proactive efforts to protect employees, including caregivers, and to respect child rights
COVID-19 has exacerbated the consequences of MSMEs’ failure to acknowledge their impact on child rights, necessitating efforts from other ecosystem actors to drive greater accountability among MSMEs and ensure that the broader system responds to business-related impacts where MSMEs cannot be expected to. As described in the impact analysis, COVID-19 has driven MSMEs to respond in ways that have adversely impacted children in the short- and long-term. However, COVID- 19 has also exposed and aggravated the underlying pre-existing gap in recognition by MSMEs and other stakeholders of the indirect links between MSME actions and child rights. Beyond very direct violations of child rights (e.g., child labour or trafficking, which are particularly widespread in some countries), MSME understanding of their role in upholding child rights remains low. Deregulation, used to increase competition and catalyse markets, has further eroded MSMEs’ accountability to labour rights and basic workplace protections. To achieve change at scale, other ecosystem actors –governments, investors, regulators and employees – need to both support MSMEs and hold them accountable.
Thus, while this chapter analyses gaps in mitigation measures through the lens of MSMEs and COVID-19, it also discusses the role of other actors in enabling, enforcing and monitoring MSME behaviour. These ecosystem actors can not only encourage MSMEs to rise to the immediate challenges created by COVID-19 but also drive MSMEs to make fundamental changes in the way they operate, in service of child rights.
MSME actions alone cannot fully mitigate the severe economic impacts of COVID-19 on vulnerable populations; government action in the form of short-term support to MSMEs and long-term social insurance and assistance will be key to supporting incomes as MSMEs struggle. Even before the pandemic, mechanisms for social insurance and assistance did not provide sufficient coverage to vulnerable populations, especially informal workers. As a result, these segments are bearing the brunt of the economic crisis. As MSMEs struggle to retain and pay their workers, it is crucial to
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 41 strengthen the social insurance and assistance systems to safeguard the incomes of the most vulnerable households, and, thereby, safeguard the well-being of their children.
MSMEs and other actors could take several actions to directly and indirectly protect child rights in a sustainable manner. In the figure below, (A), (C) and (D) are foundational to protecting child rights. MSMEs can also make philanthropic contributions, which have not been included in the scope of this study.
The potential measures outlined below incorporate the foundational principles of ‘state duty’ and ‘corporate responsibility’ to protect human rights as outlined in the UN Guiding Principles for Business and Human Rights. Category C below addresses ‘state duty’, covering policies and legislation that states must enact to ensure that ecosystem actors, including MSMEs, do not violate human rights, such as through employment and wage protection policies covering all businesses. Category A addresses ‘corporate responsibility’, wherein MSMEs must refrain from infringing on human and child rights through their internal operations (e.g., by eliminating child labour risks or securing the jobs of caregivers in accordance with labour laws), as well as through the products and services they deliver (e.g., by curbing the marketing of unhealthy food for children).
The third pillar of the UN Guiding Principles – access to judicial or legislative remedy in the case of rights violations by businesses – has less explicit relevance to this study. While access to remedy implicitly forms a part of state obligation to protect workers, this study does not explicitly focus on this pillar in the context of COVID-19.
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Figure 9: Potential direct and indirect measures for safeguarding child rights in the context of COVID-19’s impact on business
MSME Led Other Ecosystem Actor Led
A. Respecting and C. Protecting workers D. Extending social supporting human assistance and child rights B. Providing financial Implement policies and support to MSMEs measures to protect Scale up social Implement standards and employment and wages, assistance and benefits Provide lending, policies that ensure that and promote family- horizontally, increasing financial/tax and other businesses do not harm friendly workplaces in coverage, as well as relief to MSMEs the rights of children both MSMEs and large vertically, increasing the and their families, and [government, large businesses value and duration of enable family-friendly companies] benefits workplaces during and [government, large after the pandemic companies] [government]
E. Adopting inclusive business F. Influencing the ecosystem G. Providing structural models support to MSMEs Use voice and relationships to Develop business models to achieve mainstream child rights Help MSMEs adopt new working both commercial viability and considerations into practices and methods and technologies so they development impact by serving policies of other ecosystem actors can continue operations and families that live at the base of the [MSMEs, government, large companies, maintain workforces economic pyramid industry associations, NGOs] [government, large companies, NGOs] [MSMEs] Note: Social protection has been split into its social insurance and social assistance components. ‘C. Protecting workers’ covers social insurance mechanisms aimed at safeguarding the livelihoods of specific groups within the labour force during economic shocks, as well as the provision of other employment-related benefits falling under the purview of family friendly policies. ‘D. Extending social assistance’ covers broader income support programs, such as in-kind or cash transfers and subsidies for food and public utilities, targeted toward poorer segments, even outside employment structures.
While there is momentum in adoption of government measures that protect child rights, adoption of more proactive measures by other ecosystem players is still in its nascency. Opportunities exist for MSMEs and other actors to support caregivers and promote child well- being during and beyond COVID-19.
(A) Respecting and supporting human and child rights: Due to their deep financial struggles, MSMEs have taken only limited proactive actions, except for in a few countries and sectors, to protect worker employment and wages or adopt family-friendly policies in light of COVID-19.
(B) Providing financial support to MSMEs: Governments across both the regions have deployed significant measures to enhance the credit and liquidity of MSMEs. Measures, such as new lending, temporary flexibilisation of loans, tax relief/deferral and business cost reduction, were most deployed. A key challenge has been making sure that these policy measures reach MSMEs.
(C) Protecting workers: To protect the employment rights of workers, governments in most countries have also provided MSMEs and large businesses with employment retention support, primarily through wage subsidies. Governments in some countries have also issued mandates or advisories for employers to prevent layoffs and promote payment of partial or full wages/bonuses. However, these measures mostly only benefit formal sector workers. Meanwhile, in both regions, a significant proportion of
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 43 business activity takes place in the informal sector where fundamental protections mandated by law are often not upheld for vulnerable workers and their dependents. MSMEs tend to be concentrated in the informal sector, and because, in light of the pandemic, financial survival has assumed primary importance, actions to protect child rights have been deprioritized or infeasible.
(D) Extending social assistance: As part of the fiscal response to COVID-19, governments in both regions have taken unprecedented actions to expand social assistance, in an attempt to cover the ‘missing middle’. These interventions have varied, based on their relationship with existing programs (vertical vs. horizontal expansion), their nature, their duration and the beneficiaries they target. However, challenges related to the level of support and gaps in coverage persist. Additionally, most measures have been temporary.
(E) Adopting inclusive business models: While MSMEs have adapted their business models in response to immediate COVID-19-related disruptions in essential products and services, efforts to further adapt to expand access to vulnerable populations or support economic recovery have not been widely implemented.
(F) Influencing the ecosystem: International agencies, worker organizations and employer associations have actively lobbied and advocated for additional stimulus packages for MSMEs, stronger protections of worker rights and further expansion of social safety nets to be more inclusive of vulnerable groups. However, there is limited observed effort by MSMEs or many other actors, especially in the private sector, to mainstream child rights considerations in the economic recovery.
(G) Providing structural support to MSMEs: Governments in some countries, most notably in China, implemented policies to accelerate digitization of MSMEs and support the skilling and redeployment of laid off workers.
Across all intervention types, the most substantial activity has taken the form of support for broad-based economic recovery, but this support has rarely employed a child rights lens. Across all mitigation measures where emerging or substantial activity has been noted by various ecosystem actors, the primary focus has been on aiding the economic recovery of MSMEs, workers and the broader economy through measures like credit provision, employment protections, and wage subsidies. While these measures do indirectly impact child rights by reversing upward trends in child poverty, limited explicit focus has been placed on integrating child rights considerations into the economic activity supported by these measures.
Inclusive business models comprise a second set of emerging activities that can more directly link to child rights, but they also have not explicitly targeted children in most cases. The rise of business models that facilitate online delivery of food or healthcare do impact children, but most fail to consider their specific needs.
Possible mitigation measures that directly impact child rights have gained less momentum. Some observed activity, both before and during the COVID-19 pandemic, such as the provision of parental leave or the ramping up of due diligence around child labour, explicitly tie into child rights, but these areas have not spread. Issues that are almost exclusively tied to child rights have either seen limited
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 44 momentum (such as increasing child inclusion in digital education and EdTech, which have played a significant role in education delivery during COVID-19) or have seen nearly no activity at all (such as in the case of prohibiting the marketing of unhealthy foods for children).
This lack of an explicit focus on children’s rights in emerging mitigation measures amplifies the need for actors like UNICEF to work across the business ecosystem to infuse a fundamental child rights consciousness during and beyond the COVID-19 pandemic.
The following analysis presents a high-level regional view of the most critical gaps in mitigation measures across child rights areas. Publicly available reports of measures being implemented in countries in both regions have been extrapolated to develop an indicative view of which measures are beginning to gain momentum and which remain underutilized. This gap analysis is meant to identify possible entry points where more intervention is needed. It is not a comprehensive review of all mitigation measures currently being implemented across each country. The definitions below have been used to assess the level of activity within each broad category of measures.
• Limited: Little or no observed action by ecosystem players • Emerging: Some observed action by ecosystem players but just starting to gain traction • Gaining momentum: Several observed instances of action by ecosystem players but not at scale across the region
6.1 Cross-cutting measures
As present in the previous impact analysis, due to pandemic-related demand and supply shocks, MSMEs struggled with severe cash flow shortages, which limited their ability to retain workforce and pay salaries. The rise in child poverty, stemming from layoffs and wage cuts to caregivers employed by MSMEs, could have long-term negative impacts across child rights areas. Informal workers are especially vulnerable, given the typical exclusion of these workers from social insurance systems. Female MSME owners and workers are also particularly at risk of job losses due to their overrepresentation in the sectors most affected by COVID-19. The following cross-cutting (i.e., relevant for addressing indirect negative impacts across a range of child rights areas) are presented with this backdrop in mind.
Figure 10: Potential measures to mitigate challenges across child rights areas in the context of COVID-19’s impact on MSMEs149
A. Respect and support human and B. Provide financial support and security to C. Protect child rights MSMEs workers A1/ Implement policies to protect B1/ Ease short-term liquidity constraints C1/ Implement social insurance wages and jobs [MSMEs] [government] [government] • Put in place employment retention • Defer taxes, social security payments and debt • Implement employment and income measures payments protection policies A2/ Develop family friendly • Reduce business costs, such as rent and utility • Provide contributory pensions to policies payments and government fees MSME workers • Implement flexible work • Provide tax relief or moratoriums on debt • Provide support to self-employed arrangements repayments workers • Support working parents with B2/ Employ financial instruments for • Provide wage subsidies and unemployment benefits childcare options that are safe and lending [government, banks]
149 ‘ ‘ denotes mitigation measures that are particularly relevant in the context of COVID-19
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appropriate in the context of COVID- • Provide loan guarantees, direct lending, grants C2/ Implement policies for family 19 and subsidies friendly workplaces [government] • Support government-based social B3/ Employ innovative financing solutions • Implement policies for right to paid assistance measures for MSME recovery from the economic paternal leave and monitor compliance impacts of COVID-19 [government, banks] • Participate in innovative financing and credit projects for MSMEs B4/ Ensure the financial security of MSMEs in the supply chain [government, large companies at the end of supply chains] • Honour supplier contracts • Maintain or speed-up payments for MSME suppliers, distributors or vendors • Promote participation of MSMEs in public procurement E. Adopt Inclusive G. Provide structural support to F. Influence the ecosystem business models MSMEs E1/ Mitigate immediate, COVID- F1/ Advocate for government support of G1/ Support MSMEs’ digitization 19-induced disruptions in essential MSME recovery [MSMEs, industry bodies] efforts [government, large companies] services for underserved • Collectively advocate for economic stimulus • Provide digital training to MSMEs populations [MSMEs] packages that consider the specific needs of • Support content generation or free businesses, including MSMEs and their delivery services for MSMEs • Provide offers or special discounts for E2/ Support and equip workforce workers placement of MSME products on e- members during the economic F2/ Mobilize communities to protect the commerce platforms livelihoods of the most vulnerable groups recovery [MSMEs] G2/ Enable MSMEs in the use of • Develop structured plans for the re- [MSMEs, large companies industry bodies, remote/teleworking models for their employment of workers who were governments, international agencies and NGOs] workforce [government, large companies, laid off during the pandemic • Organize outreach and awareness drives to • Re-skill/up-skill workers for jobs that urge the broader community to aid the NGOs] are more in demand due to COVID- economic recovery of informal workers, like • Train MSME owners or leaders on the 19 domestic helpers deployment of remote work models F3/ Drive commitment to child rights • Finance IT infrastructure for the workforce among MSMEs [MSMEs, industry bodies, governments, international agencies and NGOs] G3/ Support re-employment or re- • Collectively commit to ensuring the supply of deployment of MSME workers essential products and services to underserved [government, large companies, NGOs] populations • Re-skill/up-skill workers • Provide apprenticeships and internship to temporarily laid-off workers A. Respecting and supporting human and child rights
Given that MSMEs are an important driver of employment in both regions, with disproportionately high levels of informality, MSME-led measures to protect employment and promote family-friendly workplace policies will be critical to the short and long-term socio-economic recovery of the most vulnerable groups.
Relative level of activity: Limited: Reports of efforts by MSMEs in some countries to retain workers and pay wages, but limited action to implement family friendly business policies
Key measures taken Key gaps MSMEs • Widescale adoption of measures to protect jobs and • MSMEs in some countries and sectors,150 rallied by wages of workers were not observed in any country or employer associations, have committed to protecting the sector.152
150 ‘Some countries’ implies that measures have been implemented by ~5–6 ROSA and EAPRO countries 152 ILO COVID-19 policy tracker; External expert interviews conducted as part of this project
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employment and wages of workers when governments • The existence and implementation of policies adequately support them through stimulus packages. For promoting family friendly business practices (maternal example, the Bangladesh Garment Manufacturers and leave, time off for breastfeeding or prenatal care) Exporters Association pledged to retain workers or pay wages among MSMEs were already weak in both regions, in April 2020 and instituted mechanisms to monitor ongoing with limited observed action to strengthen such employment issues. In Sri Lanka, the Employers’ Federation policies and practices during the pandemic. of Ceylon entered into an agreement to pay employees full daily wages for days worked, and 50 per cent for days not worked.151
B. Providing financial support and security to MSMEs
Because cash flow shortages limited the ability of MSMEs to retain and pay workers, measures to extend lending, improve liquidity and ensure the financial security of MSMEs are critical for protecting the employment of vulnerable groups.
Relative level of activity: Gaining momentum: Widespread action by governments across both regions, and some efforts by large companies to provide financial support to MSMEs, but more action is needed to better reach informal enterprises
Key measures taken Key gaps MSMEs • MSMEs, particularly those in the informal sector, are • Governments across most countries153 in both regions hard to reach through these policy measures due to have implemented policies to improve credit and their low levels of financial inclusion, suggesting that liquidity for MSMEs. These measures mostly include new sectors such as agriculture, construction, wholesale & lending, temporary flexibilisation of loans, relief or deferral of retail trade and accommodation & food services, will corporate or other taxes, and reductions in business costs receive lower coverage without a dedicated push. (e.g., utilities and rent).154,155 • An ADB survey across four countries159 in East Asia • In some countries,156 measures have targeted specific Pacific revealed that cash grants were one of the sectors that were most affected by COVID-19. Some measures most desired by MSMEs. However, provision countries saw measures focused on export-oriented sectors of grants was not common across either region.160 (e.g., RMG and leathers in Bangladesh and manufacturing • Governments across most countries in both regions exports in Pakistan), while in other countries (e.g., India, have not taken measures to foster MSME participation Malaysia and Pakistan) measures focused on agriculture were in public procurement. China is the only country where more prominent.157 In Pakistan, a special stimulus package such measures were taken in light of COVID-19.161 was also announced for the construction sector. Large companies • International companies with supply chains in the region have taken actions to ensure the financial security of MSME suppliers. In the RMG sector, companies such as Primark, H&M, PVH, Inditex and Marks & Spencer assured the honouring of shipment orders. H&M also established a fund for the payment of factory worker wages.158 • There have been some reports of private sector players in East Asia Pacific developing solutions to overcome
151 ILO, COVID-19 policy tracker 153 ‘Most countries’ implies that measures have been implemented in nearly all ROSA and EAPRO countries 154 World Bank, Map of SME-Support Measures in Response to COVID-19, 2020 155 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 156 ‘Some countries’ implies that measures have been implemented by ~5–6 ROSA and EAPRO countries 157 ILO COVID-19 policy tracker 158 ILO COVID-19 policy tracker 159 Indonesia, Philippines, Thailand, Lao PDR 160 World Bank, Map of SME-Support Measures in Response to COVID-19, 2020 161 OECD, Coronavirus (COVID-19): SME policy responses, July 2020
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financial barriers posed by COVID-19 to MSMEs. In Indonesia, a local bank is using GIS-based solutions to customize SME financing products during COVID-19, and in Malaysia and the Philippines, large private sector firms have extended credit and microfinance to SMEs.
C. Protecting workers
It is particularly critical to expand the coverage of employment support measures to reach informal sector workers since they are typically non-contractual and have hence been traditionally excluded from such measures.
Relative level of activity: Emerging: Widespread action taken by governments across both regions to provide income support to workers; limited action in implementing or expanding policies for family friendly practices
Key measures taken Key gaps Governments • Employment protection measures often do not reach • Most governments162 across both regions adopted the informal sector because they are predominantly measures to support employment and recovery of reserved for workers in the formal sector. workers. For example, wage subsidies were provided across • Policy responses in both regions focus on direct most countries in both regions. Some countries (e.g., financial transfers to vulnerable workers, but often fall Vietnam, the Philippines and Malaysia) covered all sectors short of making them economically secure within the through benefits, while others focused on sectors or workforce. vulnerable groups most affected by the crisis (e.g., wage • The coverage of family-friendly business policies subsidies for women employed in the RMG sector in (maternal leave, time off for breastfeeding or prenatal Bangladesh, wage subsidies for garment and tourism workers care) among MSMEs were already weak in both in Cambodia and support to tourism and agriculture workers regions, with limited observed action to expand or in the Philippines). Increased labour training subsidies were strengthen such policies and practices during COVID- also offered in some countries (e.g., China, Cambodia, 19. Indonesia and the Philippines). Some countries (e.g., India, Malaysia and Fiji) allowed early withdrawal from employees’ provident funds. 163,164,165 • Employment and wage protection during COVID-19 have also been ordered or urged by some governments.166 However, these measures were focused on preventing short-term job losses, rather than safeguarding employment over the long run. While in some countries (e.g., Pakistan, Bangladesh and Malaysia), governments issued orders for businesses to retain and partially or fully pay workers, in others (e.g., India), governments only issued advisories. Use of incentives to prevent layoffs has most notably been observed in China, where SMEs with low layoff rates were refunded 100 per cent of their previous year’s unemployment contribution.167 • In East Asia Pacific, unemployment insurance has been able to provide income support to laid off workers. In
162 ‘Most governments’ implies that measures have been implemented in nearly all ROSA and EAPRO countries 163 World Bank, Map of SME-Support Measures in Response to COVID-19, 2020 164 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 165 ILO, COVID-19 policy tracker 166 ‘Some governments’ implies that measures have been implemented by ~5–6 ROSA and EAPRO countries 167 ILO, COVID-19 policy tracker
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Thailand, Malaysia and the Philippines a rise in claims for unemployment benefits was recorded. Some countries (e.g., Thailand, China and Vietnam) have increased coverage of existing unemployment insurance schemes.168,169 • Some countries170 have also expanded social insurance schemes to cover informal sector workers. For example, countries such as Bangladesh, the Maldives and Sri Lanka created new initiatives to support self-employed workers, which could also benefit informal sector workers.171 • Governments in select countries172 took steps to provide sickness benefits to COVID-19-positive workers. For example, the Fiji government provided paid sick leave to economically vulnerable formal sector workers and one-off grants for informal sector workers who tested COVID-19 positive.173
D. Extending social assistance
Social assistance programs must be created, expanded or adapted to support the incomes of the most vulnerable households, such as those dependent on informal sector jobs. Securing the provision of continued social assistance is particularly important as the economic impact of COVID-19 is likely to have prolonged consequences on the incomes of vulnerable populations.
Relative level of activity: Gaining momentum: Widespread action by governments in both regions to provide financial assistance and benefits to citizens; gaps remain in ensuring benefits are of an adequate amount and reach informal workers and households that were pushed below poverty lines during the COVID-19 pandemic
Key measures taken Key gaps Governments • Social assistance expansions, even the most ambitious • Most countries174 strengthened social assistance systems packages, have left gaps in coverage. These programs targeted at poor and vulnerable households, by adapting cover only a minority of informal workers and may not existing programs or creating new programs. Temporary cover formal workers, who are typically not considered expansions in program coverage (e.g., in Vietnam) and economically vulnerable but are facing increases in benefit amounts (e.g., in Bangladesh) have been unemployment due to COVID-19. They also exclude employed. Some countries (e.g., Vietnam and Thailand) non-nationals.185 implemented entirely new programs to support households • In South Asia186, most interventions provided support not covered by existing programs. 175,176,177 equal to less than 10 per cent of the typical monthly • However, there have not been reports of these benefits income of beneficiary households, and less than one- being expanded beyond temporary or one-time fifth that of the poorest households.187,188 transfers. In some countries (e.g., Pakistan and Malaysia)
168 UNESCAP, Social protection response to COVID-19, September 2020 169 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 170 ‘Some countries’ implies that measures have been implemented in ~5–6 ROSA and EAPRO countries 171 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 172 ‘Select countries’ implies that measures have been implemented in ~1–2 ROSA and EAPRO countries 173 UNESCAP, Social protection response to COVID-19, September 2020 174 ‘Most governments’ implies that measures have been implemented in nearly all ROSA and EAPRO countries 175 UNESCAP, Social protection response to COVID-19, September 2020 176 ILO, COVID-19 policy tracker 177 IMF, A ‘New Deal’ for Informal Workers in Asia, April 2020 185 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 186 Note: similar coverage data not available for EAPRO countries 187 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 188 UNESCAP, Social protection response to COVID-19, September 2020
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one-off transfers were provided to vulnerable families and • A lack of effective registration and payment individuals, while in others, monthly transfers were paid only mechanisms have caused delays in the disbursement during the initial few months of the lockdown (e.g., two of benefits, particularly for beneficiaries who were not months in the Philippines and three months in already registered.189 Thailand).178,179 • Food assistance, while useful in addressing short-term • Food transfers, vouchers and subsidies have been food shortages faced by households, does not provide prominent COVID-19 responses. Based on an analysis as much flexibility as cash transfers. conducted by UNESCAP, one-third of the new programs • Short-term universal basic income support was not targeted toward poor and vulnerable groups in Asia Pacific provided in any country in South Asia or East Asia were focused on food and nutrition. Along with food Pacific, although such measures were adopted in transfers, food and public utility subsidies have been high-income Asian countries (e.g., Japan and extensively provided. 180,181 Singapore).190 • Considerable efforts have been made to target the workers in informal employment in order to expand the reach of social assistance measures to those who were previously excluded but are in enhanced need of assistance due to COVID-19. Countries have used different ways to register informal workers for social assistance, including online forms and government databases. In South Asia, all countries targeted informal workers through one-off (e.g., in India) or short-term (e.g., in Sri Lanka) cash transfers. Support for informal workers were also reported in some countries182 in East Asia Pacific, such as Thailand, Indonesia, Papua New Guinea, Timor-Leste, Cambodia and the Philippines.183,184
E. Adopting inclusive business models
MSME adoption of inclusive business models that provide essential products and services will be important to overcome the short-term disruptions faced by underserved populations and enable long- term recovery of economically weak groups.
Relative level of activity: Limited: Reports of action by the private sector to adopt digital channels of product and service delivery; limited action around devising models to reach vulnerable groups through alternate delivery channels or upskilling of at-risk MSME workers
Key measures taken Key gaps MSMEs • Limited efforts to target the delivery of essential • Greater private sector activity has been noted in products and services towards vulnerable groups mitigating immediate COVID-19-related disruptions in through alternate channels have been noted. delivery of food and healthcare services, largely in urban • Some workforce reskilling activity has occurred in centres. In both regions, MSMEs supplying food or providing response to COVID-19, but such measures are nascent health services have adopted digital channels, particularly and do not specifically target MSME workers social media platforms, to reach consumers. Transportation businesses, including MSMEs, have implemented rigorous
178 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 179 UNESCAP, Social protection response to COVID-19, September 2020 180 UNESCAP, Social protection response to COVID-19, September 2020 181 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 182 ‘Some countries’ implies that measures have been implemented in ~5–6 EAPRO countries 183 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 184 UNESCAP, Social protection response to COVID-19, September 2020 189 UNESCAP, Social protection response to COVID-19, September 2020 190 UNESCAP, Social protection response to COVID-19, September 2020
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safety standards to enable delivery of essential items. However, reports of such safe transportation and digital delivery measures are mainly concentrated in urban areas.
F. Influencing the ecosystem
The voice and influence of ecosystem actors can drive efforts to safeguard employment-related worker rights and mainstream child considerations in economic recovery.
Relative level of activity: Emerging: Widespread action by industry bodies and international agencies advocating for the provision of recovery support to impacted sectors and enterprises; room exists for greater incorporation of MSME and child rights lenses in advocacy efforts
Key measures taken Key Gaps • Employer organizations and worker organizations in • Advocacy efforts by private sector actors, including most countries191 have actively demanded financial MSMEs, large firms, and industry bodies, have not support for impacted sectors and enterprises as well as been widespread or sufficiently tailored to MSME stronger protections of employment-related worker needs, except in some countries (mentioned under rights during the pandemic. Employer organizations have ‘Key Measures Taken’). mainly advocated for additional stimulus packages and • In some countries, like Indonesia and Pakistan, more financial relief. In some countries,192 like Mongolia, Nepal and rigorous efforts to communicate the specific needs of Pakistan, employer organizations also provided their MSMEs to policymakers can be made. members with guidance on health standards and instituted • A child rights lens has mostly not been applied in the family-friendly practices. Trade unions across most countries advocacy efforts of ecosystem actors. have advocated with employers, governments and international agencies for measures that increase job and wage security, provide paid leave, reinstate workers and protect the livelihoods of informal workers. Promotion of teleworking or flexible work arrangements by these organizations was observed in China and the Philippines.193 • International agencies have also advocated for the protection of workers and the expansion of social assistance through advocacy and evidence generation. Many agencies, such as the ILO, UNDP and UNESCAP, have undertaken assessments to estimate the impact of COVID-19 and identify the most vulnerable populations. In addition, agencies, such as the ILO, have supported calls to action for the protection of workers’ jobs, health and salaries. In some countries, agencies have also convened stakeholders to discuss policy options and stimulus measures and advocate for a stronger social safety net. Agencies have also guided governments in the development of responses that support both enterprises and workers.194 • Both governments and industry bodies in select countries195 in East Asia Pacific have shown interest in promoting flexible work arrangements for employees, especially caregivers, during the COVID-19 pandemic.196 In the Philippines, the Department of Labour and
191 ‘Most countries’ implies that measures have been implemented in nearly all EAPRO countries 192 ‘Some countries’ implies that measures have been implemented in ~5–6 ROSA and EAPRO countries 193 ILO COVID-19 policy tracker 194 ILO COVID-19 policy tracker 195 ‘Select countries’ implies that measures have been implemented in ~1–2 EAPRO countries 196 ILO COVID-19 policy tracker
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Employment has encouraged enterprises to adopt flexible work arrangements (i.e., telecommuting, work from home, reduced workdays/hours, rotation of workers and forced leave). The State Council of China also issued policy in support of flexible employment. • Industry associations in some countries197 have advocated for dedicated support to MSMEs. In countries like India and Malaysia, industry associations have advocated for additional interest rate subventions or stimulus packages for MSMEs, while in the Philippines, the Employer’s Confederation advocated for rehabilitation funds for SMEs.
G. Providing structural support to MSMEs
Other ecosystem actors, e.g., governments, multilateral agencies and large corporations, could enable the recovery of MSMEs and their workers by implementing structural policies and measures.
Relative level of activity: Limited: Minimal reports of governments supporting MSMEs with digital transformation or worker upskilling/reskilling efforts
Key measures taken Key gaps Governments • In several countries, comprehensive technical and • In China, the government has taken measures to facilitate financial assistance is not provided to MSMEs to the economic recovery of MSMEs by enabling their enable the digitization of either their internal digitization. The government launched the ‘Digital processes (e.g., remote work) or their external Transformation Partnership Action’ to help SMEs reduce the business models (e.g., digital delivery channels). cost of digital transformation, shorten the transformation • There is still significant room across the region to cycle and improve the success rate of transformation.198 support on upskilling/reskilling efforts • Some governments across both regions have also taken measures to train, re-skill or up-skill workers. For example, in the Philippines, the Technical Education and Skills Development Authority launched a programme to upskill and reskill laid-off workers. In India, the Ministry of Skill Development and Entrepreneurship built an action plan to comprehensively re-skill workers whose jobs may be at risk, including informal workers and migrants, in order to prepare them for work in other sectors, such as e-commerce. In Bangladesh, non-profits like BRAC have partnered with agencies, such as ILO and UNICEF, to develop online content for TVET courses and skills training for youth.199 Large companies • In a few countries, large private sector companies have led efforts to integrate MSMEs into digital models. In China, Alibaba started sourcing food and grocery orders ‘hyperlocally’ from SME retailers and independent chains, while in India, Flipkart has developed a ‘hyperlocal delivery’ grocery service, linking SME suppliers with its e-commerce operations
197 ‘Some countries’ implies that measures have been implemented in ~5–6 ROSA and EAPRO countries 198 ILO COVID-19 policy tracker 199 ILO COVID-19 policy tracker
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6.2 Nutrition-specific measures
In the face of COVID-19, MSMEs face a heightened responsibility to adopt family-friendly practices and comply with responsible production and marketing practices to safeguard children’s nutritional status. Public policies are key determinants of how MSMEs uphold these responsibilities. While disruptions in food supply chains have progressively abated over the course of 2020, MSMEs could enable better accessibility to nutritious food among the most vulnerable groups as part of inclusive business models. MSMEs and other ecosystem actors can also use their leverage to drive government, private sector and community commitments and actions to safeguard the economic security and food security of vulnerable groups.
Table 2 outlines the potential measures MSMEs and other ecosystem actors can take to mitigate nutrition-related risks, and assesses the level of activity observed across these measures.
Table 2: Gaps in potential measures to mitigate challenges related to nutrition in the context of COVID-19200
C. Protecting E. Adopting inclusive F. Influencing the ecosystem workers business models
Emerging: Governments across both Emerging: Considerable action by Limited: Some efforts by regions have pre-existing policies to MSMEs to adopt digital channels of food governments and NGOs to promote facilitate paid leave for caregivers and delivery; limited effort to make food the production of nutritious food breastfeeding in workplaces, but policy items available to and affordable for products but limited action to coverage remains inadequate underserved groups through such regulate the marketing of unhealthy channels foods for children; limited reports of private sector action to promote positive child nutrition practices in
communities Relative level of activity Relative
200 ‘ ‘ denotes mitigation measures that are particularly relevant in the context of COVID-19
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• [government] Implementation of • [MSMEs] Adoption of digital • [governments, NGOs] Promoting policies for paid parental leave in delivery channels for the the fortification of staple workplaces: Policy provisions for distributing food : Such efforts foods with essential maternal leave exist in all countries were driven by large platforms like micronutrients; production of in both regions. In addition, all Alibaba and Flipkart, as seen in fortified complementary foods countries except Papua New Guinea China and India,202 or by MSMEs that meet nutrient quality have policy provisions for the themselves, as seen in Thailand standards, especially for partial or complete payment of and Bangladesh. Support from children aged 6-23 months: in salaries to mothers during the large corporates, governments, Bangladesh, the government has maternal leave period. However, and development actors will be called for all businesses to only five countries in the region critical for MSMEs to adopt these ensure continued fortification of (China, India, Bhutan, Vietnam and channels, given the high financial edible oil during COVID-19, the Maldives) provided paid and capability constraints they while in Indonesia, Thailand and maternity leave of more than the face to adoption, especially in Malaysia, agencies like Nutrition ILO recommended 18 weeks. LMICs.203,204 International are advocating for Moreover, the implementation and • [MSMEs] Use of innovative the continued production and coverage of these policies is technology to identify and distribution of fortified foods. explored inadequate: these laws cover only combat child malnutrition: 10-32% of employed women in Select examples have emerged of
most South Asian countries, except MSMEs using technology to easures easures in Sri Lanka where they cover 33- promote child nutrition during the 65% of employed women. In East COVID-19 pandemic, e.g., in India, Asia-Pacific, policy coverage is at the internet analytics start-up, 66-89% of employed women in Quilt.AI, partnered with the World Malaysia, at 33-65% of employed Bank to analyse caregivers’ online
Categories of m Categories women in Thailand, Philippines, behaviour and devise social media Singapore, and at 10-32% in all interventions to motivate fathers other countries. to help ensure child nutrition. • [government] Implementation of policies promoting breastfeeding in the workplace: More than 50 per cent of the countries in both regions have adopted such policies. In South Asia, only Bangladesh and Pakistan lack them. In East Asia Pacific, such policies are absent in Thailand, Singapore, Myanmar and Malaysia, while in Indonesia, only unpaid nursing breaks are mandated by policy.201
201 ILO, Maternity and paternity at work, 2014 202 IFPRI, COVID-19 and resilience innovations in food supply chains, July 2020 203 IFPRI, COVID-19 and resilience innovations in food supply chains, July 2020 204 World Bank, Digital technology ensures food supply in rural Bangladesh during COVID-19, August 2020
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• [government] Insufficient • [MSMEs] Inadequate effort to • [governments, large businesses,
coverage of existing laws for expand access to affordable and MSMEs] Lack of regulations to
maternal leave: Such laws cover nutritious foods for excluded curb the marketing of only 10–32 per cent of employed populations: Few MSMEs have unhealthy foods for children: women in South Asian countries, developed business models that in Asia, only South Korea and except in Sri Lanka, where they target the low-cost delivery of Taiwan have mandatory cover 33–65 per cent. In East Asia food essentials to vulnerable restrictions on marketing Pacific, policy coverage of groups, such as those in urban unhealthy food for children. employed women is at 66–89 per slums or rural areas, who face During the COVID-19 pandemic, cent in Malaysia, 33–65 per cent in higher risks of deprivation. there have been limited Thailand, the Philippines and • [MSMEs] Further opportunity to observed efforts by businesses
/ / gapsin measures current Singapore, and 10–32 per cent in all build support the local to adopt responsible marketing other countries. This suggests that a production of ready-to-use practices or by governments to high proportion of women in therapeutic foods (RUTFs): regulate marketing activities. informal employment do not Given the momentum created by • [large businesses, MSMEs] receive maternal leave benefits, COVID-19 around local sourcing Limited notable action to with limited evidence of coverage and production, MSMEs have an leverage the private sector’s expansion during the COVID-19 opportunity to engage in local vast social media reach and pandemic.205 production of RUTF and influence in order to promote • [government] Limited reports of strengthen local food systems, positive child nutrition increasing engagement with building on past efforts by actors practices in communities MSMEs to promote breastfeeding like UNICEF to promote RUTF Potential measures additional Potential in the workplace during the pandemic
6.3 Primary healthcare-specific measures
Few reports have suggested that primary healthcare delivery by private providers has been significantly disrupted beyond the initial months of the pandemic. There may, therefore, be little need for recovery support in the sector. The essential nature of these services likely led to a quick recovery from supply-side disruptions around the availability of medicines, healthcare equipment and medical staff, which were the chief constraints faced during lockdowns. On the demand side, while initial mobility constraints on patients did dampen demand, this demand downturn does not appear to have persisted after the initial months of the pandemic, once movement for essential activities resumed.
However, affordability constraints due to falling household incomes might continue to pose challenges to primary healthcare access for children. This is especially true where private sector plays a significant role in delivering health care, as in many countries in South Asia and several in East Asia Pacific. For this reason, it is essential to improve public healthcare infrastructure. However, even within the private sector, MSMEs providing primary healthcare can contribute to its equitable delivery by employing inclusive business models that reach all segments, despite COVID-19-induced mobility disruptions. Such MSMEs can also drive momentum among their peer providers to promote the provision of affordable healthcare services.
Table 3 outlines the potential measures MSMEs and other ecosystem actors can take to improve access to primary healthcare and assesses the level of activity observed across these measures.
205 ILO, Maternity and paternity at work, 2014
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Table 3: Gaps in potential measures to improve access to primary healthcare in the context of COVID-19206
E. Adopting inclusive F. Influencing the ecosystem business models
Emerging: Some efforts by private healthcare providers to Emerging: Notable efforts by development sector
adopt telehealth, but inadequate efforts to reach underserved actors to advocate for regulatory solutions to the segments; limited reports of ensuring healthcare worker safety high costs of private sector healthcare; limited for purposes other than COVID-19 treatment reports of action by private providers to reduce
ofactivity costs for vulnerable households and children Relative level Relative
• [MSMEs] Supply of safety equipment for frontline • [Multilateral agencies] Dissemination of healthcare workers : Across countries, like regulatory best practices for reducing the Bangladesh, Sri Lanka, Indonesia, the Philippines and costs of private sector healthcare: Some Thailand, private companies led the production of multilateral agencies have highlighted and medical personal protective equipment (PPE) for COVID- proposed solutions to the high costs of 19 workers, with likely spill-over effects on non-COVID- private sector healthcare. For example, the 19 related healthcare. In India, MSMEs contributed World Economic Forum has conducted strongly to PPE production. research into the high costs of private • [MSMEs] Utilization of digital delivery channels to healthcare in Southeast Asia and identified
measures explored measures provide primary healthcare for children : In East Asia policy-based solutions, such as the Pacific, remote consultations by private paediatricians decentralization of healthcare to local were 281 per cent higher during the lockdowns than communities. Meanwhile, the World Health they were pre-COVID-19. They stayed 165 per cent Organization has outlined best practices for higher even after the lockdowns were lifted. Anecdotal developing countries to reduce the cost of
Categories of Categories evidence suggests that MSMEs are also adopting digital private healthcare, such as through healthcare delivery channels, e.g., the MSME, Sehat regulatory bans on ‘extra-billing’ by private Kahani, in Pakistan has ramped up digital health providers. consultations, including those for children in
underserved communities. • [MSMEs] No significant observed efforts by the • [MSMEs] Limited action by private PHC private sector to develop affordable mechanisms for providers to ensure affordable healthcare delivering healthcare to vulnerable populations in delivery to underserved populations
remote or rural areas through digital or other means through collective commitment and peer accountability: There are no significant reports of private PHC providers taking
measures action to eliminate the cost-inflating informal payments prevalent in healthcare delivery or
Potential additional Potential other barriers to accessing primary
measures / gaps in current measures healthcare during the COVID-19 pandemic.
6.4 Child protection-specific measures
MSMEs and other ecosystem actors can play a crucial role in curbing practices that are harmful to children, such as the use of child labour and online child sexual abuse. Both policies that regulate such practices and those that raise awareness in broader communities can play a role in this regard. MSMEs can further assist in this effort by ensuring the expansion of essential services aimed at protecting children from mental health issues that may be exacerbated during COVID-19.
Table 4 outlines the potential measures MSMEs and other ecosystem actors can take to improve access to primary healthcare and assesses the level of activity observed across these measures.
206 ‘ ‘ denotes mitigation measures that are particularly relevant in the context of COVID-19
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Table 4: Gaps in potential measures to improve child protection in the context of COVID-19
A. Respecting and supporting human C. Protecting workers and child rights Emerging: Reports of development sector actors Emerging: Governments across both regions have conducting or intensifying child labour monitoring; enacted policies to safeguard children from limited proactive action by MSMEs to curb child labour hazardous work; limited action has been taken to
risks enforce compliance in informal sectors
activity
of Relative level Relative
• [Development agencies] Efforts to identify and • [Governments] Enactment of labour laws that remedy instances of child labour in light of protect children from hazardous labour: COVID-19: (i) Direct monitoring – In Bangladesh, While most countries do not ban children’s the Awaj Foundation and Goodweave International work, they do stipulate appropriate sectors, partnered to conduct research into ‘hidden supply hours or age groups within which children chains’ in the country’s textile sector to identify and might safely work. rescue children from instances of bonded or forced
explored labour. (ii.) Issuing guidelines for employers – The non-profit, Verite, issued a series of
recommendations urging companies globally to Categories of measures of measures Categories monitor ‘hot spots’ of child labour exploitation and intervene when necessary.
• [MSMEs] Limited proactive action to intensify • [Governments] Limited observed action to monitoring and improve due diligence around rigorously implement child labour laws in child labour and online exploitation along informal sectors and enterprises: These business supply chains by MSMEs and other sectors comprise a significant proportion of
private sector actors economic activity in both regions.
Potential Potential
additional additional
easures / gaps in easures
current measures current m E. Inclusive
F. Influencing the ecosystem business models Limited: Some reports of uptake and innovation in digital Limited in the private sector: No significant reports mental health services, but with limited explicit focus on of activity by the private sector
children, especially those in vulnerable communities Gaining momentum in the development sector: Several international agencies and NGOs have directly
activity engaged communities to promote awareness of child protection issues and discourage negative coping Relative level of Relative mechanisms
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• [MSMEs] Provision of digital mental health • [Development agencies] Promotion of services in a few countries in East Asia Pacific: A discourse to stop domestic violence: study in China found that platforms, such as Organizations, like UN Women and ILO, and
WeChat, Weibo and TikTok, were used to enable NGOs, like the Asia Foundation and a number of online mental health education for medical staff and more local NGOs, have conducted assessments deliver online psychological counselling during the of and implemented public campaigns against
COVID-19 pandemic. In Indonesia, telehealth start- domestic violence in light of the COVID-19 explored ups, Riliv and Halodoc, witnessed 300 per cent and pandemic. 80 per cent increases, respectively, in users for mental health consultations during the COVID-19 pandemic.207 208 • [MSMEs] Technological innovation in expanding the reach of mental health services in some countries: In China, artificial intelligence (AI) was used to tackle psychological crises during the
Categories of measures of measures Categories pandemic. For example, the AI programme, Tree Holes Rescue, can identify individuals at risk of suicide by analysing messages posted on Weibo and alerting designated responders.209 • [MSMEs] Few focused efforts to explicitly target • [MSMEs] Limited reports of efforts to raise the provision of mental health services to awareness about and combat the risks of
children, particularly at-risk children, in either domestic violence in communities by the / / gaps
region. private sector, especially MSMEs: Only a few outlying examples of private sector activity have emerged. For example, the Indian Merchants Association and International Advertising Association (India chapter) launched a campaign asking men to help with domestic chores and not engage in domestic violence.210
in current measures current in • [MSMEs] No significant reports of anti-child labour campaigns, anti-abuse campaigns or other awareness drives initiated by the
Potential measures additional Potential private sector
6.5 Education-specific measures
Private sector education providers can adopt inclusive business models and leverage technology to facilitate the equitable and universal delivery of basic (primary and secondary) and vocational education. MSMEs across sectors can support youth employability by ensuring the continuity of vocational skills development and by facilitating virtual apprenticeship and training programs. They can also influence the ecosystem to emphasize the importance of continued primary, secondary and vocational education.
Table 5 and Table 6 outline the potential measures MSMEs and other ecosystem actors can take to mitigate challenges to education, and they assess the level of activity observed across these measures
207 AntaraNews, 2020, Tiga ‘startup’ Indonesia tumbuh di tengah pandemi 208 Annur, Konsultasi Kesehatan Jiwa Halodoc Naik 80 per cent, Mayoritas dari Milenial, 2020 209 Liu, et al., Online mental health services in China during the COVID-19 outbreak, February 2020 210 WARC, Violence No More: India’s COVID-19 opportunity for anti-domestic violence campaigns, June 2020
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Table 5: Gaps in potential measures to mitigate challenges related to primary and secondary education in the context of COVID-19
E. Inclusive F. Influencing the ecosystem business models Emerging: Increasing efforts by EdTech companies to fill Emerging: Widespread action by development education gaps, but efforts to widen accessibility and sector actors to engage policymakers and affordability are nascent; limited reports of the successful digital communities on the importance of continuity in delivery of primary and secondary education by MSMEs education; no significant reports of action by
ofactivity private sector players, especially MSMEs Relative level Relative • [MSMEs] Utilization of digital education technology to • [Development sector actors] Provision of
support continued primary and secondary education policy and community-level guidance to delivery: EdTech platforms have played a key role in filling ensure the continuity of education: gaps in traditional education delivery, with increasing Several international agencies, including investment in such platforms in Southeast Asia during the UNICEF, other UN agencies and the World COVID-19 pandemic. Most reports mention the growth of Bank Group, have issued guidelines to large EdTech platforms (e.g., Ruangguru in Indonesia saw national stakeholders on continued a more than 50 per cent increase in visits,211 and Byju’s in education, especially for vulnerable groups India saw a 60 per cent rise in usage).212 But, there is also like girls. In addition, NGOs like Room to evidence of EdTech MSMEs benefiting from the growing Read have deepened their community momentum and becoming key players in education engagement efforts to champion children’s delivery. For example, Lattu Media, an Indian EdTech start- education during the pandemic. up, was acquired by Bharti Airtel to scale the delivery of Categories of measures of explored measures Categories the platform’s quality learning material and offer it free of charge.213 Meanwhile, in Bangladesh, 10 Minute School added 0.5 million new users during the pandemic.214 • [MSMEs] Inability of traditional MSME providers of • [MSMEs] Minimal observed effort by the primary and secondary education to deliver effective private sector to champion the cause of online learning: Smaller private sector institutions continued primary, secondary and continue to struggle with financial survival and often lack vocational education in communities, the skills and infrastructure to conduct remote learning. such as through re-enrolment campaigns This inability to sustain digital education delivery has driven MSMEs in the education space into severe financial distress, which has resulted in the closure of small private sector schools in Bangladesh215 and the non-payment of teacher salaries in Sri Lanka and Nepal.216
• [MSMEs] Inadequate action by EdTech platforms to gaps in measures current gaps reach vulnerable segments of children, e.g., through Potential / measures additional Potential the subsidization of platform access costs
Table 6: Gaps in potential measures to mitigate challenges related to vocational education in the context of COVID- 19
E. Inclusive F. Influencing the ecosystem business models
211 GSMA, Education For All in the Time of COVID-19, 2020 212 Financial Times, Coronavirus proves a bonanza for Asia EdTech start-ups, March 2020 213 GSMA, Education For All in the Time of COVID-19, 2020 214 The Financial Express, EdTech: Personalising learning is key to success, 2020 215 BBC, Coronavirus: How the lockdown has changed schooling in South Asia, September 2020 216 Education International, The impact of COVID-19 on society in the Asia-Pacific region, May 2020
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Limited: Limited focus on vocational skilling for youth through Emerging: Notable efforts by governments and remote apprenticeships or through digital and EdTech-based development sector actors to emphasize the TVET delivery importance of skill development among youth, but no significant reports of action by private sector
ofactivity players, especially MSMEs Relative level Relative • [Governments, development sector actors] Provision of policy and community level guidance to ensure the continuity of education: Several international agencies, such as the ILO, World Economic Forum and UNICEF, have publicly emphasized the importance of skilling youth in order to help
explored them withstand the impacts of COVID-19. Some governments, such as those in India,
China, and the Philippines have emphasized Categories of measures of measures Categories and implemented programs to improve critical skills, such as digital skills among youth. • [MSMEs] Lack of support for vocational training, such • Limited private sector focus on the as through remote youth apprenticeships, which are at continuity of TVET delivery during the risk of being eliminated due to digitization and COVID-19 pandemic.
insufficient provision of access to appropriate digital tools: With financial survival assuming top priority, there
have been limited reports of MSMEs having supported / / gapsin current
measures remote apprenticeship opportunities that provide vocational skills training to youth.
Potential additional Potential • [MSMEs] Limited focus on vocational education through
measures measures alternative education channels like EdTech
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7. OPPORTUNITIES FOR UNICEF
Objective: To outline the critical roles that UNICEF can play and identify key business-related actors UNICEF can engage to mitigate the impacts of COVID-19 on child rights in the immediate term and to positively leverage the relationship between MSMEs and child rights in the long term Key Takeaways: • It is crucial for UNICEF to incorporate an ecosystem-wide approach to private sector engagement, identifying and acting on opportunities to engage the other actors – e.g., governments, development sector actors and communities – that shape the business ecosystem and influence the activities of MSMEs. • Moreover, it is essential that UNICEF play a role in protecting jobs and employment, given the significant connection between income levels and child rights. In so doing, they can focus the attention of the relevant public and private decision-makers towards the areas and populations in which children – especially the most vulnerable – are particularly at risk. Recognizing the UNICEF is not best suited to do everything, leveraging partnerships with other UN agencies will be critical. • In addition, UNICEF can steer the development of procedures by which to hold MSMEs accountable for failures to uphold human and child rights both during and beyond the COVID-19 pandemic.
The implications for UNICEF’s work are two-fold: (i) UNICEF is well-positioned to focus its advocacy, evidence generation and technical guidance on specific gaps in the medium-term COVID-19 response and (ii) the far-reaching impact of the economic crisis highlights the need to take a systems-based approach to private sector engagement.
In taking a systems-based approach, it will be important for UNICEF to consider not only the actions that MSMEs take, but also the role of other ecosystem players in ensuring that child rights are protected. To date, UNICEF’s private sector engagement approach has hinged on work with businesses, particularly large enterprises and multi-stakeholder platforms.217 However, business activity takes place in an ecosystem comprised of several interacting stakeholder groups, all of whom exert varying degrees of influence on the actions taken by MSMEs. In addition to economic motivations, MSME action is driven by policies and regulations put forth by governments and international bodies, consumer and market preferences, investor and shareholder priorities and peer accountability (arising through industry associations and coalitions). All linkages to the world of MSMEs offer entry points through which to encourage the private sector – directly and indirectly – to protect child rights. UNICEF must consider this wider ecosystem as an arena for transformation.
The timeline for engaging various ecosystem actors will likely vary, with government engagement in the immediate term and direct MSME engagement in the medium to long term. There is an opportunity to engage ecosystem stakeholders like governments and large corporations in the immediate term. This will allow UNICEF to leverage the existing momentum around mitigation measures and fundamental ecosystem shifts in light of COVID-19, to drive the incorporation of an explicit child rights lens into business and related activity. Measures to directly engage MSMEs in child
217 UNICEF, Business Situational Analysis, Sep 2020
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Multiple stakeholders will need to work together to address the gaps in mitigation measures highlighted in the previous chapter. However, given the unique role UNICEF can play in (i) articulating how MSMEs and child rights are linked, (ii) identifying where different actors can contribute and (iii) advocating for action, six broad opportunity areas emerge.
WHAT critical gaps exist and WHY While governments have taken action to expand social protection programs, critical gaps in coverage remain. MSME workers, particularly in the informal sector, are less likely to be covered by these programs. The lack of adequate social protection could reduce access to essential needs for children in vulnerable households that are suffering from income loss. These gaps are likely due to:218 • Government fiscal constraints – Packages are modest compared to those of developed countries and reflect the limited financial resources of national governments (e.g., due to high foreign debt burdens). Details discussed in Chapter 6: Review of Mitigation Measures. • Lack of data or policy frameworks with which to identify informal workers – For example, India just attempted to create its first national database of informal workers in January 2020, and Pakistan’s 2017 census data is still unapproved and unavailable for policymaking. In Indonesia, the governing Law on Manpower doesn’t recognise informal workers, and in India, conventional labour laws do not acknowledge informal labourers as workers. • In some cases, social protection programs overlooked informal workers – For example, Pakistan’s Benazir Income Support Programme (BISP) targets households below a certain threshold based on their means score, but this targeted approach bypasses informal workers. In Thailand, social insurance schemes for informal workers are voluntary, leading to low registration among this group. • Inadequate access to digital payments accounts/mobile wallets and a lack of alternate mechanisms for the transfer of funds – For example, the average mobile phone penetration across India, Bangladesh and Pakistan remains under 40 per cent.
HOW can UNICEF address these gaps Build evidence and advocate to and support governments in strengthening and expanding a child- sensitive social protection system for MSME workers.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
WHAT critical gaps exist and WHY MSMEs have taken limited additional action to protect child rights in light of COVID-19. Instead, financial survival and economic considerations have been their first priorities. Current policy frameworks are inadequate to hold MSMEs accountable when they fail to respect child rights or fail to alleviate the negative consequences of their actions (i.e., responses to economic pressures) on children. For example, maternal leave policies do not reach a majority of informal enterprises (which are largely MSMEs) and regulations curbing the marketing of unhealthy food for children do not exist in most countries.
218 International Growth Centre, Responding to the impacts of COVID-19 on informal workers in South Asia, 2020
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HOW can UNICEF address these gaps Advocate for stronger policies from governments and provide support to businesses to increase respect of child rights within MSMEs.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
WHAT critical gaps exist and WHY Family-friendly policies are critical to helping caregivers meet the needs of their children during the pandemic. While various actors have called for strengthening such policies in light of COVID-19, substantial action has not been taken to improve provision of family-friendly policies in MSMEs. This is particularly true for the informal sector, where enforcement of regulations to promote family-friendly policies remains weak. MSMEs’ limited awareness of and expertise on practical approaches by which to implement FFPs in the workplace may have further impeded the implementation of such policies.
HOW can UNICEF address these gaps Promote the provision of family-friendly policies among MSMEs through advocacy, guidance and tools, and partnerships with businesses.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
WHAT critical gaps exist and WHY Targeted support packages are needed in order to reach MSMEs in sectors that disproportionately employ and impact vulnerable groups. In the absence of adequate support, vulnerable workers in these sectors could face prolonged income losses, thus impacting their children’s well-being. MSME support packages have been largely temporary in nature, likely due to fiscal deficit considerations, and MSMEs in the informal sector have been hard to reach due to their low levels of financial inclusion. Moreover, due to the lack of data, support packages have failed to consider the special needs of MSMEs and the vulnerable populations they employ.
HOW can UNICEF address these gaps Build evidence and advocate for support from governments to enable the recovery of MSMEs in sectors where vulnerable groups are overrepresented.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
WHAT critical gaps exist and WHY COVID-19 has aggravated the consequences of MSMEs negligence towards child rights. During the pandemic, MSMEs have not been observed taking proactive actions to uphold child rights. This is primarily due to the lack of
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pressure/incentives from governments to address areas of child rights that might constraint business objectives and to the dearth of examples evidencing the business case for such actions.
HOW can UNICEF address these gaps Convene private sector actors to facilitate cooperation and the sharing of best practices and bring voices together to mainstream child rights considerations among MSMEs.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
WHAT critical gaps exist and WHY Enterprises, including MSMEs, have taken actions to adapt their business models to mitigate COVID-19-induced disruptions. However, there is an opportunity for MSMEs to develop more inclusive business models that are sensitive to the needs of children in the most vulnerable households. Historically, businesses have lacked an understanding of the needs and preferences of people living at the base of the pyramid (BOP). Because the COVID-19 pandemic has changed the profile of the ‘global poor’, businesses may face further challenges understanding the changing needs and preferences of these populations. The lack of examples evidencing successful, inclusive business models prevents businesses from pursuing them and makes securing financing for such efforts difficult.
HOW can UNICEF address these gaps Encourage MSMEs to adopt practices that help vulnerable populations by advocating and leveraging partnerships with businesses to fill gaps in business-case evidence.
HOW can UNICEF harness the power of business
Business as provider Business as Business’s impact on Business as a source The voice and of goods and employer communities and of technology, influence services environment innovation and of business financing
The following table provides a non-exhaustive list of interventions that UNICEF can take within these six approaches.
Table 7: List of potential interventions for UNICEF
Build evidence and advocate to and support governments in strengthening and expanding a child- sensitive social protection system for MSME workers. Undertake assessments to identify gaps in the breadth and depth of coverage provided by current programmes to MSME workers, particularly those in the informal sector. Rationale: With regard to the social protection Target sectors: expansions implemented by governments during the - All sectors, with special focus on micro pandemic, there is currently limited data on the levels enterprises and informal sector enterprises of coverage and the adequacy of benefit amounts. Business focus areas: Evidence identifying which groups of MSME workers - Business as a source of technology, innovation face the most significant gaps could enable and financing: Technology partners (e.g., governments to shape future policies, with special Facebook and Google) could support rapid focus on often-excluded micro and informal remote surveys for data collection
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enterprises. UNICEF could leverage the expertise of Potential ecosystem partners: businesses to collect data and generate evidence that - ILO would fill these knowledge gaps. - UNESCAP - International Policy Centre for Inclusive Growth Work with large companies to promote the extension of employment-linked social protection through supply-chain relationships, particularly in the informal sector. Rationale: The COVID-19 pandemic accelerated the Target sectors: need to address coverage and efficiency gaps in - Small and micro sized enterprises in sectors with reaching the informal sector with social protections. high levels of informality – agriculture, wholesale While governments have taken some measures to & retail trade, construction, accommodation & temporarily extend social protection programmes to food services informal workers, there is a need for reforms to Business focus areas: strengthen the social protection system by including - Business as employer: Large companies with the families and children of these workers long-term. supply chains in the region can promote social Large and medium sized companies can play a key role protection benefits for the employees of their by incorporating social protection, decent work and MSME suppliers core labour standards into their due diligence Potential ecosystem partners: mechanisms for small and micro suppliers. - National governments - ILO Work with UNCDF, governments and private sector actors to set up effective payment mechanisms for cash transfers to children and their families. Rationale: There is a need to improve access to Target sectors: finance and bank services among poor and - All sectors, with special focus on workers in marginalized populations. By working with the private informal micro and small enterprises sector in mobile/digital payment delivery, UNICEF Business focus areas: could facilitate the easy transfer of cash assistance to - Business as provider of goods and services: children and their families and also promote the Technology companies can provide the financial inclusion of recipients, especially among technology for management information workers in informal micro and small enterprises who systems (MIS) and biometric identification often lack access to digital tools and finance. Potential ecosystem partners: - UNCDF - National and regional governments Support government in development of databases to expand coverage for vulnerable families Rationale: There have been reports of delays in receipt Target sectors: of payments by beneficiaries who were not already - All sectors, with special focus on informal micro registered for social protection programs.219 Expanding enterprises and own-account workers universal IDs, unifying social registries and improving Business focus areas: interoperability of databases can enable the - Business as a source of technology, innovation identification of such vulnerable families, especially and financing: Technology partners to those employed in informal micro enterprises who are strengthen systems and databases often not registered for such programs. UNICEF could Potential ecosystem partners: collaborate with the private sector and governments to - National and regional governments facilitate rapid registration of new beneficiaries for social protection schemes. Encourage large international companies to complement state provision of social protection Rationale: The COVID-19 pandemic has exposed Target sectors: deficiencies in the current social protection systems. - All sectors There is an opportunity for the private sector to plug Business focus areas:
219 ILO, UNESCAP, Social protection response to COVID-19, September 2020
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gaps in coverage. Large international companies could - Business as a source of technology, innovation make voluntary contributions to state-run social and financing: International companies could protection systems in countries where their supply contribute to social protection systems chains are present. Potential ecosystem partners: - National and regional governments Advocate for stronger policies from governments and provide support to businesses to increase respect of child rights within MSMEs. Conduct sensitization and training workshops for MSMEs to help them recognize the need to and develop deliberate practices for preventing the violation of child rights through their operations. Rationale: Target sectors: MSME consciousness regarding their relationship with - All sectors, with focus on informal small and child rights has historically been limited, due to which medium enterprises they have limited experience and skillsets for Business focus areas: identifying needs, opportunities, and practical - Business as provider of goods and services; approaches for preventing the violation of child rights Business as employer; Business’s impact on through their business practices. This holds true communities and the environment: MSMEs must especially for informal micro and small enterprises, be provided with the requisite skills and where operations are often not organized in a knowledge to identify and prevent breaches of structured manner. UNICEF could work with child rights governments and worker organizations to help Potential ecosystem partners: sensitize these enterprises to child rights concerns, as - ILO well as build their capacity to prevent breaches, - National governments through hands-on training. - Worker organizations Develop sectoral toolkits to enable MSMEs to identify key child rights issues related to their operations and encourage them to respect child rights as they take actions toward financial recovery. Rationale: With economic survival taking priority in Target sectors: the sectors most affected by the pandemic, child rights - All sectors, with toolkits customized by micro, considerations have been absent from the recovery small, and medium enterprises measures being adopted by MSMEs. UNICEF could Business focus areas: work with medium and large enterprises and other - Business as provider of goods and services; actors to develop guidance and tools (e.g., due Business as employer; Business’s impact on diligence guidance on policy commitments and codes communities and the environment: MSMEs must of practice for child rights, child-safeguarding toolkits, take deliberate actions to not harm the rights of and child rights impact assessments and reporting their workers’ children, both in the marketplace customized by micro, small, and medium enterprises) and in their broader communities that will help different sectors understand the impacts Potential ecosystem partners: of their operations and business decisions on children - NGOs and foundations so they can recover in a way that protects their rights. - Industry associations Advocate for the establishment or strengthening of employment protection regulations for young workers employed by MSMEs, particularly in the informal sector. Rationale: Employment and wage protection measures Target sectors: have been ordered and urged by governments during - Informal small and medium enterprises in the COVID-19 pandemic. However, these efforts have sectors contributing to high levels of youth focused on preventing short-term job losses rather unemployment – e.g., agriculture, construction, than safeguarding employment long term. In addition, accommodations & food services and retail they are also predominantly reserved for workers in the trade (refer to formal sector. Young workers faced higher COVID-19- - Figure 8 ) induced unemployment than adults and will thus bear Business focus areas:
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higher long-term economic and social costs.220 There is - Business as employer: Policy interventions could a need to provide adequate employment protections, hold MSMEs accountable for failing to protect especially in informal small and medium enterprises their workers’ jobs which likely generate large proportions of youth Potential ecosystem partners: employment - ILO - National governments - Worker organizations Advocate for policies to curb and mitigate breaches of child rights driven by children’s increased online activity during the COVID-19 pandemic. Rationale: COVID-19 has triggered a spike in Target sectors: children’s online activity. While data is currently limited, - Food and beverages sector aggressive marketing of less nutritious, processed food - Consumer goods sector items could increase unhealthy food consumption, - Formal medium and large enterprises with leading to a potential rise in childhood obesity. sizeable online presence Similarly, children may be more exposed to marketing Business focus areas: content that exploits their vulnerabilities and puts their - Business as a provider of goods and services for safety at risk. Current policy mechanisms to monitor children and families: Strengthening of policies marketing practices of MSMEs are limited and greater that regulate MSMEs’ online marketing and regulation is needed, especially among medium and other online activities to prevent harm to large sized formal sector enterprises which are more children likely to have a media presence Potential ecosystem partners: - National and regional governments - NGOs and foundations Promote the provision of family-friendly policies among MSMEs through advocacy, guidance, the provision of tools and partnerships with businesses. Partner with businesses, large enterprises and MSMEs to identify champions that can promote family- friendly policies among MSMEs Rationale: FFPs, such as parental leave and sick leave, Target sectors: for workers employed in MSMEs, particularly those in - All sectors, with focus on medium and large informal sector, have historically been lacking.221 Even enterprises with supply chain linkages and during the pandemic, flexible work arrangements, such influence over the ecosystem as work from home/teleworking, have not been Business focus areas: popular among MSMEs.222 UNICEF could partner with - Business as employer, Business’s impact on MSMEs directly or through large international communities and environment: MSMEs could companies with supply chains in the region to implement and promote robust, family-friendly champion the implementation of family-friendly policies policies among MSMEs. Large and medium sized Potential ecosystem partners: enterprises with supply chain linkages can play an - Employer and worker organizations important role in driving commitment among small and micro enterprises Advocate for policies and mechanisms to ensure paid maternity leave in both formal and informal sectors Rationale: While paid maternity leave is the most Target sectors: widely-adopted, family-friendly policy, the length of - Countries that do not meet the ILO minimum leave provided by businesses typically follows national standard of at least 14 weeks of maternity leave, legislation.223 Only five countries in the region (China, such as Cambodia, Indonesia, Malaysia, Papua
220 ILO, ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, August 2020 221 ADB, Social Protection for Informal Workers in Asia, 2016 222 ADB, Impact of COVID-19 on MSMEs in Developing Asia, September 2020 223 UNICEF, FFP A global survey of business policy, 2020; Dalberg analysis
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India, Bhutan, Vietnam and the Maldives) provided New Guinea, Afghanistan, Sri Lanka, Pakistan paid maternity leave of more than the ILO and Fiji225 recommended 18 weeks. In Papua New Guinea, - Sectors with high representation of women – women can only receive 6 weeks of unpaid maternity wholesale & retail trade, accommodation & leave.224 Policies for paid maternity leave are food services and RMG particularly important in light of COVID-19 because, in - Micro and small informal enterprises which are the absence of these policies, employers could single usually not covered by policies out pregnant women and new mothers for layoffs or Business focus areas: furloughs. - Business as employer: MSMEs, particularly in the informal sector, can be held responsible for the provision of maternity leave by strengthening regulations and enforcement. Potential ecosystem partners: - National governments - ILO Provide guidance and support to assist MSMEs in the implementation of policies, practices and infrastructure to promote and encourage safe breastfeeding at the workplace. Rationale: The COVID-19 pandemic has amplified the Target sectors: need for employers to provide clean breastfeeding - Sectors with high representation of women – rooms where working women can express milk. wholesale & retail trade, accommodation & Employers can also be instrumental in alleviating food services and RMG mothers’ concerns regarding fear of infection during - Micro and small enterprises which often lack breastfeeding. Micro and small enterprises often lack infrastructure and capabilities the infrastructure and capabilities to support Business focus areas: breastfeeding mothers and require targeted support to - Business as employer: MSMEs could implement do so. robust, family-friendly policies Potential ecosystem partners: - MSMEs in relevant sectors - Employer organizations Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize tax-paying Target sectors: MSMEs to adopt family-friendly policies such as the - All sectors provision of healthcare benefits, childcare and on-site - Formal tax-paying enterprises, which are likely child-care centres through tax breaks or subsidies. to be small or medium sized enterprises These measures could be implemented as part of the Business focus areas: COVID-19 relief/stimulus packages. - Business as employer: MSMEs could implement robust, family-friendly policies Potential ecosystem partners: - National and regional governments Build evidence and advocate for support from governments to enable the recovery of MSMEs in sectors where vulnerable groups are overrepresented. Work with other UN agencies to generate evidence of credit challenges and advocate for governments and banks to provide credit or capital to women-run businesses, sectors that disproportionately employ women and informal or self-employed workers. Target sectors:
224 Puliyel et al, 2020 (data updated to account for recent legislative changes in Nepal, Philippines and Thailand) 225 Puliyel et al, 2020 (data updated to account for recent legislative changes in Nepal, Philippines and Thailand)
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Rationale: Evidence from the pandemic has shown -Sectors with high representation of women-led that women-led MSMEs faced a higher risk of business businesses, such as healthcare services, education, closure than men-led MSMEs. Even before COVID-19, and personal or retail services227 in Asia Pacific, women’s access to credit from formal -Informal micro enterprises where women are financial institutions was restricted by multiple layers of commonly employed or run businesses gender-based barriers.226 Business focus areas: - Business as provider of goods and services: Banks and microfinance institutions can provide tailored products to address challenges related to access to finance for women-run businesses, sectors employing vulnerable populations, and informal MSMEs Potential ecosystem partners: - UN Women - UNDP - National and regional governments Advocate for governments to take specific measures to support the digitization of MSMEs so as to enable remote work options for working mothers and facilitate the digital delivery of essential goods and services to children Rationale: Remote work options were not a popular Target sectors: Services sector, small and micro arrangement adopted by MSMEs during the pandemic. enterprises in the formal and informal sector Most MSMEs have not been provided with the Business focus areas: comprehensive technical and financial assistance they - Business as employer: MSMEs could offer remote need to digitize both their internal processes (e.g., work options, where possible, to support remote work) and external business models (e.g., working mothers digital delivery channels). However, in China, the - Business as providers of goods and services: government launched the ‘Digital Transformation MSMEs can leverage digital channels to expand Partnership Action’ to help SMEs reduce the cost of access for primary healthcare, mental health and digital transformation, shorten the transformation cycle education and improve the success rate of their transformation.228 Potential ecosystem partners: Such support is critical for micro and small enterprises - National and regional governments which generally lack the finances and technical - Worker organization knowhow to adopt digital channels Convene private sector actors to facilitate cooperation and the sharing of best practices and bring voices together to mainstream child rights considerations among MSMEs. Convene private sector schools and education providers, including MSMEs, to implement re-enrolment and back-to-school campaigns (especially for girls) and collectively advocate for government support with such efforts Rationale: COVID–19-induced reductions in household Target sectors: incomes have increased the risk of permanent school - Education sector dropouts, especially among girls. There is a need to - Large and medium-sized education providers directly engage communities and caregivers to prevent who can exert significant ecosystem influence such dropouts. Business focus areas: - The voice and influence of business: Private schools can mobilize a community-level commitment to children’s education
226 ADB, Emerging lessons from women’s entrepreneurship in Asia and the Pacific, 2018 227 Office on the Economic Status of Women, Why are women-owned businesses overall smaller than men-owned businesses?, 2016 228 ILO COVID-19 policy tracker
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Potential partners: - Private schools and educational institutions Convene industry stakeholders to encourage private sector investment and advocate for targeted government programs for youth skilling. Rationale: Disruptions to vocational education have Target sectors: been largely overlooked during the pandemic, with - Education sector prevalent reports of TVET institution closures. If - Large and medium-sized enterprises who have unaddressed, this can significantly reduce the ability of the resources and voice to make and advocate youth to attain crucial workforce skills. Additionally, for the necessary investments long-term unemployment due to COVID-19 could lead Business focus areas: to the deskilling of young workers. - The voice and influence of business: Businesses, MSMEs and large companies can drive private sector and government recognition of the importance of youth skills development Potential ecosystem partners: - The ILO - Industry associations - National and local governments Convene tech industry stakeholders to encourage the use of digital channels to safeguard and promote the well-being of children. Rationale: COVID-19 has accelerated the adoption of Target sectors: digital channels as means by which to access services, - ICT or e-commerce sectors such as healthcare, mental health support and - Large companies which can drive the design of education. This creates an opportunity to promote digital products child rights. However children, particularly those from Business focus areas: vulnerable groups, are often not taken into account in - The voice and influence of business; Business as a designing digital products. source of technology, innovation and financing: Technology players, such as Facebook, Google and Amazon, could leverage their influence and expertise to drive the adoption of digital to advance child rights causes Potential ecosystem partners: - UNDP Encourage MSMEs to adopt practices that help vulnerable populations by advocating and leveraging partnerships with businesses to fill gaps in business-case evidence. Encourage businesses to subsidize data and device costs for vulnerable families in order to promote digital channels for accessing nutritious food, healthcare and blended learning. Rationale: MSMEs’ increasing use of digital channels Target sectors: to supply food or provide healthcare are encouraging. - ICT sector Digitization can expand access of these services in - Medium and large enterprises with the financial currently underserved populations. In addition, even as ability to subsidize costs schools re-open, tech tools can be leveraged to Business focus areas: supplement education and improve learning outcomes. - Business as provider of goods and services: The mobile industry has responded with measures to Internet service providers and device subsidize internet costs in some countries. For manufactures could subsidize data and device example, Robi Axiata provided special assistance packs costs for vulnerable families in Bangladesh, and Digi reduced cost of accessing e- learning apps in Malaysia.229
229 GSMA, Mobile economy in Asia Pacific, 2020
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Advocate for the provision of incentives to MSMEs that offer apprenticeships, training schemes and internships to young adults who were laid off or are transitioning to new work. Rationale: Current COVID-19 response measures by Target sectors: governments do not focus on making young workers - Programming area: Education secure within the workforce. There are some country- - All sectors, particularly those creating new job level solutions that could be more widely adopted to opportunities during the COVID-19 pandemic – improve the employability of young adults. In China, as ICT, pharmaceuticals and healthcare a policy response to COVID-19, enterprises were - Medium enterprises who can hire and train large subsidized to train migrant workers.230 In India, under a numbers of youth scheme launched in 2016, the government provided Business focus areas: financial incentives and expenditure support for - Business as provider of goods and services: Skill enterprises that offered apprenticeships to youth.231 development institutes could support re-skilling and up-skilling efforts for vulnerable populations, such as recently unemployed youth. Potential ecosystem partners: - Governments Collaborate with mobile health (mHealth) platforms to provide training to individual clinicians or small hospitals and to encourage the use of digital channels for easier and more affordable access to healthcare for children. Rationale: During COVID-19, online health Target sectors: consultations increased in many countries, especially in - Programming area: Primary healthcare, mental East Asia Pacific, indicating an opportunity to improve health access to healthcare in rural/remote areas where - Healthcare and ICT sector physical access to providers remains an issue. With - Medium and large enterprises with the financial mobile penetration in Asia Pacific of over 60 per and human resources to provide trainings at cent,232 there is an opportunity to expand healthcare scale access through channels such as SMS, mHealth Business focus areas: platforms and platforms such as WhatsApp. - Business as provider of goods and services: Mobile health platforms and internet service providers could provide digital skills trainings to individual clinicians or small hospitals Potential ecosystem partners: - Civil society organizations Encourage the development of light, mobile applications that can operate on low-speed internet to expand access to essential services for children. Rationale: A substantial proportion of the population Target sectors: in South Asian countries still access 2G internet – 54 - ICT sector per cent in Pakistan, 51 per cent in Bangladesh and 33 - South Asia per cent in India,233 thus poor connectivity could - Large enterprises who have the technical and impede access to digital services such as remote financial capabilities to invest in technological learning, healthcare and mental health support. development Applications with limited animations and compressed Business focus areas: images can be specially designed for such users. - Business as provider of goods and services: Mobile app developers and online content developers could build light applications
230 ILO COVID-19 policy tracker 231 Economic Times, Government to incentivize employers to engage apprentices under National Apprenticeship Promotion Scheme, 2016 232 GSMA, Mobile economy in Asia Pacific, 2020 233 GSMA, Mobile economy in Asia Pacific, 2020
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targeted towards populations with poor access to mobile data.
Areas for further exploration
To build on this report and further inform UNICEF’s Private Sector Engagement Strategy in light of COVID-19, the following (non-exhaustive) areas could further be explored:
Areas for building further evidence
• How has COVID-19 impacted children and women’s access to primary healthcare in the private sector, such as through the affordability constraints expected to have been created due to income loss?
• How have MSME actions (e.g., increased production or marketing of processed food) impacted childhood obesity in light of COVID-19, especially in East Asia-Pacific, which suffers from the ‘double burden’ of undernutrition and obesity?
• How has COVID-19 impacted children’s work in the region? For example, have more children been pushed into exploitative workplaces due to household economic stress? Have workplace closures directly impoverished children who were previously working?
Strategic questions for UNICEF
• What private sector engagement capabilities will Country Offices need to build or expand in order to pursue these opportunities? For example, increasing and diversifying their networks of private sector partners and more systematically including private sector analysis in the preparation of programmatic work.
• What are some quick wins which UNICEF can pursue, while working towards objectives which require longer-term effort? For example, convening private sector stakeholders might be achievable in the near term, while successfully advocating for enhanced social protection nets will likely occur over a longer time period.
• How can UNICEF mainstream child rights into government policy considerations, even as current priorities are focused on COVID-19 vaccination efforts?
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8. COUNTRY SNAPSHOTS
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8.1 Afghanistan
COVID-19 hit Afghanistan in late February, triggering stringent measures from the government; growth in the number of cases has slowed since August and restrictions have been eased. Afghanistan’s first confirmed COVID-19 case was on February 24, 2020. The government imposed a complete national lockdown from 22 March to 24 May 2020 to contain he virus. Borders were reopened in early June, followed by a progressive easing of restrictions, with most containment restrictions removed by end-August. The spread of the was relatively slow since August 2020 (Figure 11)234.
Figure 11: COVID-19 cases & Stringency of measures235
100 100
80
60
40
20 IndexStringency Confirmed cases cases (1000s)Confirmed
0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases (1000s) Stringency Index
The economic impact of COVID-19 is expected to be severe in 2020, with an estimated contraction of GDP growth rate to -5 per cent; steady recovery is expected in 2021. While the economic projections are still evolving, as of October 2020, the IMF estimated that the GDP growth would slow down from a formerly projected 6.3 per cent to -5 per cent in 2020, with an expected recovery to 4 per cent GDP growth in 2021 (Figure 12).
Figure 12: GDP, constant prices, per cent change236
8% 6% 4.5% 3.9% 4% 4.5% 2% 4.0% 4.0% 4.0% 0% -2% 2019 2020 2021 2022 2023 2024 2025 -4% -5.0% -6%
IMF - Oct 2020 IMF - Oct 2019
COVID-19 related restrictions resulted in the some degree of disruption of all health, nutrition and protection services for mothers and children (except nutrition support for mothers), with the
234 Oxford COVID-19 Government Response Tracker 235 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 236 IMF, World Economic Outlook, October 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 74 most severe disruptions noted in vaccination campaigns, promotion of nutritious diets for young children, civil registration services, and social service visits. In a survey conducted across UNICEF Country Offices in September 2020, a 75-100 per cent decline in coverage was reported for civil registration services and social service visits due to COVID-19, while vaccination campaigns and promotion of nutritious diets for young children saw 50-74 per cent coverage decline in all nutrition services. Care for childhood infectious diseases, routine vaccinations and breastfeeding campaigns also saw a significant 25-49 per cent coverage decline.237 (Figure 13)
Figure 13: COVID-19 related change in coverage of services238
Health services Nutrition services Child protection services Health campaigns for vaccination, Early detection of wasting (Screening) Civil registration services LLIN or mass drug distribution, etc. Health care for displaced and Home visits by social service/ justice Treatment of child wasting refugee populations workers Protection & promotion of Access to available women and girls' Maternal Health services breastfeeding programmes friendly spaces including support Outpatient care for childhood Promotion of nutritious and safe diets services for GBV survivors, girls at risk infectious diseases for young children (6-23 months) of marriage and married girls, and Nutrition support for pregnant and girls affected by female genital Routine Vaccinations lactating women mutilation
Not applicable No change <10 per cent 10-24 per cent 25-49 per cent 50-74 per cent >75 per cent drop drop drop drop drop
Of the three predominant employment-generating sectors in Afghanistan, construction and carpets are expected to sustain prolonged and significant losses, while agriculture and agribusinesses started to show signs of recovery. The economic impact on the carpet and rugs exporting sector is expected to be significant and prolonged due to continued downturn in international demand, while the construction sector is not expected to realise the benefits of new Indian infrastructure projects in the short term. International support to agriculture and agribusinesses, combined with the reopening of agricultural trade has likely contributed to recovery in the sector. However, unlike most other countries in the region, e-commerce and IT have not witnessed positive growth due to COVID-19, likely owing to very low internet penetration rates and internet quality in the country. Figure 14 presents a high-level assessment of some of the key sectors in the country.
Figure 14: Sectoral impact of COVID-19 in Afghanistan
Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment
237 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 238 UNICEF, Tracking the situation of COVID-19
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Carpets and • The carpet industry accounts for 45 per cent (USD 388 million) of Afghanistan’s total rugs exports and employs over 1 million (9 per cent of total employment) • According to Afghanistan SME Development Strategy, the sector has a significant concentration of SMEs, especially in cutting and washing facilities • The sector is also a major driver of female employment, as 95 per cent of all enterprises are in the sector are home based enterprises10 • The carpet sector has been severely impacted due to COVID-19, resulting in a 30 per cent reduction of exports in the sector as of August 2020, compared to the same period in 201912 • As of August 2020, average wages in the sector had been reduced by >50 per cent, impacting the large number of workers in the sector • While data from the last few months of 2020 is limited, a second wave of the pandemic in major end importers of Afghan carpets, such as the US (via Pakistan), is likely to depress the recovery of the sector Construction • The sector contributes 10 per cent of the country’s GDP and ~10 per cent of total employment • While exact figures are unavailable, construction work was halted as of April 2020, with likely adverse impacts on large and MSME contractors in the sector239 • Moreover, the closing of US military bases in the country in March 2020 lead to the permanent downsizing of construction companies which provided operational and maintenance support to these bases240 • While India announced USD 80 billion worth of infrastructure projects in Afghanistan in November 2020, the employment benefits of these projects are unlikely to be realised in the short-term241 Agriculture • Agriculture accounted for 42.4 per cent of national GDP in 20194, and an estimated 79 and per cent of Afghans are dependent on agriculture and related agribusinesses for their agribusiness livelihoods5 • The sector employs 67 per cent of the female labour force • MSMEs dominate the sector: 67.5 per cent of those engaged in agriculture are smallholders6, while related agribusinesses (livestock, agri-processing) have a high concentration of SMEs as per the Afghanistan SME Development Strategy7 • The early impacts on the sector were severe; as of May 2020, agri-processing MSMEs have faced disruption to operations: >50 per cent of millers and processing units relating to cereals (50 per cent), fruits (57 per cent), vegetables (70 per cent), and dairy (97 per cent) were operating at reduced capacity or were closed, while >33 per cent of farmers were unable to sell produce due to market closures8 • However, these impacts were largely limited to the initial months, as an easing of lockdowns eased supply chain restrictions • Moreover, dedicated support by international agencies aided the recovery of the sector; e.g., the World Bank made a USD 100 million grant in August 2020 to increase local food production and strengthen critical commercial food supply chains in Afghanistan242 • Moreover, trade with India was resumed in July 2020, providing a boost to export- oriented agribusinesses such as dry fruits243
239 ORF, Afghanistan: COVID-19 exposes weaknesses in health infrastructure, 2020 240 The Hindu, Indians in Afghanistan seek repatriation, 2020 241 LiveMint, India announces 100 projects worth $80 mn in Afghanistan, 2020 242 World Bank press release, 2020 243 The Hindu, Afghan goods arrive via Attari-Wagah border, 2020
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Enterprises in Afghanistan were severely impacted by the pandemic, with 88 per cent having faced sales declines; MSMEs, which comprise 80 per cent of all enterprises in the country, represent the majority of those impacted. MSMEs are vital to the economy of Afghanistan, accounting for 50 per cent of the GDP and 33 per cent of total employment244; MSMEs also comprise ~80 per cent of all business enterprises in the country.245
A survey of 380 enterprises in Afghanistan held in August 2020 shows that 88 per cent of enterprises have faced declining sales due to COVID-19 induced uncertainty, and that at least 64 per cent of workers are employed in enterprises facing a high likelihood of liquidity problems and potential closure. In the same survey, 61 per cent of enterprises reported a further expected sales contraction of up to 28 per cent in the coming 3 months, due to continuing market uncertainty. Border closures are a significant for such decline in sales – due to disruptions in movement of inputs and finished goods – as reported by 38 per cent of enterprises. Such decline in sales and revenue adversely impacts several MSMEs, which comprise a large share of all enterprises in Afghanistan.246
Emerging evidence suggests that MSMEs undertook layoffs in response to the initial economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and education for children were substantial but largely limited to the first half of 2020; few reports have emerged of MSMEs diversifying to alternate digital sales channels to cope with the pandemic
Economic downturn limited MSMEs’ ability to pay salaries and maintain employees, severely impacting women, informal workers, and internally displaced persons; while most data on layoffs refers to the first three quarters of 2020, reports of reversals in job loss had not emerged as of December 2020 • In a survey of 380 enterprises in August 2020, declines in sales were reported to trigger layoffs or unpaid leaves: 23 per cent of workers in these enterprises had lost jobs and 37 per cent of surveyed firms had laid off at least 1 worker; the fraction of workers at A: Layoffs and risk was higher (70 per cent) in firms with more female workers247 wage cuts • Informal workers, representing 80-90 per cent of all economic activity, are especially vulnerable due to lack of employment protections and benefits248 • The country’s 4 million Internally Displaced Persons (IDPs) are at magnified risk of income loss, as all economic ventures in IDP camps have been halted due to lockdowns249 • Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints
244 UNESCAP, COVID-19 and South Asia, June 2020 245 Mashal, SME Development and Regional Trade in Afghanistan, 2014 246 IFC, COVID-19 Business Pulse Survey, September 2020 247 IFC, COVID-19 Business Pulse Survey, September 2020 248 ILO, Study on the State of Employment in Afghanistan, 2012 249 Amnesty International article, August 2020
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In the early months of the pandemic, restrictions on MSMEs and other businesses engaged in food distribution disrupted the availability and inflated the prices of essential food for children; however, most such reports were limited to the first half of the year, as mobility restrictions were gradually eased starting July • COVID-19 disrupted food distribution SMEs: small traders have reported restrictions in procuring and transporting produce to local markets due to high transport costs and road closures; ~40 per cent of wholesale vegetable markets faced disruptions, while 50 per cent of agricultural street vendors halted activity as of May 2020250 B. Disruption in • Afghanistan depends on wheat imports from Kazakhstan (which accounted for 72 per products and cent of Afghanistan’s wheat imports in 2018), this could have compounded the impact services of disruption of distribution channels, as the distribution of imported essential food might have faced delays251 • These disruptions might have contributed to inflation in the prices of food items; from Dec 19 to March ‘20, prices of wheat (a staple) rose by 15 per cent, and that of cooking oil by 9 per cent252 • Such delays to food production and movement and resulting food inflation might have reduced children’s access to nutritious food, both physically and through enhanced affordability constraints There is limited evidence on the use of alternate sales and delivery channels like digital platforms by SMEs in the country C: Diversification • There is limited evidence on the usage of digital channels for service delivery by of sales and SMEs in Afghanistan delivery channels • Low internet penetration rates (11 per cent of population), compounded by geopolitical tensions which further reduce access to internet, are possible barriers curbing the growth of a digital ecosystem for SMEs253
Emerging evidence already shows that child undernutrition and vocational education have been adversely impacted due to these business responses, while anecdotal evidence suggests that drivers of mental health issues and school dropouts among children have been exacerbated; while limited evidence is available on domestic violence against children in light of COVID-19, the high pre-existing rates of domestic violence in the country keep it a cause of concern.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Afghanistan, with the impact of disrupted products and services having been limited to the early months of the pandemic.
Figure 15: MSME actions impacting child rights issues in Afghanistan
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
250 FAO, Impact of COVID-19 on food security and agriculture: Afghanistan, 2020 251 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic June 2020 252 FAO, Impact of COVID-19 on food security and agriculture: Afghanistan, 2020 253 World Bank data
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Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition Before COVID-19, 41 per Prolonged food security challenges cent children <5 years in arising from lower household incomes Afghanistan were suffering can exacerbate child undernutrition in from stunting, which was the country. Emerging evidence higher than the regional suggests that COVID-19 already average of 35 per cent for started to impact nutrition in South Asia; 10 per cent of Afghanistan in 2020: nearly 14.3 children <5 years were million additional people are suffering from wasting, projected to be in crisis because of which was lower than the food insecurity as a result of regional average of 14.8 lockdowns.254 In a survey of 409 per cent for South Asia. families in June, 90.2 per cent reported relying on less expensive and low- quality food to cope with income loss, 38.4 per cent reported reducing portion size, and 35.9 per cent reported reducing the number of meals per day; 51 per cent of households had no food stock, while 23.3 per cent expected food stock to last only 1 week.255 Child Protection Domestic violence 87 per cent of women in While there is limited concrete the country experienced evidence of higher rates of violence some form of gender- against women and children due to based violence even before the pandemic, the significant pre- COVID-19. existing rates of domestic violence in the country suggest that it is a continued area of risk. Rising household economic stress combined with home isolation norms might exacerbate this trend. Mental health issues Several decades of conflict Emerging evidence suggests that the resulted in persistent pandemic had already exacerbated mental health issues drivers of mental health issues among among children even children: in a small-scale survey of 72 before the pandemic. In a children in Afghanistan in May 2020, study undertaken by Save 74 per cent of the children surveyed the Children in 2019 prior reflected on their inability to see family to COVID-19, almost three- and friends to play and learn.256 quarters of parents whose children had been personally affected by conflict reported that their children showed signs of distress, suggesting that the COVID-19 crisis is likely to have similar adverse impacts. Moreover, the
254 World Bank, THE ECONOMIC IMPACT OF COVID-19 ON SOUTH ASIA, April 2020 255 World Vision, The Assessment of Socio-Economic Impact of COVID-19 on the Most Vulnerable Families of Afghanistan, June 2020 256 Save The Children, Children’s reflections on the impact of COVID-19 in Afghanistan, 2020
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availability of mental health support in the country is limited, with only 0.2 psychiatrists and 0.3 psychologists per 100,000 population. Education Basic education Prior to COVID-19, While schools in Afghanistan started Afghanistan had made to reopen in August 2020, risks of significant progress in children, especially girls, permanently education, increasing dropping out of education remained. enrolment by ~10x from While evidence of such drop-outs had 2001 to 2018, but 3.5 not emerged as of January 2021, million children, mainly experts hypothesize that increased girls, still remained out of caregiving responsibilities, combined school.257 with rising household poverty, are likely to depress the number of girls returning to school. These risks are especially high for internally displaced girls, who were deprived of education even prior to COVID-19: 65 per cent of displaced girls living in hard to reach areas were not enrolled in schools before COVID-19, and of the displaced children living in hard to reach areas attending school, only 6 per cent followed their school curriculum remotely since school closures, reducing their ability to catch up when schools did reopen. Moreover, anecdotal evidence shows that child marriage, a leading driver of school drop-outs among girls, increased during the pandemic.258 Vocational Education and Training Vocational learning and skill development among youth have largely been overlooked during the pandemic; lockdowns resulted in the closure of 300 TVET centres, while apprentices lost training opportunities and livelihoods.259
Few measures were taken by the government of Afghanistan in response to the immediate economic impacts of COVID-19; beyond the allocation of funds for fighting the spread of the virus, key relief measures included food price controls and in-kind transfers; some efforts were made to stimulate investments and liquidity in the economy.260
Limited dedicated action was taken to fundamentally safeguard workers, particularly informal workers, and explicitly protect child rights through government measures. Before COVID-19, social insurance systems in Afghanistan consisted mainly of old age or disability benefits for registered private
257 Naidoo & Arian, Afghanistan’s COVID-19 education response, 2020 258 Human Rights Watch, The impact of COVID19- on women and girls’ education, 2020 259 Kabir et al, Multi-modal TVET delivery during COVID-19: Expanding access to continued learning in Afghanistan 2020 260 ILO, Country Policy Responses, December 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 80 sector employees. Hence, there was a pre-existing need to provide comprehensive employment-related social insurance to workers in the private sector, especially in the poorest quintiles and among informal workers. However, COVID-19 response measures placed limited focus on fundamentally expanding and strengthening social insurance schemes, especially among informal workers. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
More notable relief efforts were made by external actors such as the World Bank, but continued to place inadequate emphasis on child rights and vulnerable segments like informal workers.
The Government of Afghanistan undertook some measures to allocate resources for curbing the spread of the virus and helping vulnerable segments meet daily needs. Relief was provided through measures such as in-kind transfers and food price controls: • 400 million Afghanis were allocated as emergency budget the for Herat province to meet conceivable challenges and deal with possible implications • 20 million Afghanis were allocated to each province of the central zone of the country, namely Kabul, Parwan, Kapisa and Maidan Wardak, for fighting the spread of covid-19 • In the northern region of the country, a committee was established to ensure price control of food items • In-kind transfers of wheat and other necessities were made to internally displaced persons, returnee migrants, and daily wage workers
Some macroeconomic measures were taken to stimulate investment and liquidity in the economy. To expedite investments, processes and durations for obtaining business licenses were eased. To ease tax compliance, the government extended filing deadlines from March to July. Additionally, tax cuts and exemptions were provided to some impacted businesses.
The World Bank took notable action to mitigate rising food insecurity and generate employment. The World Bank made a USD 280 million grant to reach over 90 per cent of the households under the Afghan government’s “Dastarkhan-e-Milli” food distribution programme, benefitting an estimated 4.1 million households with incomes of $2 a day or less. It also made a $100 million grant to improve food security in the country by increasing local food production and strengthening critical commercial food supply chains; the project also provided short-term employment in rural areas in the development of productive assets such as irrigation schemes.
With financial recovery assuming top priority for most MSMEs as they struggle to stay afloat, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Afghanistan; hence, there remain several opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection:
Table 8: List of potential interventions for UNICEF Afghanistan
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Support strengthening and expansion of social assistance and insurance systems through evidence building and advocacy Advocate for the establishment of state social insurance programmes, especially for MSMEs and workers in the informal private sector Rationale: There are limited existing state mechanisms to Relevance: provide employment-related protections and insurances to - All sectors workers; moreover, most COVID-19 policy responses have Business focus areas: not targeted informal workers (accounting for 80-90 per cent - Business as employers: Employees of of the total employed workforce). The absence of adequate businesses, in both the formal and social insurance for informal workers, combined with the high informal sector, need to be covered by likelihood of such workers losing their incomes due to social protections COVID-19, can reduce the affordability of nutrition, Potential partners: healthcare, and education for the children of these informal - Government of Afghanistan workers Work with UNDP, governments, and private sector actors to set up effective payments mechanisms for social protection Rationale: For effective execution of social protection Target sectors: measures such as cash transfers or grants, there is a need to - All sectors improve access to finance and bank services among poor and Business focus areas: marginalized populations. By working with the private sector - Business as provider of goods and services: in mobile/digital payment delivery, UNICEF could promote Providers of payment services to facilitate the financial inclusion of recipients. mobile/digital money transfer Potential ecosystem partners: - UNDP - Government of Afghanistan Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF could - Business as provider of goods and services; work with MSMEs and other actors to develop guidance and Business as employer; Business impact on tools (e.g., due diligence guidance on policy commitments communities and the environment: MSMEs and codes of practice for child rights, child safeguarding must take deliberate actions to not harm toolkit for MSMEs, child rights impact assessments, reporting the rights of children of their workers, in for MSMEs) for different sectors to understand the impact of the marketplace and in the broader their business decisions and operations on children and communities recover in a way that does not harm child rights. Potential ecosystem partners: - NGOs and foundations - Industry associations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for stronger family friendly workplace policies which enable caregivers to meet the nutritional and healthcare needs of children, such as breastfeeding support and paid maternal leave, with special focus on informal enterprises across sectors Relevance:
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Rationale: While the law mandates 12 weeks of fully paid - All sectors, with focus on sectors with maternal leave, this policy covers only 10-32 per cent of all high representation of women – carpets, employed women in the country; it is likely that women in agriculture informal work remain uncovered by these policies due to the Business focus areas: temporary and unprotected nature of their employment; as - Business as employer: MSMEs, particularly COVID-19 threatens to exacerbate child undernutrition, it is in the informal sector, can be held crucial to enact such policies which can enable caregivers to accountable to provision of maternity dedicate adequate time and focus to child nutrition (through leaves by strengthening of regulations practices like exclusive breastfeeding) in the critical early and enforcement childhood years Potential partners: - Ministry of Labour and Social Affairs - Employer and worker organizations - ILO Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt Relevance: family-friendly policies such as healthcare benefits, childcare, - All sectors on-site child-care centre through tax breaks or subsidies. Business focus areas: These measures could be implemented as part of the COVID- - Business as employer: MSMEs could 19 -19 relief stimulus packages. implement robust family-friendly policies Potential partners: - Government of Afghanistan Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Work with other UN agencies to generate evidence on and advocate for targeted government support for the skilling and integration of internally displaced persons into the workforce Rationale: Due to a complete halt of economic activity in IDP Relevance: All sectors camps during COVID-19, ~4 million displaced persons stood Business focus areas: at risk of losing their livelihoods, which, if unaddressed, can - The voice and influence of business: reduce access to nutrition, healthcare, and education for International and national companies and children in these vulnerable households. UNICEF could use their leaders could be engaged in businesses and business leaders as strategic partners to advocacy efforts amplify advocacy efforts. Potential partners: - Government of Afghanistan - ILO - UNDP Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene private sector schools and education providers, including MSMEs, to implement re-enrolment and back-to-school campaigns (especially for girls) aimed at communities and caregivers, as well as to collectively advocate for government support for such efforts Rationale: COVID–19 induced reductions in household Relevance: income have increased risks of permanent school dropouts - Programming area: Education among girls in Afghanistan, with a need for dedicated community and caregiver engagement to prevent dropouts Business focus areas: - The voice and influence of business: Private schools can mobilize community-level commitment to children’s education Potential partners: - Private schools and educational institutions
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- Ministry of Education Convene local businesses to advocate for government and foreign investment in the ICT sector, in order to widen access to internet services and facilitate digital channels of delivery of essential food, mental healthcare services, and education Rationale: With only 11 per cent of the population having Relevance: ICT and e-commerce sectors, access to the internet, digital channels of delivery for essential sectors with high impact on child rights – goods and services for children are not widespread in the agriculture and essential food services, country; targeted investment is needed in order to spur mental healthcare, education growth in the ICT sectors and enable providers to subsidize Business focus areas: costs for vulnerable populations; UNICEF can convene private - The voice and influence of business: sector stakeholders and providers to advocate for such MSMEs can serve as advocates for an investment investor-led digital transformation Potential partners: - Local businesses, start-ups, and MSMEs - E-commerce platforms - Finance providers (banks, MFIs) - Internet service providers - Digital payments platforms Convene private TVET institutions and providers to advocate for dedicated financial support to enable them to remain operational and provide continued learning for youth Rationale: Disruptions to vocational education have been Relevance: largely overlooked during the pandemic, with reports of - Education sector closures of TVET institutions; if unaddressed, this can significantly reduce the ability of youth to attain crucial Business focus areas: workforce skills. - The voice and influence of business: Private TVET providers can drive public and government recognition of the importance of vocational learning Potential partners: - Government of Afghanistan - TVET institutions - Ministry of Education Convene industry stakeholders to encourage business investment in family-friendly policies and sharing of best practices Rationale: Given the heightened need for family-friendly Relevance: All sectors policies in light of COVID-19, UNICEF could convene private- sector stakeholders to establish urgency and develop Business focus areas: mechanisms to encourage MSMEs to implement such - The voice and influence of business: policies, and drive cross-sector learnings. MSMEs and larger businesses can serve as change-leaders and champions of family- friendly policies Potential partners: - Employer organizations - The ILO Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Inclusive business models Identify and facilitate coordination among relevant private sector players (e.g., mental health providers, private schools, online platforms) to help them expand the reach of mental healthcare services for children and youth
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Rationale: Mental health issues prevailed among youth in Relevance: Healthcare sector Afghanistan even before COVID-19, with risks of exacerbation due to the pandemic; with increasing momentum in the digital Business focus areas: economy; expanding the provision of mental health services - Businesses as providers of goods and through touchpoints such as schools and, where possible, services: MSMEs can ramp up the digital channels is essential for ensuring that children and provision of crucial mental health services youth receive adequate mental health support during and for children, which are currently limited beyond COVID-19 Potential partners: - Private mental health service providers - Private schools Advocate with businesses to subsidize data and device costs for vulnerable families in order to promote digital channels for accessing nutritious food, healthcare and blended learning Rationale: If the currently low rates of internet penetration Relevance: are improved by increasing access and affordability, - ICT sector technology tools can be leveraged to deliver essential goods Business focus areas: and services for children such as nutrition and healthcare, as - Businesses as providers of goods and well as supplement school education to make up for learning services: MSMEs can promote alternate losses which occurred during school closures channels for delivering essential products and services for children Potential partners: - Internet service providers - Device manufactures
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8.2 Bangladesh
As of November 2020, Bangladesh had one of the highest numbers of COVID-19 cases in South Asia, with a significant rise in the number of cases since June despite the stringent measures. COVID-19 hit the country in mid-March triggering stringent measures from the government. The government declared a general holiday from March 26 to May 30, leading to the closure of government and private offices, and halted international and domestic travel261. Closures and movement restrictions were gradually relaxed starting May 31, however since mid-June some restrictions have been reimposed owing to the rise in COVID-19 cases. Up until November 2020, the country continued to enforce the most stringent mitigation measures in South Asia, and had reported total 464,932 confirmed cases, second highest in the region after India (Figure 16).
Figure 16: COVID-19 cases and stringency of measures262
500 100
400 80
300 60
200 40
100 20 IndexStringency Confirmed Cases (1000s) Cases Confirmed 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Average of Confirmed Cases (1000s) Average of Stringency Index
As a result, significant supply and demand shocks were experienced in the country, and severe deacceleration in economic growth has been projected for 2020. While the economic projections are still evolving, the latest projections from the IMF estimate that the GDP growth would slow down to 3.8 per cent in 2020, and recovery is expected to be over the next two years (Figure 17). Another study from UNICEF predicts an even greater impact, projecting economic contraction by 11.6 percentage points vs the without COVID-19 scenario for 2020. COVID-19 impacted economic growth in all sectors, but most prominently industry and services. The UNICEF study estimates GDP growth rate of 1.1 per cent in agriculture (vs 3.6 per cent without COVID-19), -5.2 per cent in industry (vs 12.6 per cent without COVID-19) and -3.4 per cent in services (vs 6.8 per cent without COVID-19) in 2020.263
261 IMF policy tracker 262 Oxford COVID-19 Government Response Tracker 263 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020
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Figure 17: GDP, constant prices, per cent change in Bangladesh264
10% 8.2% 7.9% 8%
6% 7.3% 7.3% 7.3%
4% 4.4% 2% 3.8%
0% 2019 2020 2021 2022 2023 2024 2025
IMF - Oct 2020 IMF - Oct 2019
The economic downturn is due in particular to the sharp contraction in flow of remittances from the workers employed in Europe and Middle East, drop in demand of Bangladesh’s exports (example, ready- made garments) in western markets, disruptions in supply of intermediate inputs from trading partners (example, ready-made garments and pharmaceuticals) and disruptions in the services industry. Other covariate shocks, including monsoon flooding and cyclone Amphan, have compounded the impact of COVID-19 on the economy and people’s livelihoods. Furthermore, Cox’s Bazar, world’s largest refugee settlement with 1 million refugees, is particularly vulnerable to the health and economic impact of COVID-19.
COVID-19 related restrictions also resulted in the disruption of essential health and child protection services. In a survey conducted across UNICEF Country Offices in September 2020, more than 50 per cent decline in coverage was reported for some health and nutrition services, and all child protection services due to COVID-19 (Figure 18).265
Figure 18: COVID-19 related change in coverage of services in Bangladesh266
Health services Nutrition services Child protection services Health campaigns for vaccination, LLIN Early detection of wasting (Screening) Civil registration services or mass drug distribution, etc. Health care for displaced and refugee Home visits by social service/ justice Treatment of child wasting populations workers Protection & promotion of breastfeeding Maternal Health services Access to available women and girls' programmes friendly spaces including support services Promotion of nutritious and safe diets for Newborn care services for GBV survivors, girls at risk of marriage young children (6-23 months) and married girls, and girls affected by Outpatient care for childhood infectious Nutrition support for pregnant and female genital mutilation diseases lactating women
Routine Vaccinations
No change <10 per cent 10-24 per cent 25-49 per cent 50-74 per cent >75 per cent drop drop drop drop drop
264 IMF, World Economic Outlook, October 2020 265 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 266 UNICEF, Tracking the situation of COVID-19
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While most sectors in the country witnessed significant negative economic and employment impact, some sectors also emerged as opportunity areas due to COVID-19 induced demand. A study by a2i, estimated that over 10.1 million workers, out of the total labour force of around 70 million267, were unemployed across 9 sectors (transportation, construction, furniture, RMG and textile, leather goods and footwear, tourism and hospitality, light engineering, migration sector, real estate and housing, and ceramics) by June 2020, and an additional 1.8 million workers were projected to lose their jobs by the end of 2020. The study also identified emerging sectors - pharmaceuticals, ICT and e- commerce, health-care services, food and beverages, and creative media – which witnessed rise in demand during the pandemic and are expected to have created new jobs.268 Figure 19 includes a high- level assessment of some of the key sectors in the country.
Figure 19: Sectoral impact of COVID-19 in Bangladesh
Key: Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment RMG and • RMG is a crucial sector in Bangladesh, generating annual export revenue of US$ 3.41 textiles billion, accounting for over 80 per cent of the country’s aggregate export value in 2019269 • RMG sector employed over 4 million people, and around 15 million additional jobs were directly or indirectly dependent on the sector (close to 30 per cent of the total labour force employed or dependent on the RMG sector)270 • Additionally, the sector is a large employer of women, as they represent nearly 80 per cent of the total workforce in RMG production271 • The sector is one of the most impacted sectors in Bangladesh due to global supply chain vulnerabilities, and suffered losses through suspended orders of over $3.17 billion (over 90 per cent of the pre-COVID-19 annual export revenue) 268 • Sector also suffered due to disruption in import of inputs from China (e.g., specialty chemicals, dyes)268 • Over 1 million garment workers (over 25 per cent of the total employed in the sector) were estimated to be dismissed or furloughed, and an estimated 0.5 million were permanently laid off272 • An estimated 80.4 per cent of the dismissed workers – mostly women – did not receive severance pay270 • Data from Bangladesh Garment Manufacturers and Exporters Association (BGMEA) showed a rise in exports in August and September, however, recent news articles suggest looming second waves of COVID-19 in western markets reversed the pickup in export demand in October Construction • The sector employed around 3.9 million people (5.6 per cent of the total workforce)273 • The sector is heavily impacted due to the backward linkages with other industries (e.g., steel, cement) that were shut due to COVID-19, halted work at construction sites, and declining consumer demand for housing projects268
267 The World Bank Data 268 a2i, Post COVID-19 Jobs and Skills in Bangladesh, June 2020 269 BGMEA 270 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020 271 The World Bank, In Bangladesh, Empowering and Employing Women in the Garments Sector, 2017 272 Anner, M. S., Abandoned? The Impact of Covid-19 on Workers and Businesses at the Bottom of Global Garment Supply Chains, 2020 273 ILO STAT Data
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• Small builders could perish in a prolonged lockdown and as financial support from banks becomes difficult to access268 • By the end of 2020, 1.2 million workers (30 per cent of the total employed in the sector) are projected to have lost their jobs268 • Recovery is expected to be slow, especially if lockdown persists, as lower disposable incomes of consumers is expected to impact long-term demand for housing and lockdowns have slowed down construction projects268 Furniture • The sector employed around 2.5 million un-skilled and semi-skilled people (around 3.5 per cent of the total labour force)274 • The sector has suffered due to lower domestic demand arising from lower disposable income and reduced exports268 • Micro and small enterprises, informally employing workers, are prominent in the sector; More than 40 per cent of these enterprises could permanently close in prolonged lockdowns268 • Estimated 0.6 million workers (nearly 25 per cent of the total employed in the sector) have been laid off with jobs not expected to return soon268 Transportation • The sector employed nearly 9 per cent of the total labour force in 2017 (more recent and storage estimates not available)273 • Challenges stemming from lockdown (for example, low demand for carrying goods, low number of commuters taking services) had significant immediate impact on the sector268 • 7 million jobs were estimated to have been lost in the sector, with unemployed workers comprising of daily-wage drivers, helpers, mechanics employed in public and private transportation, drivers registered with ride sharing apps (Uber, Pathao) and transport owners268 • However, sector was expected to revive, and workers were expected to be re- employed by the end of 2020 as the lockdown was relaxed and transport services resumed268 Leather goods • The sector, directly or indirectly, employed around 0.85 million workers, with around and footwear 70 per cent of the employees being women275 • Sector has seen severe impact as overall consumption has declined, with consumption forecasted to decline by 22.5 per cent by the end of the year 2020268 • Projections suggest that the sector has suffered losses of over $330 million through order cancellations268 • Majority of sector is comprised of micros and small enterprises, which are struggling to survive268 • Estimated 0.4 million workers (nearly 50 per cent of the total employed in the sector) have lost jobs268 • Businesses are likely to witness slow recovery as domestic demand would remain low and Europe, biggest leather export market for Bangladesh, is likely to cope with second and third wave of COVID-19268 Tourism • The tourism sector employed around 1.9 million people (around 2.7 per cent of the total labour force) and contributed to 3 per cent of the country’s GDP in 2019276 • 0.3 million workers are estimated to be unemployed due to COVID-19, including those working with registered and unregistered travel agencies, travel operators, hotels, cruises and tourist vessel operators268
274 IDLC, Bangladesh’s furniture industry, 2017 275 ADB, Developing the Leather Industry in Bangladesh, 2018 276 WTTC, Country Data
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• Unemployment rates are projected to remain high even as lockdowns are relaxed, as international tourism is not expected to revive before quarantine restrictions are removed.268 Pharmaceuticals • Demand of medical supplies and equipment has increased due to COVID-19, thus, and healthcare many RMG factories have started producing PPE, masks and other medical textiles (e.g., Walton, Marks & Spencers) 268 • 51,000 new jobs are estimated to have been created in 2020 in the factories manufacturing medical goods and pharmaceutical products268 • Mobility restrictions have also led to increase demand for digital health services, with Telenor health reporting 30 per cent increase in phone consultation services268 • Healthcare providers like PHWC (Psychological Health and Wellness Clinic), Mayalogy Limited, Praava Health are hiring doctors, counsellors, technicians, etc. to respond to the rising demand268 • 0.25 million new jobs are estimated to have been created in the healthcare sector in 2020268 ICT and e- • Demand for IT services has increased as businesses increased their digital presence commerce and transitioned to remote work268 • E-commerce platforms also witnessed surge in demand for home deliveries268 • Estimated 0.65 million new jobs could be created in the IT and e-commerce sector by end of 2021268 Food and • Workers are likely to be employed for production and processing of essential goods beverages as demand for agro-products is rising268 • 0.29 million new jobs are estimated to have been created in 2020268 Agriculture • Around 40 per cent of the labour force is engaged in agriculture, forestry and fishing273 • COVID-19 disrupted agricultural supply chain, farmers reported difficulties in obtaining agricultural inputs (e.g., seeds, fertilizers, pesticides, and diesel) and scarcity of labour277 • Rice mills, with the exception of aromatic rice processing mills, have reported to operate in full capacity277 • In July, frozen fish export orders worth USD 54.2 million were estimated to be cancelled; similarly, a decline in export of vegetables and fruits was reported277 • The recovery in the sector has been facilitated by government response, including declaration of a fair minimum support price for winter season rice, increased procurement of winter season rice, creation of mobile and short-duration markets for farmers and other stakeholders, creation of safe transportation of agricultural products277 • While the data on unemployment in the sector due to COVID-19 is not available, the ILO estimates that of the total youth job losses due to COVID-19 in 2020, 23 per cent job losses would be in the agriculture sector, due to the high contribution of the sector to youth, and overall, employment278 Tea production • Bangladesh is the nineth largest producer of tea in the world, and even before COVID-19 the industry was struggling with low labour wages; however, new pay rise was announced in October 2020279 • COVID-19 has placed additional economic stress on the already impoverished workers, particularly on women working in tea gardens280
277 FAO, Second rapid assessment of food nutrition security in the context of COVID-19 in Bangladesh, July 2020 278 ILO, ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, August 2020 279 UCA News, No end to slavery for Bangladesh's tea workers, October 2020 280 Needs Assessment Working Group, BANGLADESH, April 2020
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MSMEs, which contribute heavily to employment in the country, were hit hard by the pandemic with 80 per cent reporting loss of more than half of pre-crisis revenue. More than 6 million MSMEs provide employment to over 7.8 million people in the country and livelihood to 31.2 million people281, and contribute to approximately 25 per cent to the GDP282. In a survey in Bangladesh, 52 per cent of SMEs reported shutting down operations completely and an additional 28 per cent reported loss of more than half of the revenue (Figure 20). Moreover, in the same survey, 68 per cent of SMEs reported that a lockdown longer than 4 months will compel them to permanently shut down their business. Around 35-40 per cent SMEs in the country are cottage-based; COVID-19 has forced many of these SMEs out of business283. Declining orders have also caused significant revenue loss; in a survey of SMEs engaged in RMG products, 41 per cent of SMEs reported only being able to maintain less than 25 per cent of pre-crisis revenue (Figure 21) and 33 per cent of SMEs faced inventory overflows that led to additional costs.
Figure 20: Revenue decline faced by SMEs in Figure 21: Revenue decline faced by RMG SMEs in Bangladesh Bangladesh (percentage of respondents based on survey of 230 (percentage of respondents based on survey of 376 SMEs SMEs)284 dealing with RMG products in Dhaka City)285
Layoffs and wage cuts, used as a way by MSMEs to reduce costs, have triggered a significant decline in household incomes, limiting families’ ability to afford nutritious food and causing increased household stress, and potentially domestic violence. Interruptions in food supply chain, and the resulting price rises of food items, could further limit the affordability of food, although the impact is expected to be short-term. COVID-19 accelerated digitization of food and healthcare delivery is emerging as an opportunity area.
MSME Response: Cash flow struggles have impacted business’ ability to pay salaries and maintain employees, disproportionately affecting women employed in RMG A: Layoffs and sector, workers in informal employment, urban households and migrant workers wage cuts • In a survey, 24 per cent of SMEs reported cutting down salaries either to 0 or less than 10 per cent of total expenditure. In the same survey, 46 per cent of SMEs
281 Light Castle, COVID-19: Impact on Bangladesh’s SME Landscape, April 2020 282 Dhaka Tribune, Reviving MSMEs from Covid-19 impact, June 2020 283 a2i, Post COVID-19 Jobs and Skills in Bangladesh, June 2020 284 Light Castle, COVID-19: Impact on Bangladesh’s SME Landscape, April 2020 (Sample of 230 respondents interviewed in April 6-8 2020. SMEs across industries including agriculture, poultry, dairy, fisheries, jute diversified product, retail store, food processing, & services (tailoring, electrical, laundry, mobile recharge & MFS shop) 285 Md. Qamruzzaman, COVID-19 impact on SMEs in Bangladesh, 2020
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anticipated laying off more than half of the staff if the lockdown extended over 4 months286 • A study commission by a2i, estimated that 10 million people employed in SMEs (out of the total 70 million labour force) have become permanently unemployed due to COVID-19.287 • The high level of informality in Bangladesh (85 per cent of the workforce was in informal employment in 2017) is of particular concern, as 30-40 per cent of SMEs in the informal sector are expected to have shut permanently287, and their workers typically lack social protection. • Women are particularly at a higher risk of job loss due to their significant representation in the RMG sector, particularly in the lower end of the production chains.288 • 0.5 million migrant workers employed in Middle East, Europe and East Asian countries are estimated to have lost jobs, of which 0.3 million have returned to Bangladesh and are currently unemployed.289 • A UNICEF study estimated that the job losses and wage cuts could reduce the average household income by 19 per cent and increase the national unemployment rate by 3X relative to the without COVID-19 scenario in 2020. The national poverty rate was expected to rise to 34 per cent.290 • The impact of job losses and wage cuts is expected to disproportionately affect urban households, as the UNICEF study estimated an average 23 per cent income loss among households in urban areas vs 17 per cent income loss among households in the rural areas. Additionally, urban households often are not covered by social assistance programs and have lower savings to survive the economic shock.290 Impact on child rights: The decline in household incomes is already impacting the nutrition choices of families and causing increased household stress, and consequently domestic violence; reduced purchasing power could also limit access to healthcare and education. MSME Response: Closed markets and trade disruptions particularly impacted food supply in the country, resulting in price hikes of essential items • Agricultural production in the country was hampered due to the closer of agriculture input market, unavailability of agricultural workers; additionally, transport restrictions affected commercial value chains291 • Bangladesh is highly dependent on India for rice import (accounted for 82 per cent B. Disruption in of total imports in 2018), which exposed it to vulnerabilities from international trade products and disruptions292 services • Coupled with panic buying, disruptions in food supply resulted in rise of prices of various food items; Since Dec 19, domestic food price index rose by 1.9 per cent, with 25 per cent spike in price of potatoes, 13 per cent spike in price of rice293 Impact on child rights: Food supply chain disruptions limited physical availability of food during the lockdown, and price inflation of food items further limited affordability for families already struggling with reduced household incomes.
286 Light Castle, COVID-19: Impact on Bangladesh’s SME Landscape, April 2020 287 a2i, Post COVID-19 Jobs and Skills in Bangladesh, June 2020 288 WTO, The economic impact of covid-19 on women in vulnerable sectors and economies, 2020 289 a2i, Post COVID-19 Jobs and Skills in Bangladesh, June 2020 290 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020 291 UKAid, COVID-19: Bangladesh Multi-Sectoral Anticipatory Impact and Needs Analysis, 2020 292 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic, 2020 293 UKAid, COVID-19: Bangladesh Multi-Sectoral Anticipatory Impact and Needs Analysis, 2020
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MSME Response: SMEs, particularly in the food services and healthcare sectors, have been seen to leverage digital channels to overcome mobility restrictions. For example - • Pathao relaunched its ‘Tong’ service and launched Pathao Shop to provide non- C: Diversification essentials before the Eid-ul-Fitr294 of sales and • Foodpanda launched Pandamart to deliver groceries and medicines, followed by delivery Shohoz starting similar services295 channels • Praava Health launched a low-cost video consultation services to tackle the upsurge in healthcare advice in demand296 Impact of child rights: Online delivery channels could expand the access for healthcare and nutritious food among children and families, particularly the erstwhile unserved/underserved populations.
Box 3: Trends in CSR funding and priorities in 2020 in Bangladesh
• While CSR guidelines exist, lack of monitoring of CSR fund disbursement and inadequate institutional policy support were expected to have become a barrier in mobilizing CSR spending during the pandemic297 o In 2008, Bangladesh Bank established CSR guidelines for the financial sector to allocate a portion of companies’ profits as CSR outlays; companies could spend up to 30 per cent on education, 20 per cent on health care and 10 per cent on climate and disaster management • In the initial months, companies generally focused on addressing the immediate health and economic impact of COVID-19 through cash donations, in-kind contributions and temporary operational restructuring to mitigate the health crisis, and contributions to combat the economic impact297 o Examples of cash donations or in-kind contributions include: ̅ Giorgio Armani funded hospitals and Dolce & Gabbana funded medical research ̅ Companies, such as Summit Group, contributed to Prime Minister’s Relief Fund ̅ Several companies, such as Navana Grop and Akij Group, setup temporary hospitals or isolation zones at their facilities ̅ Beximco Pharma donated PPE, medications and test kits o Examples of companies re-organizing their operations include: ̅ General Motors changed its production lines to manufacture ventilators ̅ Walton Electronics, after receiving patent and source codes from Medtronic, started manufacturing ventilators, PAPRs, and oxygen concentrators in the country ̅ Marks & Spencer and BGMEA converted production lines to produce PPE ̅ Online meal delivery companies, such as Pathao and Foodpanda, included retail stores in their operations o Companies generally focused on the manufacturing sector for CSR spending to combat the economic impact of COVID-19 • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 3.4 million came from the private sector, of which nearly all the funding was directed towards emergency health and economic relief efforts298
Decline in remittances is further expected to exacerbate the negative consequences of reduced household incomes from layoffs and wage cuts. Remittances contributed to 5 per cent of Bangladesh’s GDP in 2019. Due to the global nature of the COVID-19 crisis, the World Bank projected a 22 per cent decline in remittance inflows in the country in 2020. This is particularly of concern as remittances provide a steady source of income to meet essential needs for many households in the
294 Delivery Services in Bangladesh: Coping with COVID-19 295 Delivery Services in Bangladesh: Coping with COVID-19 296 a2i, Post COVID-19 Jobs and Skills in Bangladesh, June 2020 297 Lightcastle, Mobilizing CSR Funding to Tackle Covid Fallout, April 2020 298 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 93 country. In 2014, the Bangladesh Institute of Development Studies’ survey found that around 34 per cent of remittances are used for food expenditure.299
Even before COVID-19, undernutrition, violent discipline for children, primary and secondary education enrolment and child online protection were areas of focus in Bangladesh.
Figure 22: Key child rights indicators for Bangladesh in 2019
Area Indicator Bangladesh300 Nutrition Exclusively breastfeeding: Percentage of infants under 6 months of age who are exclusively 62.6 per cent breastfed Stunting: Percentage of children under age 5 who suffer from: (a) 28.0 per cent (a) moderate and severe stunting (b) 8.8 per cent (b) severe stunting Wasting: Percentage of children under age 5 who suffer from: (a) 9.8 per cent (a) moderate and severe wasting (b) 2.3 per cent (b) severe wasting Overweight: Percentage of children under age 5 who suffer from: (a) 2.4 per cent (a) moderate and severe overweight (b) 0.8 per cent (b) severe overweight Child Violent discipline: Percentage of children age 1-14 years who experienced any physical 88.8 per cent protection punishment and/or psychological aggression by caregivers in the past one month Child labour: Percentage of children age 5-17 years who are involved in child labour 6.8 per cent Education Attendance to early childhood education: Percentage of children age 36-59 months who 18.9 per cent are attending an early childhood education programme Net attendance ratio (adjusted): Percentage of children of (a) primary school age currently attending primary or secondary school (a) 85.9 (b) lower secondary school age currently attending lower secondary school or higher (b) 57.8 (c) upper secondary school age currently attending upper secondary school or higher (c) 48.1 Primary Antenatal care coverage: Percentage of women age 15-49 years with a live birth in the last healthcare 2 years who during the pregnancy of the most recent live birth were attended at least once 75.2 per cent by skilled health personnel Institutional deliveries: Percentage of women age 15-49 years with a live birth in the last 2 53.4 per cent years whose most recent live birth was delivered in a health facility Post-natal health check for the newborn: Percentage of women age 15-49 years with a live birth in the last 2 years whose most recent live-born child received a health check while in 66.7 per cent facility or at home following delivery, or a post-natal care visit within 2 days after delivery Care-seeking for diarrhoea: Percentage of children under age 5 with diarrhoea in the last 2 29.5 per cent weeks for whom advice or treatment was sought from a health facility or provider Care-seeking for children with acute respiratory infection (ARI) symptoms: Percentage of children under age 5 with ARI symptoms in the last 2 weeks for whom advice or treatment 46.4 per cent was sought from a health facility or provider WASH Use of basic drinking water services: Percentage of household members using improved sources of drinking water either in their dwelling/yard/plot or within 30 minutes round trip 98.0 per cent collection time Handwashing facility with water and soap: Percentage of household members with a 74.8 per cent handwashing facility where water and soap or detergent are present Use of basic sanitation services: Percentage of household members using improved 64.4 per cent sanitation facilities which are not shared
The business responses could particularly exacerbate issues of undernutrition, access to treatment for endemic diseases, mental health issues among children, access to basic education and domestic violence.
299 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020 300 MICS 2019- Bangladesh
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Figure 23: MSME actions impacting child rights issues in Bangladesh
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Recent evidence suggests that In a study in Bangladesh, 66 per cent Caregivers with access to digital platforms COVID-19 is already impacting respondents reported closed market have an alternate source of obtaining food, nutrition. In a study in Bangladesh, as the main challenge in acquiring but those without access may face risks of 75 per cent of respondents reported nutritious food303 further exclusion. Online platforms such as having insufficient access to food at Pathao expanded their operations to include home, of which 91 per cent did not retail stores during the pandemic. have sufficient money to buy food. 70 per cent indicated they couldn’t provide a varied diet to children between 6 and 23 months301. Due to COVID-19, an estimated 5,400 to 28,140 additional children under five years of age may die over a period of six months302 Child Protection Domestic violence In a study by NAWG, 42 per cent of respondents reported increase in beatings by parents and 50 per cent considered girls’ safety and security to be an issue in the lockdown304. Previous evidence has established a strong link between both female and male unemployment, and domestic violence.305,306 Mental health issues Bangladesh’s suicide rate amongst 5 -14 years is 125 per cent higher than global averages, far exceeding all other in-scope countries for this study307. The impact of COVID-19 on child mental health could be amplified by country’s poor gender-based violence record, with 54 per cent of women disclosing physical and/or sexual violence from a partner in their lifetime308, and extremely low mental health coverage, with only 0.1 psychiatrists and psychologist per 100,000 population309 Education Basic education As families struggle to afford Disruptions to private education Bangladesh has amongst the lowest number education needs, children, especially providers, e.g., reported closures of of individuals using the internet and still lags girls, are at risk of falling behind in some small private schools, as a result
301 UKAid, COVID-19: Bangladesh Multi-Sectoral Anticipatory Impact and Needs Analysis, 2020 302 Roberton et al (2020) 303 UKAid, COVID-19: Bangladesh Multi-Sectoral Anticipatory Impact and Needs Analysis, 2020 304 NAWG, Coordinated Preliminary Impact and Needs Assessment. Dhaka, 2020 305 Anderberg et al, 2016, Unemployment and Domestic Violence: Theory and Evidence 306 Anderberg & Rainer, 2011, Domestic Abuse: Instrumental Violence and Economic Incentives 307 Hannah Ritchie, Max Roser and Esteban Ortiz-Ospina, 2015, Suicide 308 UNFPA, 2020, Violence Against Women - Regional Snapshot 309 WHO, 2020, Global Health Observatory data repository
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remote education and dropping out of COVID-19 may impact children’s in fixed and mobile broadband subscriptions completely from the system access to basic education and speed310. With widespread school closures shifting education to remote learning, children in Bangladesh are at particular risk as it ranks low in the inclusive internet index for availability, affordability and relevance.311 Primary Healthcare Endemic / communicable Dominance of private primary Caregivers with access to digital platforms disease treatment healthcare reduces affordability of have an alternate source of accessing treatment services - 77 per cent of treatment for their children, but those health expenditure is privately paid without access face risks of further exclusion for, indicating that treatment for endemic diseases might become unaffordable due to income loss312
While WASH is an area of focus, link from MSME activity to consequences in WASH is weak.
Government’s monetary and fiscal response to combat the impact of COVID-19 on MSMEs has been promising, especially the targeted actions towards the RMG sector. However, most of these measures were temporary and less likely to reach the informal sector. Four stimulus packages of USD 8 billion (equivalent to 2.52 per cent of the country’s GDP) were announced. Bangladesh Bank adopted measures to enhance the credit and liquidity, and implemented programmes for employment retention. Measures included: temporary interest-free loan to pay wages, direct allowances for workers employed in export-oriented sectors. To support SMEs, government’s stimulus package reserved USD 2.3 billion as working capital for SME’s at an interest rate of 9 per cent, with 5 per cent of the interest being borne by the government. A USD 355,000 refinance scheme was also launched for low-income groups, farmers, and marginal and small businesses. The RMG sector received USD 1.24 billion to pay wages from April to July 2020. BGMEA also received USD 155,660 to help the families of 66 RMG workers, who died during the pandemic. However, most of these measures were aimed at providing relief during the lockdown and were less likely to reach the informal sector313.
Before COVID-19, the country provided limited lifecycle social assistance, with only 33 per cent of households receiving a low value transfer. Small, targeted schemes, many of which were provided only in-kind transfers and livelihoods or social development programmes, were delivered through more than a hundred programmes.314
Figure 24: Social security schemes in Bangladesh and levels of investment314 (Note: Does not include Public Service Pension)
310 Worldbank, 2020, Data Bank 311 EIU, 2020, The Inclusive Internet Index 2020 312 World Bank data 313 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 314 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020
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Childhood Working Age Disability Old Age (0.11 per cent of GDP) (0.10 per cent of GDP) (0.03 per cent of GDP) (0.28 per cent of GDP)
Maternity allowances for Allowances for widow, Allowances for financially Old age allowances poor destitute and deserted insolvent diasabled women Honorariums for freedom Primary school stipends Employment generation fighters Secondary school stipends programmes for the poorest Disability stipends
During the pandemic, the government expanded coverage of social assistance programmes to additional vulnerable groups, primarily through cash transfers and in-kind transfers. However, these expansions were mostly short-term and inadequate.
In-kind transfers, especially food assistance, were increased to mitigate nutritional risks315: • 10.25 million people would receive cash and food assistance, with 5 million granted free food, and the remaining assisted through the flagship Special Open Market Sales programme • Food Friendly Programme was extended to allow poor and unemployed people to buy up to 30kg of rice per month at BDT10/kg • Fortified biscuits were distributed to around 3 million children in primary-schools
Cash transfers’ coverage was increased from 15 million to 39.8 million beneficiaries315,316: • A one-off cash benefit of BDT2,500 announced for 5 million households who suffered livelihood losses during the lockdown • Monthly stipends for 14 million children in pre-primary and primary schools was increased, with children in pre-primary schools receiving BDT75 per month (erstwhile BDT50) and children in primary schools receiving BDT150 per month (erstwhile BDT100), plus a one-off payment of BDT1,000 • Old age allowances rolled out to 500,000 additional beneficiaries • Widowed, deserted and destitute women allowances rolled out to an additional 350,000 beneficiaries • Financially insolvent disabled allowances rolled out to an additional 300,000 beneficiaries
However, these social assistance measures costed around 0.16 per cent of 2019 GDP and are estimated to have limited coverage. Moreover, the value of the cash transfers were low and insufficient for recipient households. For example, the one-off transfer to 5 million households represented 12 per cent of the average monthly household expenditure316.
A new round of government stimulus packages were announced in 2021 to provide more support to SMEs and vulnerable populations. In January 2021, government approved two more stimulus packages worth Tk2,700 crore (USD 318.7 million). The first package included Tk300 crore to SME
315 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 316 UNICEF, Tackling the COVID-19 Social and Economic Crisis in Bangladesh, December 2020
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Foundation to expand operations for cottage and SMEs, and the second package, of Tk1,200 crore, is targeted towards poor people, widows and husband abandoned women317.
In Bangladesh, private sector engagement has been identified as a critical element of UNICEF’s country programming, with eight key PSE initiatives underway. The PSN mentions plans to introduce innovative government-NGO-private sector partnerships for promotion of health, sanitation and ECCD, and establish a platform to facilitate and explore strengthened private sector collaboration318. There are significant ongoing initiatives:
1. Health: partnership with Igloo (Ice Cream manufacturer) for cold chain support to roll out Measles Rubella campaign 2. WASH: Sanitation mart initiative and partnership with UNILEVER on supply of hygiene products in response to COVID-19 3. Nutrition: Mothers@Work initiative with Garment factories 4. Child Protection: partnership with Grameenphone (Telenor) on Child Online Safety 5. Urban: delivery of basic services in urban slums where garment workers come from, in partnership with garment brands (ECI, VF, Gina Tricot) 6. Better Business for Children (BB4C) initiative with garment factories 7. U-report: using MNOs for real time data collection and management 8. GenU: partnership with private sector for skill building and entrepreneurship
There are several opportunities for UNICEF to ramp-up existing efforts, and consider new interventions, to engage with the MSMEs and other actors to mitigate impacts of COVID=19.
Table 9: List of potential interventions for UNICEF Bangladesh
Support strengthening and expansion of social protection systems through evidence building and advocacy Continue advocacy for emergency, lifecycle universal transfers for children and vulnerable families Rationale: While the social assistance programs were Relevance: expanded by the government, the measures were focused on - All sectors providing support during the lockdown and were inadequate Potential partners: to meet the requirements of households impacted by COVID- - Government of Bangladesh 19. As the impact from COVID-19 prolongs, long-term strengthening of social assistance will be key. Income guarantee through social assistance for families and vulnerable groups would enable child well-being, including protecting the nutritional health and cognitive development of children. Universal schemes could be more effective and simpler to deliver than the current targeted schemes. Work with the ILO to advocate for stronger employment protection for workers, particularly in the informal sector Relevance:
317 Dhaka Tribune, Govt approves 2 more stimulus packages worth Tk 2,700cr, January 2021 318 Desk Review: Private Sector Engagement at UNICEF ROSA
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Rationale: In particular, social insurance programmes are - Sectors with high degree of informality – currently weak in Bangladesh, and inadequate for addressing agriculture, wholesale and retail trade, the vulnerability of informal sector. Social insurance measures construction, furniture would protect the incomes of workers against job losses and Potential partners: wage cuts, enabling them to meet the needs of their children. - Government of Bangladesh - The ILO - Worker Organizations Work with UNDP, governments and private sector actors to set up databases and effective payments mechanisms for social protection Rationale: For effective execution of social protection Relevance: measures such as cash transfers, reforms to registration - All sectors mechanisms, management information systems and payment systems would be key. This would enable social protection Potential partners: programs to expand coverage and households to receive the - Government of Bangladesh assistance in a timely manner. - Commercial and payment banks Advocate for stronger social assistance for returnee migrants Rationale: From April to August 2020, 95,000 migrant Relevance: workers, over 90 per cent male, are expected to have - All sectors returned to the country due to job losses. GoB provided these workers investment credit at 4 per cent interest from a Tk700 Potential partners: crore (US$ 82.55 million) fund. Stronger assistance for the - Government of Bangladesh households facing loss of remittance incomes will be key to support them in meeting nutritional and other needs of children. Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF could - Business as provider of goods and services; work with MSMEs and other actors to develop guidance and Business as employer; Business impact on tools (e.g., due diligence communities and the environment: MSMEs guidance on policy commitments and codes of practice for must take deliberate actions to not harm child rights, child safeguarding toolkit for MSMEs, child rights the rights of children of their workers, in impact assessments, reporting for MSMEs) for different the marketplace and in the broader sectors to understand the impact of their business decisions communities and operations on children and recover in a way that does Potential ecosystem partners: not harm child rights. - NGOs and foundations - Industry associations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Expand work with sectors that have high representation of women to help them develop practices and hygienic infrastructure to promote and support exclusive breastfeeding at workplace Rationale: COVID-19 has heightened the need for Relevance: implementation of workplace practices and hygienic facilities - Sectors with high representation of to support and encourage women to continue breastfeeding. women – RMG, leather and footwear, Employers can also educate and alleviate fear of working retail trade mothers regarding breastfeeding during COVID-19. Potential partners:
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- MSMEs - Bangladesh Garment Manufacturers and Exporters Association - Leathergoods and Footwear Manufacturers & Exporters of Bangladesh Advocate for policies and mechanisms to ensure paid maternity leave in both formal and informal sectors Rationale: According to the law, working mothers are to be Relevance: allotted 4 months of maternity leave, 8 weeks of prenatal - Sectors with high representation of leave and 8 weeks of postnatal leave. This law has been women – RMG, leather and footwear, implemented unevenly in Bangladesh resulting in disparate education, retail trade practices in different industry sectors. Despite the number of Potential partners: women in the RMG sector, the industry has not issued a - National governments directive regarding maternity leave which means there is no - ILO unified standard. Policies for paid maternity leaves are particularly important in light of COVID-19, as in absence of these policies, employers may single out pregnant women and new mothers for layoffs or furloughs. Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt Relevance: family-friendly policies such as healthcare benefits, childcare, - All sectors on-site child-care centre through tax breaks or subsidies. Potential partners: These measures could be implemented as part of the COVID- - Government of Bangladesh 19 relief stimulus packages. Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Advocate for economic stimulus package for other labour-intensive sectors, beyond RMG, with high degree of informality Rationale: While RMG has received much attention due to its Relevance: Labour-intensive sectors with high contribution to the economy and employment, focus on high degree of informality – agriculture, other labour-intensive sectors, which have high degree of furniture, construction, agriculture, leather informality has been limited. and footwear Potential partners: - UNDP - Government of Bangladesh - Leathergoods and Footwear Manufacturers & Exporters of Bangladesh Generate evidence and advocate with government for specific measures targeted towards MSMEs in the informal sector Rationale: MSMEs in the informal sector have been harder to Relevance: Sectors with high level of reach through COVID-19 specific policy measures due to their informality – agriculture, wholesale and retail low levels of financial inclusion. trade, construction, accommodation and food services, furniture, leather and footwear
Potential partners: - The ILO, World Bank - Government of Bangladesh Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy
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Convene industry stakeholders to encourage business investment in family-friendly policies and sharing of best practices Rationale: Provision of family-friendly policies remains low Relevance: All sectors among MSMEs. Given the heightened need for such policies in the light of COVID-19, UNICEF could convene private- sector stakeholders to establish urgency and develop Potential partners: mechanisms to encourage MSMEs to implement such - Bangladesh Garment Manufacturers and policies, and drive cross-sector learnings. Exporters Association - Leathergoods and Footwear Manufacturers & Exporters of Bangladesh - The ILO Convene tech industry stakeholders to encourage use of digital for safeguarding and promoting children well-being Rationale: COVID-19 has accelerated use of digital delivery Relevance: for nutritious food, healthcare, education in Bangladesh. - ICT or e-commerce sectors However, children’s considerations, particularly of those from Potential partners: vulnerable groups, are often not taken into account in - UNDP designing digital products. - Technology players such as Facebook, Google, Amazon Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Expand programs such as GenU for re-skilling of laid off workers Rationale: As COVID-19 changes create new jobs in sectors Relevance: such healthcare, pharmaceuticals, ICT and e-commerce, re- - Healthcare, pharmaceuticals, ICT and e- skilling of workers will be key to increase their employability commerce Potential partners: - Government of Bangladesh - Public and private polytechnic institutes and technical schools and colleges - Directorate of Technical Education - Big tech companies - UCEP, ILO Advocate with businesses to subsidize data and device costs for vulnerable families in order to promote digital channels for accessing nutritious food, healthcare and blended learning Rationale: Current trends of MSMEs using digital channels to Relevance: supply food or provide healthcare are encouraging. Digital - ICT sector can be used as an opportunity to expand access of these Potential partners: services in currently underserved populations. Tech tools can - Internet service providers be leveraged to supplement school education to improve - Device manufactures learning outcomes even as schools re-open. Mobile industry has responded with measures to subsidize internet costs in some countries (special assistance packs by Robi Axiata in Bangladesh319) Encourage development of light mobile applications that can be operated on low speed internet to access essential services for children Rationale: 51 per cent of population in Bangladesh still Relevance: accesses 2G internet320, thus poor connectivity could be a key - ICT sector
319 GSMA, Mobile economy in Asia Pacific, 2020 320 GSMA, Mobile economy in Asia Pacific, 2020
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challenge in accessing digital services such as remote Potential partners: learning, healthcare, mental health support. Applications with - Mobile app developers limited animations and compressed images can be specially - Online content developers designed for such users.
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8.3 Nepal
Nepal implemented strict containment measures during the early onset of the pandemic, with a gradual easing of measures starting July 2020; however, cases continue to grow rapidly as of November 2020. Nepal’s first confirmed COVID-19 case was on January 23, 2020. At end-March, the authorities imposed a nationwide lockdown, a ban on domestic and international flights, and a closure of land border crossings. The government lifted the national lockdown on July 22, 2020 but since had to reimpose some restrictions because of rapidly rising COVID-19 cases, which continued to increase sharply as of November 2020 (Figure 25)321.
Figure 25: COVID-19 cases & Stringency of measures322
300 120
100
200 80
60
100 40 Stringency IndexStringency
20 Confirmed cases cases (1000s)Confirmed
0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases (1000s) Stringency Index
The economic impact of COVID-19 is expected to be severe in 2020, with an estimated slowdown in GDP growth rate to 0.02 per cent; recovery is expected over 2 years. While the economic projections are still evolving, as of October 2020, the IMF estimated that the GDP growth would slow down from a formerly projected 6.3 per cent to 0.02 per cent in 2020, with an expected recovery to 6 per cent GDP growth in 2022 (Figure 26).
Figure 26: GDP, constant prices, per cent change323
10%
8% 7.1% 6.0% 6%
4% 5.2% 5.0% 5.0% 2% 0.0% 2.5% 0% 2019 2020 2021 2022 2023 2024 2025
IMF - Oct 2020 IMF - Oct 2019
321 Oxford COVID-19 Government Response Tracker 322 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 323 IMF, World Economic Outlook, October 2020
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COVID-19 related restrictions also resulted in the severe disruption of nutrition and protection services for mothers and children, while health services remained minimally disrupted. In a survey conducted across UNICEF Country Offices in September 2020, a 75-100 per cent decline in coverage was reported for most nutrition and protection services due to COVID-19, with at least 50 per cent coverage decline in all nutrition services.324 (Figure 27)
Figure 27: COVID-19 related change in coverage of services325
Health services Nutrition services Child protection services Health campaigns for vaccination, Early detection of wasting (Screening) Civil registration services LLIN or mass drug distribution, etc. Health care for displaced and Home visits by social service/ justice Treatment of child wasting refugee populations workers Protection & promotion of Access to available women and girls' Maternal Health services breastfeeding programmes friendly spaces including support Outpatient care for childhood Promotion of nutritious and safe diets services for GBV survivors, girls at risk infectious diseases for young children (6-23 months) of marriage and married girls, and Nutrition support for pregnant and girls affected by female genital Routine Vaccinations lactating women mutilation
Not applicable No change <10 per cent 10-24 per cent 25-49 per cent 50-74 per cent >75 per cent drop drop drop drop drop
While some sectors (readymade garments, travel and tourism, construction) witnessed significant negative economic impact, other sectors (food and beverages, agriculture) were projected to or started to recover over the course of 2020; the e-commerce sector even emerged as an opportunity area due to COVID-19 induced demand and growth. The economic impact on readymade garments, tourism and travel, and construction is expected to be significant and prolonged, while the agriculture sector started to partially recover in 2020 itself. The food and beverages sector was also projected to partially recover in 2020, but evidence of such recovery is unavailable. On the other hand, signs of positive growth and job creation have been noted in the e-commerce sector, but similar growth had not been reported in the healthcare or pharmaceuticals sector. Figure 28 presents a high- level assessment of some of the key sectors in the country.
Figure 28: Sectoral impact of COVID-19 in Nepal
Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment Readymade • The sector, which had an output of USD 85 million in 2018-19, contributes ~1.8 per garments cent of the total employment in the country and 3.2 per cent of the total manufacturing exports
324 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 325 UNICEF, Tracking the situation of COVID-19
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• As of May 2020, the garment sector’s output had reduced by 95 per cent, with a capacity utilization rate of 5 per cent, impacting both large producers and MSMEs • By May itself, the sector had lost USD 1.25 billion in export revenues, or nearly 25 per cent of the previous fiscal year’s export receipts, owing to order cancellations • The sector was expected to face prolonged losses, due to continued downturn in global demand, with recovery projected over 12 months (by May 2021), leading to a 50 per cent loss of employment in the sector326 • Marginal signs of growth were noticed in the second half of 2020, e.g., local small- scale handloom producers saw a 60 per cent surge in demand from India in September 2020, but did not outweigh the overall losses, as second waves of the pandemic in other major importers (Europe, US) of the sector’s output likely kept the sector’s exports depressed Tourism and • The sector, which contributes 6.7 per cent of the country’s GDP and 6.9 per cent of travel total employment327, was severely impacted by the lockdown and halt of tourism activities; as of July 2020, the tourism sector had incurred losses worth USD 330 million, or ~45.5 per cent of the total tourism receipts in 2019328 • Given that the country opened itself to international tourist arrivals by air only in December 2020, losses to the sector were likely prolonged • According to a study by Nepal’s central bank in August 2020, the tourism sector accounted for the majority of job losses in the country329; moreover, the hotels and restaurants sector, which is a major component of the tourism sector, is expected to drive ~13 per cent of youth job losses due to COVID-19 in the country330 • International and domestic flights were resumed in September 2020, but only on a limited basis, leading to prolonged losses in the aviation sector; as of November 2020, the aviation sector had incurred USD 17.6 billion worth of revenue losses, an 80 per cent decline in income331 • Related sectors and MSMEs like small handicraft producers, street vendors, roadside food stalls, etc. can be expected to have suffered due to this significant downturn of travel and tourism activities Construction • The sector contributes 7.8 per cent of the country’s GDP and 13.8 per cent of total employment • As of July 2020, the sector had lost USD 64 billion, or 27.5 per cent of total 2019 revenue • From February-July 2020, only 15-20 per cent of construction activity was taking place; this was also reflected in slowdowns in related sectors during the same period – the steel industry was operating at 25 per cent capacity, while cement factories were operating at 20 per cent capacity and 80 per cent lower demand • As of May 2020, ~78 per cent of workers in the sector were estimated to have lost their jobs, with another 18 per cent receiving 50 per cent of their wages332; the sector is expected to drive ~22 per cent of youth job losses due to COVID-19 in the country333
326 SAWTEE, COVID-19 and Nepal, May 2020 327 WTTC, Asia-Pacific Economic Impact from COVID-19, November 2020 328 Indian Express, Nepal's tourism sector faces USD 330 million loss due to COVID-19 lockdown, July 2020 329 Business and Human Rights Resource Centre, Nepal: Central Bank study finds nearly a quarter of Nepali workers have lost jobs due to COVID-19, August 2020 330 ADB/ILO, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, 2020 331 TourismMail, Nepal's aviation sector revenue declines by 17 billion rupees, 2021 332 The Asia Foundation, THE IMPACT OF COVID-19 LOCKDOWN ON NEPAL’S CONSTRUCTION SECTOR: A RAPID ASSESSMENT, May 2020 333 ADB/ILO, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, 2020
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• While more recent data is unavailable, economists and industry experts projected continued losses over 2020, severely impacting both large construction firms and small- and mid-sized contractors in the sector • Moreover, ~33 per cent of workers in the sector are Indian labourers who had returned to India during the lockdown; since Nepal-India air travel was resumed only in December 2020, labour shortages and production downturn were likely sustained throughout 2020334 Food and • Food industries occupy the most important role in the country’s manufacturing sector, beverages accounting for 34 per cent of total manufacturing value added • As of May 2020, only 30 per cent of essential food manufacturing units, including MSMEs, were operational, and were operating at a reduced capacity utilization rate of 40 per cent • 80-85 per cent of the sector’s expected revenues had been forgone as of May 2020, and 85 per cent of the employees were not working335 • While more recent data is unavailable, it was projected that the essential food manufacturing sector would recover within 2 months of the lockdown being removed, i.e., by September 2020, although non-essential food and beverage manufacturing would take longer to recover336 Agriculture • The sector contributes 24 per cent of the country’s GDP and 65 per cent of total employment • Disrupted supply channels did hinder agricultural activities in the initial months of the lockdown and obstructed preparation for the upcoming agricultural season • However, resumption of agricultural supply chains, along with a good monsoon, contributed to some recovery in the sector by mid-2020, with positive impacts on smallholder farmers and MSMEs involved along the supply chain as input suppliers, traders, processors, etc. • The sector was predicted to post a positive growth rate of 2.5 per cent for the financial year ending July 2020, indicating that the initial disruptions were well on the way to recovery; however this projected growth rate was lower than the 5.1 per cent growth rate of the previous year, owing to hindered preparation activities during the early lockdown months337 • However, despite this recovery, according to a study by Nepal’s central bank in August 2020, agriculture (along with fisheries and forestry) was the second largest driver of job losses in the country, after tourism338; agriculture is expected to drive ~13 per cent of youth job losses due to COVID-19 in the country339 ICT and e- • The sector has grown strongly, due to increased demand for online delivery of commerce consumer goods and durables; MSMEs were seen to increasingly adopt digital sales channels, with 20 per cent of surveyed MSMEs having turned to e-commerce as of June 2020 • The sector also began to emerge as a lever of job creation, with 2,500 additional hired having been made in the sector in the last few months of 2020340
334 Kathmandu Post, As pandemic slows down economic activities, construction sector hits a brick wall, July 2020 335 SAWTEE, COVID-19 and Nepal, May 2020 336 SAWTEE, COVID-19 and Nepal, May 2020 337 UNDP, RAPID ASSESSMENT OF SOCIO-ECONOMIC IMPACT OF COVID-19 IN NEPAL, 2020 338 Business and Human Rights Resource Centre, Nepal: Central Bank study finds nearly a quarter of Nepali workers have lost jobs due to COVID-19, August 2020 339 ADB/ILO, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, 2020 340 Kathmandu Post, Covid-19 creates job openings in e-commerce sector, 2021
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MSMEs, which constitute ~99.8 per cent of all enterprises in Nepal and are characterized by high degrees of informality (85 per cent of MSME employment is informal), were severely impacted, with >50 per cent of surveyed MSMEs having reported risks of permanent business closure as of June 2020. SMEs contribute 22 per cent of Nepal’s total GDP, accounting for 99.9 per cent of all enterprises and ~85 per cent of total employment in the country. Micro enterprises account for the largest share (58.8 per cent) of employment, followed by small enterprises (21.3 per cent). Moreover, MSMEs in the country are characterized by informality, with 85 per cent of all employment in MSMEs being informal.341
According to a survey conducted in April 2020, monthly sales revenues of MSMEs had declined by ~87.6 per cent on average.342 According to the COVID-19 Nepal Business Pulse Survey carried out between May and June 2020 by the IFC and World Bank, over 80 per cent of the 540 surveyed MSMEs had experience a slump in sales due to COVID-19, while over 50 per cent were at risk of permanently closing their businesses within a month due to the impacts of COVID-19.343 In another survey by the Nepalese Central Bank released in August 2020, over 95 per cent of small and cottage industry owners had responded saying that their business contracted by over 73 per cent due to COVID-19.344
Emerging evidence suggests that MSMEs undertook layoffs in response to the initial economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and education for children were substantial but started to recover in the second half of 2020; MSMEs also started diversifying to digital sales channels as the pandemic progressed, primarily in the food delivery space.
Economic downturn limited MSMEs’ ability to pay salaries and maintain employees, with a particularly pronounced negative impact on women, daily wage labourers, and migrants; while most data on layoffs refers to the first half of 2020, reports of reversals in job loss had not emerged as of December 2020 • According to a survey conducted from April-May 2020, MSMEs had reduced their number of paid workers by 50-60 per cent due to lockdowns and the number of monthly working days had been reduced from 29-30 to 17345; as per another survey A: Layoffs and conducted from May-June 2020, 27 per cent of MSMEs had reduced employee
wage cuts working hours346 • Wage cuts were seen among female employees: according to the survey conducted from May-June 2020, across all sectors, sizes and locations of firms, 12 per cent of female employees have been put on reduced pay347 • Daily wage labourers and migrants, who already had limited savings and safety nets, also faced pronounced impacts: as of June 2020, 25 per cent of non-agriculture daily wage laborers and 12 per cent farm related daily wage earners were reported to have lost their jobs because of the COVID-19 crisis, while 33 per cent of wage
341 UNDP, RAPID ASSESSMENT OF SOCIO-ECONOMIC IMPACT OF COVID-19 IN NEPAL, 2020 342 UNDP, RAPID ASSESSMENT OF SOCIO-ECONOMIC IMPACT OF COVID-19 IN NEPAL, 2020 343 IFC/World Bank, COVID-19 Nepal Business Pulse Survey, 2020 344 XinhuaNet, Small, medium enterprises in Nepal severely impacted by COVID-19 pandemic: survey, 2020 345 UNDP, RAPID ASSESSMENT OF SOCIO-ECONOMIC IMPACT OF COVID-19 IN NEPAL, 2020 346 IFC/World Bank, COVID-19 Nepal Business Pulse Survey, 2020 347 IFC/World Bank, COVID-19 Nepal Business Pulse Survey, 2020
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laborers experienced reduced income; moreover, ~90 per cent migrant workers were employed in the informal sector, which saw major layoffs348 • Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints In the early months of the pandemic, restrictions on MSMEs and other businesses engaged in food distribution disrupted the availability and inflated the prices of essential food for children; however, food supply chains had started to recover as of August 2020 • The early lockdown months adversely impacted food availability for children through production as well as trade/distribution delays, as the supply chains of inputs and farm products were disrupted due to movement restrictions on MSMEs and other businesses in the supply chain349 • Commercial farms, which primarily cater to urban centres, were more severely B. Disruption in disrupted than subsistence farmers, due to high dependency on imported products and agricultural inputs350 services • These disruptions might have contributed to high food inflation - according to Nepal Rastra Bank, consumer price inflation stood at 6.7 per cent in mid-April compared to 4.4 per cent a year ago, driven largely by food and beverage inflation of 9.7 per cent - further reducing the accessibility of essential food for children • Such delays to food production and movement and resulting food inflation might have reduced children’s access to nutritious food, both physically and through enhanced affordability constraints • However, the situation did begin to improve over the course of the year; a survey conducted in August 2020 revealed the resumption of supply networks had led to a slight decrease in overall food insecurity351352 MSMEs, notably in the food delivery space, have adopted digital means to diversify delivery efforts, providing an alternate route for caregivers to access food for their children • According to a survey conducted from May-June 2020, ~20 per cent of surveyed MSMEs had started to use or had been using the internet, social media, C: Diversification specialized apps, or digital platforms for business purposes353 of sales and • This trend was particularly prominent in the food delivery space, with large online delivery platforms such as Daraz having integrated several food-producing SMEs to channels operate online on their platforms and reach previously inaccessible customer bases354 • However, with only 34 per cent of the total population having access to the internet, the increased dependence on digital delivery channels might lead to further exclusion for those lacking access Observed negative impact Expected negative impact Expected positive impact Observed positive impact
Box 4: Trends in CSR funding and priorities in 2020 in Nepal
• In 2015, the central bank of Nepal mandated Banks and Financial Institutions (BFIs) to divert 1 per cent of their net profit towards CSR funds
348 Adhikari, et al., COVID-19 impacts on agriculture and food systems in Nepal: Implications for SDGs, November, 2020 349 Adhikari, et al., COVID-19 impacts on agriculture and food systems in Nepal: Implications for SDGs, November, 2020 350 Adhikari, et al., COVID-19 impacts on agriculture and food systems in Nepal: Implications for SDGs, November, 2020 351 Adhikari, et al., COVID-19 impacts on agriculture and food systems in Nepal: Implications for SDGs, November, 2020 352 Kathmandu Post article, 2021 353 IFC/World Bank, COVID-19 Nepal Business Pulse Survey, 2020 354 OnlineKhabar, More SMEs should go online to boost Nepali economy: Daraz MD, May 2020
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• In July 2020, the bank mandated BFIs to divert the remaining amount in the CSR funds towards COVID-19 • The bank also allowed BFIs to use CSR funds for prevention, containment and treatment of COVID-19 among their employees355 • As of October 2020, BFIs contributed to Rs 280 million (USD 2.4 million) towards government’s COVID-19 funds • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 140,000 came from the private sector, of which nearly all the funding was for prevention and emergency response356
Emerging evidence already shows that child undernutrition and domestic violence against children have been exacerbated due to these business responses, while survey-based evidence from the early months of the pandemic indicated a high likelihood of girls permanently dropping out of education due to these responses; experience from past crises also indicates that mental health among youth might be negatively impacted in the long run due to these business responses and rising poverty stemming from COVID-19.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Nepal, with the impact of disrupted products and services having been limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
Figure 29: MSME actions impacting child rights issues in Nepal
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels
Nutrition Undernutrition / Before COVID-19, 36 per cent children <5 Movement restrictions Caregivers with access to digital platforms years in Nepal were suffering from stunting, impacted the distribution of have an alternate source of obtaining which was marginally higher than the essential food items for food, but those without access may face regional average of 35 per cent for South children and led to food risks of further exclusion Asia; 10 per cent of children <5 years were inflation, but impacts were suffering from wasting, which was lower than limited to the early months of the regional average of 14.8 per cent for the pandemic South Asia.357 However, prolonged food security challenges arising from lower household incomes can exacerbate child undernutrition in the country. Emerging evidence suggests that COVID-19 already started to impact nutrition in Nepal in 2020: in a survey of 4,614 households in Nepal conducted in August 2020, 91 per cent of respondents reported purchasing cheaper food of lesser quality, 66 per cent reported
355 MyRepublica, Banks now required to spend 5 percent of total CSR fund on financial literacy, September 2020 356 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific) 357 UNICEF SDG dashboard
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reducing the number of meals per day, while 67 per cent reported reductions in meal size. >50 per cent reported having no money to buy food as the most common reason for these responses. 358
Child Protection Domestic violence As per anecdotal records, instances of domestic violence against children increased during the lockdown: there were 48 complaints of child sexual assaults in the first six weeks of the lockdown itself, as compared to a total of 211 cases over the course of the entire previous Nepali fiscal year. Young girls were seen to be at particularly high risk of being subjected to violence and child marriage.359 Since these impacts were largely driven by increasing household stress due to rising poverty, this will likely continue to be a concern in light of prolonged income losses due to COVID-19. Mental health issues Nepal has the second highest youth (15-29 years) suicide rate in South Asia at 25.8 per 100,000 (2012 estimate), with 10 per cent of adolescents having attempted suicide (2015 survey).360 Based on evidence from past crises, COVID-19 can likely worsen the situation: after the 2015 earthquake, Nepalese youths experienced negative mental health outcomes, including post- traumatic stress disorder, which can likely be exacerbated by the COVID-19 crisis.361 Education Basic education While schools in Nepal started to reopen in September 2020, risks of children, especially girls, permanently dropping out of education remained. Survey- based evidence from the period of school closures indicated that 53 per cent of girls were at risk of permanently dropping out of school, primarily due to the financial and care burdens imposed by COVID-19 as well as a lack of parental support: of the nearly 4,000 girls surveyed in Nepal in June 2020, 45 per cent of girls reported that their household income had fallen, a factor that has lead girls to drop out of school even before this crisis; another 16 per cent of the girls surveyed said they had stopped studying at home since school closed in March, meaning they would be hesitant to return to school; 7 per cent admitted that they would probably not return to school when it reopens.362
In response to the immediate economic impacts of COVID-19, the government of Nepal rolled out some direct relief measures for citizens, primarily through in-kind relief packages and subsidies; the most significant government responses were aimed at increasing credit availability
358 Ministry of Agriculture/WFP/Australian Aid, The Impact of COVID-19 on Households in Nepal, 2020 359 Dahal, et al., Mitigating violence against women and young girls during COVID-19 induced lockdown in Nepal: a wake-up call, September 2020 360 UNICEF, Assessing Impact and Opportunities for Child and Family-friendly COVID-19 Response in Nepal, 2020 361 Journal of Adolescent Health, Risk and Protective Factors for Adolescent and Young Adult Mental Health Within the Context of COVID-19: A Perspective From Nepal, 2020 362 Nepali Times, Half of Nepal’s girls may drop out of school, 2020
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However, limited dedicated action was taken to fundamentally safeguard informal workers and explicitly protect child rights through government measures. Before COVID-19, the contributory social insurance system in Nepal consisted mainly of pension schemes for public employees. Hence, there was a pre-existing need to expand the coverage of such schemes in the private sector, especially in the poorest quintiles and among informal workers. However, COVID-19 response measures aimed at informal workers primarily comprised of in-kind transfers and temporary employment schemes, with limited focus on fundamentally expanding the coverage of social insurance schemes to include low- income and informal workers. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
The Government of Nepal undertook measures to provide direct income relief to workers as well as wage support to firms; however, limited efforts were made to expand fundamental social insurance schemes to low-income and informal segments of workers. Direct support was provided through measures such as in-kind relief packages, public employment programs, subsidies on social insurance scheme contributions, and utility subsidies: • The Government of Nepal delivered an in-kind relief package (food items and soap) for informal workers and deprived people with no caregivers. Local governments were responsible for financing and distributing the benefit, while the national government provided additional funding when needed. As of 6 May, between 70 per cent and 95 per cent of the households identified as most affected in each province had received the package • The government also provided employment to furloughed informal sector workers by hiring them in public works carried out by the local, provincial and federal governments. Such workers were paid in cash on a daily basis or provided with food, while unemployed workers who refused to work in the designated areas were paid 25 per cent of the relief or wage for those who opted to work • The government also subsidized the Social Security Fund contribution from employers and employees, for firms which had completely closed due to the lockdown • A 25 per cent discount on electricity bills and internet and data packages was provided during the lockdown, while house owners were directed to waive one month’s rent for tenants working in informal sectors; additionally, publicly owned food companies coordinated to provide a 10 per cent discount on basic food items
Most macroeconomic responses by the government aimed to enhance credit availability and liquidity in the economy by reducing interest rates, offering rebates, and extending repayment deadlines. Existing provisions for easing liquidity in the financial sector were further reviewed to reduce the cost of borrowing, the compulsory cash reserve, and scientific liquidity ratio for banks. Deadlines for
363 ILO, Country Policy Responses, December 2020
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Specific measures were also taken to provide credit and subsidies to small enterprises in sectors like tourism, transportation, and essential foods and agriculture. Financial institutes were directed to provide emergency loans, including for working capital to enterprises in tourism and transportation sectors, with priority to small and cottage industries and enterprises providing essential services. Additionally, district administration offices were directed to provide vehicle passes to farmers, producers, collectors, and transporters to sell agriculture products in the market, while the government subsidized 25 per cent of the transportation costs for the movement of food and essential items.
With financial recovery assuming top priority for most MSMEs as they struggle to stay afloat, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Nepal; hence, there remain several opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection:
Table 10: List of potential interventions for UNICEF Nepal
Support strengthening and expansion of social assistance and insurance systems through evidence building and advocacy Advocate for expanding the coverage of state social insurance programmes for workers in the informal private sector Rationale: Existing state social insurance schemes comprise Relevance: largely of pensions for public sector employees, with a - All sectors, with special focus on sectors substantial gap in the coverage of such schemes in the with high degree of informality – private sector, especially in the poorest quintiles and among manufacturing, construction, agricultural informal workers; moreover, most COVID-19 policy responses work have not aimed to expand the coverage of social security Potential partners: schemes for informal workers (accounting for ~85 per cent of - Government of Nepal the total employed workforce). The absence of adequate social insurance for informal workers, combined with the high likelihood of such workers losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these informal workers Partner with research organizations to support the creation of comprehensive databases tracking out- of-work internal migrants, to help make social assistance and re-employment programs for migrants more targeted Rationale: Several out-of-work daily wage workers migrated Relevance: back to rural areas during lockdowns and continued to - All sectors remain out of work; unless addressed in a targeted manner, Potential partners: this loss of income could remain prolonged reduce the - Government of Nepal
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affordability of nutrition, healthcare, and education for the - Ministry of Labour, Employment, and children of such migrants Social Security - Demographic research organizations Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Advocate for policies to mitigate breaches of child rights driven by increased children’s online activity during COVID-19 Rationale: COVID-19 has triggered a spike in children’s Target sectors: online activity. While data is currently limited, aggressive - Food and beverages sector marketing of less nutritious, processed food items could - Consumer goods sector cause unhealthy food consumption behaviour and rise in Potential ecosystem partners: overweight among children. Similarly, children may be more - National and regional governments exposed to marketing content that exploits children’s - NGOs and foundations vulnerabilities and puts their safety at risk. Currently, Nepal does not have policies regulating the marketing of unhealthy foods for children Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for stronger family friendly workplace policies which enable caregivers to meet the nutritional, healthcare, and educational needs of children, such as breastfeeding support and paid maternal leave, with special focus on informal enterprises across sectors Rationale: While the law mandates 7 weeks of fully paid Relevance: maternal leave, this policy covers only 10-32 per cent of all - All sectors, with focus on sectors with employed women in the country; it is likely that women in high representation of women – domestic informal work remain uncovered by these policies due to the work, hospitality, wholesale and retail, temporary and unprotected nature of their employment; as agriculture COVID-19 threatens to exacerbate child undernutrition, Potential partners: mental health issues, and educational shortfalls, it is crucial to - Ministry of Labour, Employment, and enact family-friendly policies which can enable caregivers to Social Security dedicate adequate time and focus to child nutrition (through - Employer and worker organizations practices like exclusive breastfeeding) psychosocial - ILO development, and learning support in the critical early childhood years Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt Relevance: family-friendly policies such as healthcare benefits, childcare, - All sectors on-site child-care centre through tax breaks or subsidies. Potential partners: These measures could be implemented as part of the COVID- - Government of Nepal 19 relief stimulus packages. Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Work with other UN agencies to generate evidence on the need for dedicated and scaled-up financial support to MSMEs in sectors like manufacturing, construction, and hospitality, which employ large proportions of informal labour (especially among female employees) Rationale: Sectors like manufacturing, construction, and Relevance: Sectors with high levels of hospitality have been severely impacted by the crisis and informality, especially among female are characterized by high levels of informality; these employees – manufacturing, construction, informal workers stand at magnified risk of losing their hospitality livelihoods, which in turn might reduce access to nutrition, Potential partners: healthcare, and education for children in these vulnerable - Government of Nepal
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households; in particular, >90 per cent of female - ILO employment in these sectors is informal. While government - UNDP efforts to assist the recovery of these sectors are underway, a robust evidence base on the needs of informal workers in these sectors can aid the provision of targeted recovery packages Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene private sector schools and education providers, including MSMEs, to implement re-enrolment and back-to-school campaigns (especially for girls) aimed at communities and caregivers, as well as to collectively advocate for government support for such efforts Rationale: COVID-19 induced reductions in household Relevance: income have increased risks of permanent school dropouts - Programming area: Education among girls in Nepal, with a need for dedicated community and caregiver engagement to prevent dropouts Potential partners: - Private schools and educational institutions - Ministry of Education Convene private sector schools and education providers, including MSMEs, to deepen awareness against violent discipline in schools Relevance: Nepal suffers from high rates of violent Relevance: discipline against children in schools; with COVID-19 - Programming area: Education, Child threatening to exacerbate other forms of violence, abuse, Protection and mental health issues among children, it is critical to raise awareness against the dangers of violent discipline Potential partners: - Private schools and educational institutions - Ministry of Education Convene private sector stakeholders to drive business commitment towards promoting gender awareness through business marketing and advertising strategies Relevance: As COVID-19 threatens to exacerbate gender- Relevance: based violence, businesses can leverage their considerable - Programming area: Gender Equality, Child social media and marketing influence to promote gender- Protection equal messaging and challenge harmful gender norms impacting young girls and women Potential partners: - MSMEs and businesses across sectors Convene local businesses to co-develop ways to affordably expand the reach of digital delivery channels, especially in sectors relevant to child wellbeing, such as essential food delivery, healthcare services, and education Rationale: While there have been increasing shifts towards Relevance: ICT and e-commerce sectors, digital service delivery in light of COVID-19, there has been sectors with high impact on child rights – limited focus on expanding such delivery to underserved or agriculture and essential food services, mental vulnerable populations (low-income segments, segments healthcare, education with limited access to advanced digital technology), enhancing risks of deprivation among children belonging to Potential partners: these underserved groups - Local businesses, start-ups, and MSMEs - E-commerce platforms - Finance providers (banks, MFIs) - Digital payments platforms Convene industry stakeholders to encourage business investment in family-friendly policies and sharing of best practices
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Rationale: Given the heightened need for family-friendly Relevance: All sectors policies in light of COVID-19, UNICEF could convene private-sector stakeholders to establish urgency and develop mechanisms to encourage MSMEs to implement Potential partners: such policies, and drive cross-sector learnings. - Employer organizations - The ILO Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Inclusive business models Identify and facilitate coordination among relevant private sector players (mental health providers, telehealth platforms, etc.) to help them expand the reach of digital mental healthcare services for children and youth Rationale: Mental health issues prevailed among youth in Relevance: Healthcare sector Nepal even before COVID-19, with risks of exacerbation due to the pandemic; with increasing momentum in the digital Potential partners: economy, digital service delivery presents a high-potential - Private mental health service providers channel for ensuring that children and youth receive - Telehealth platforms like Hamro Doctor adequate mental health support during and beyond COVID- - Mental health NGOs such as KOSHISH 19
Identify and facilitate coordination among relevant private sector players (skilling institutes, edtech platforms, etc.) to drive the use of digital channels for skilling youth Rationale: Vocational skill development among youth has Relevance: Education been largely overlooked during COVID-19; the emergence of digital technology presents an opportunity to scale up Potential partners: essential skill development for youth transitioning to the - Skilling institutes labour force - Edtech platforms like Edushala
Advocate with businesses to subsidize data and device costs for vulnerable families in order to promote digital channels for accessing nutritious food, healthcare and blended learning Rationale: Current trends of MSMEs using digital channels Relevance: to supply food and other essentials can be built upon to - ICT sector expand access to these services to children in currently Potential partners: underserved populations, while technology tools can be - Internet service providers leveraged to supplement school education to make up for - Device manufactures learning losses which occurred during school closures
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8.4 Pakistan
The growth in the number of COVID-19 cases in Pakistan slowed significantly in July 2020, following stringent government measures, but a slight increase in case growth was noted in November. COVID-19 hit Pakistan in mid-March, triggering stringent measures from the government. The government mandated selective quarantines, border closures, travel restrictions, closure of educational institutions, bans on public events, and social distancing measures on March 23rd, and imposed a strict nation-wide lockdown from April 1st to May 9th. Growth in the number of cases began to slow down in July and restrictions were gradually eased. Lockdowns were completely removed across all economic sectors and provinces on August 10, while restaurants, malls, and retail outlets were reopened starting September 15th (Figure 30)364.
Figure 30: COVID-19 cases & Stringency of measures in Pakistan365
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20 Confirmed Cases (1000s) Cases Confirmed 0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases (1000s) Stringency Index
As a result, significant supply and demand shocks were experienced in the already struggling economy, and GDP was projected to contract by 0.4 per cent in 2020. Tightened monetary and fiscal policies to stabilize accumulated macroeconomic deficits, coupled with slowdown of agricultural production due to insufficient rainfall had already slowed down GDP growth to 1.9 per cent in 2019. While the economic projections are still evolving, as of November 2020, the IMF estimated that the GDP growth would drop to -0.4 per cent in 2020, with expected recovery over the following two years (Figure 31).
364 Oxford COVID-19 Government Response Tracker 365 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region
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Figure 31: GDP, constant prices, per cent change in Pakistan366
6% 5% 4% 5.0% 5.0% 4.5% 3% 4.0% 2% 1% 1.9% -0.4% 0% 1.0% -1% 2019 2020 2021 2022 2023 2024 2025
IMF - Oct 2020 IMF - Oct 2019
COVID-19 related restrictions also resulted in the moderate disruption of health and nutrition services for mothers and children, while child protection services remained minimally disrupted. In a survey conducted across UNICEF Country Offices in September 2020, 25-49 per cent decline in coverage was reported for some health and nutrition services, due to COVID-19 (Figure 32).367
Figure 32: COVID-19 related change in coverage of services in Pakistan368
Health services Nutrition services Child protection services Health campaigns for vaccination, Early detection of wasting (Screening) Civil registration services LLIN or mass drug distribution, etc. Health care for displaced and Home visits by social service/ justice Treatment of child wasting refugee populations workers Protection & promotion of Access to available women and girls' Maternal Health services breastfeeding programmes friendly spaces including support Promotion of nutritious and safe diets services for GBV survivors, girls at risk Newborn care services for young children (6-23 months) of marriage and married girls, and Outpatient care for childhood Nutrition support for pregnant and girls affected by female genital infectious diseases lactating women mutilation
Routine Vaccinations
Not applicable No change <10 per cent 10-24 per cent 25-49 per cent 50-74 per cent >75 per cent drop drop drop drop drop
While some sectors (textiles, readymade garments, aviation) in the country witnessed significant negative economic impact, some sectors witnessed minimal impact (tourism, agriculture) and others (pharmaceuticals, e-commerce) even emerged as opportunity areas due to COVID-19 induced demand. Textiles, readymade garments, and aviation have been severely impacted with limited chances of near-term recovery. On the other hand, while the initial impact on tourism was severe, the reopening of the sector in August 2020 provided momentum for a quick recovery, especially since 93 per cent of tourism revenues are from domestic tourism. Dedicated government support minimized
366 IMF, World Economic Outlook, October 2020 367 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 368 UNICEF, Tracking the situation of COVID-19
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 117 the economic impact on the construction and agriculture sectors. Moreover, signs of growth have been noted in the pharmaceuticals and e-commerce industries. Figure 33 presents a high-level assessment of some of the key sectors in the country.
Figure 33: Sectoral impact of COVID-19 in Pakistan
Key: Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment RMG and • The sector was impacted sharply by COVID-19, but some improvements were noted textiles over the course of 2020: the All Pakistan Textiles Mills Association (APTMA) reported a 73.4 per cent decline in garment exports in February 2020, compared to the same period in 2019, a 46.3 per cent relative decline in May 2020, and a 13 per cent relative decline in June 2020 • The overall export losses to the sector over the course of 2020 are estimated to amount to USD 1.5 billion, or 25 per cent of 2019 export value369 • As of September 2020, the APTMA reported that production capacity was back to pre-COVID-19 levels, but this did not consider production units which had shut down during COVID-19; moreover, a second wave of infection in the sector’s key export markets – Europe and the US – are expected to depress recovery in the sector370 • Moreover, MSMEs dominate the sector: 84 per cent of the sector’s workforce is employed in firms with <6 workers, and are likely to be severely impacted by losses to the sector371 • Expert interviews suggest distress to the textiles sector could have negative spill-over effects on other actors in the value chain, such as cotton farmers and processors Aviation • The sector has been severely impacted by COVID-19: the International Air Transport Association has projected a 52 per cent or 9.866 million reduction in origin and destination traffic for Pakistan over 2020, translating to a USD 1.8 billion decline in revenue and 259,400 lost jobs • While both domestic and international flights have resumed, the decline in demand for international air travel, which accounts for 70 per cent of Pakistan’s air passenger traffic, will likely depress the sector’s recovery rates372 Tourism • The tourism sector was severely impacted by COVID-19, with an estimated loss of USD 3.64 billion due to lockdowns in the early months of the pandemic373 • Decline in tourism is also likely to have impacted several dependent sectors, such as local handicraft producers, street vendors, roadside food stalls, etc. • However, tourist activities were allowed to be resumed in August 2020374 • Early containment of the disease and relaxation of movement restrictions within the country likely provided a boost to the sector, given that 93 per cent of the sector’s revenue is reliant on domestic spending375
369 Just-style, Pakistan apparel sector seeks government support, September 2020 370 The Express Tribune, Pakistan's textile sector back at full capacity, December 2020 371 ILO, Employment and wages rising in Pakistan’s garment sector, 2017 372 CAREC, The Impact of COVID-19 on CAREC Aviation and Tourism, June 2020 373 World Bank, COVID-19 and Tourism in South Asia, June 2020 374 World New, COVID-19: Gilgit-Baltistan reopens for tourism as Pakistan flattens curve, August 2020 375 CAREC, The Impact of COVID-19 on CAREC Aviation and Tourism, June 2020
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Construction • In the initial months of the pandemic, there were some reports of distress in industries related to construction: domestic sales volume in the cement industry reduced from 3.85 million tons to 3.2 million tons in March 2020376 • However, the government re-opened construction activities in April 2020, along with a USD 0.62 billion relief package for the sector; in addition, tax incentives, waivers and subsidies for builders, developers and property owner were implemented to incentivize growth in the sector377 • These relief measures likely enabled small and medium sized contractors in the construction sector to sustain operations even during the height of the pandemic • There have been limited reports of significant negative impacts on the construction sector thereafter, with likely positive impacts on allied sectors like cement and steel Agriculture • According to reports by the ADB, impact on the agricultural sector was limited: crop damage from a severe locust infestation in 2019-20 had already prompted several budgetary measures, including an agriculture emergency programme worth USD 80 million to support investment and expansion in agriculture and livestock rearing378 • These measures enabled the sector to perform strongly despite the pandemic: according to the Economic Survey of Pakistan 2019-20, despite the overall negative growth, the agriculture sector grew by 2.67 per cent in the first half of the year, with limited reports of disruption thereafter Pharmaceutic • Overall sales in the pharmaceuticals sector for the financial year ending in June 2020 als and recorded 9 per cent growth over the previous year, with the highest sales recorded in healthcare March 2020379 • Moreover, regulations to stabilize changes in drug pricing are expected to provide further momentum to the industry, with projected growth rates of >10 per cent for 2020-2021380 • In addition, while sectoral trends have not been established, there are promising signs of increased demand for alternate channels of delivery in the healthcare sector, with increases in telehealth consultations both on large platforms like Marham and MSMEs like Sehat Kahani through 2020381 ICT and e- • There have been reports indicating that the sector has seen positive growth due to commerce COVID-19 • According to an e-commerce index compiled by DarazH, one of Pakistan’s largest online stores, there has been a significant increase in digital payments and a rise in customers shopping online since the Covid-19 outbreak; DFresh, the fruits and vegetables channel on Daraz, saw an order uplift of 9 times, while orders for hand sanitisers and liquid hand washes also increased by 18 times382 • Similarly, Farm to House, an agri e-commerce startup in Pakistan, saw an eight-fold increase in home delivery orders compared to pre-COVID-19 levels, as of August 2020383 • This uptake in e-commerce is likely to enable MSMEs and smallholder farmers to access previously inaccessible consumer bases
376 ICMA, Economic Impact of COVID-19 on Pakistan, April 2020 377 ILO, Country Policy Reponses, December 2020 378 The Nation, Pakistan shows a broad economic recovery in fiscal year 2021: ADB, September 2020 379 The News Pakistan, Pharma sales up 9pc to Rs453.5bln in FY20, August 2020 380 FitchSolutions, Uncertainties Surrounding Pharmaceutical Pricing In Pakistan To Diminish, October 2020 381 IPS, HOW TELEMEDICINE HAS HELPED PAKISTAN COMBAT COVID-19 PANDEMIC, July 2020 382 Dawn News, Rise of Digital Payments, October 2020 383 GSMA, The rise of agri e-commerce during COVID-19: Opportunities for smallholder impact, August 2020
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MSMEs, which contribute heavily to employment in Pakistan, have been hit hard by the pandemic, with ~70 per cent expecting a more than 60 per cent decline in sales in 2020. MSMEs contribute 30 per cent of the GDP, 70 per cent of the total employment and 25 per cent of the exports; they constitute over 90 per cent of the estimated 3.2 million business enterprises in the country. 72 per cent of total employment in the country is informal, with a large proportion of informal employment estimated to be in MSMEs.
In a survey of 184 MSME owners conducted in April 2020 in Pakistan, 48 per cent of respondents reported facing supply chain disruptions due to COVID-19, 44 per cent reported reductions in demand, 33 per cent reported transportation challenges, and 23 per cent reported reduction in production; owing to these challenges, 31 per cent of all respondents reported having had to completely close their business, while another 19 per cent of respondents reported partial closures. In the same survey, 70 per cent of all MSMEs expected >60 per cent decline in sales in 2020, and 68 per cent expected >60 per cent decline in profits in 2020. (Figure 34)
Figure 34: Expected reduction in sales and profit, based on survey of 184 enterprises in April 2020
Early evidence suggests that MSMEs undertook layoffs in response to economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and healthcare for children were limited to the early months of the pandemic, while reports of MSMEs diversifying to digital sales channels began to emerge as the pandemic progressed.
Economic downturn limited business’ ability to pay salaries and maintain employees, potentially having affected women and informal workers in RMG and tourism to a relatively larger degree A: Layoffs and • In a survey of 184 MSMEs in Pakistan conducted in April 2020, 43 per cent of wage cuts respondents reported laying off employees to tackle cash flow shortages, while another 12 per cent reported reducing staff salaries for the same reason • In RMG, over 1 million job losses were projected over 2020, while evidence from the early months demonstrated instances of job losses: 62 per cent of MSMEs surveyed in
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April 2020 reported laying off daily-wage workers, 52.4 per cent reported laying off part-time workers, while 24 per cent reported laying off permanent workers • In tourism, 880,000 jobs were projected to be at risk over the course of 20203; 71 per cent of MSMEs surveyed in April 2020 reported laying off daily-wage workers, 56 per cent reported laying off part-time workers, while 30 per cent reported laying off permanent workers • Women in RMG were particularly vulnerable to layoffs and wage cuts, given pre- existing gender disparities in wages in the sector; informal workers in tourism SMEs were at high risk given their large representation in the sector Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints In the early months of the pandemic, disruptions to MSMEs and other actors engaged distribution channels adversely impacted food supply and contributed to food inflation, while disrupted transportation reduced access to healthcare; limited reports of such disruptions have emerged in the last quarter of 2020, with experts hypothesizing that product and service delivery are well on the way to recovery • Movement restrictions on goods and people, particularly small traders and entrepreneurs, delayed availability of essential food items in the early months (~May 2020) • These disruptions to MSMEs engaged in food distribution likely contributed to early B. Disruption in inflation in essential food items; from Dec’ 19 to March ‘ 20, although the domestic products and food price index fell by 0.2 per cent, the price of staples like pulses increased by 10-20 services per cent, of rice by 18 per cent, and of wheat by 25 per cent; while movement and supply restrictions were gradually relaxed, news reports highlighted continued food inflation as late as October 2020, as retail and wholesale markets remained unregulated Such movement delays to food items and resulting food inflation might have reduced children’s access to nutritious food, both physically and through enhanced affordability constraints. Disruptions to transportation MSMEs also reduced the ability of pregnant mothers to access timely antenatal and emergency care, as well as safe childbirth in institutions, as of August 2020384 Some SMEs, especially in the areas of food and healthcare delivery, have leveraged the rise in digital channels to diversify delivery efforts, although trends in uptake are still evolving • Data demonstrating national trends in diversification of delivery efforts by SMEs is unavailable; however, emerging anecdotal evidence shows that SMEs started turning to digital channels of service delivery in 2020, notably in essential food and primary C: Diversification healthcare delivery of sales and • For example, in food distribution, several online essential food delivery SMEs delivery channels emerged, smoothening disruptions in food supply, while in primary healthcare, MSMEs like Sehat Kahani, which digitally connects home-based doctors – including maternal care experts and midwives – to patients, started playing an increasingly important role during COVID-19 Such diversification provides an alternate route for caregivers to access food and healthcare for their children; however, 83 per cent of the country’s population lack internet access and are at risk of exclusion from digital service delivery
384 UNICEF CO Interview
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Box 5: Trends in CSR funding and priorities in 2020 in Pakistan
• In March 2020, The Securities and Exchange Commission of Pakistan (SECP) directed all companies to divert their CSR activities and funds towards COVID-19 prevention, detection and cure385 • SECP also advised companies to divert CSR funds to ensure contingency financial planning for themselves, suppliers and customers and mitigate health risks to employees, customers and communities386 • Several companies made donations for COVID-19 response, including Engro Corporation donating Rs 1 billion (USD 6.2 million), Unilever Pakistan donating Rs 200 million (USD 1.2 million), Textile exporter Interloop Ltd donating Rs 20 million (USD 0.12 million) • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 3.1 million came from the private sector, mainly focusing on emergency response, support for vulnerable populations and economic recovery387
Emerging evidence already shows that child undernutrition might be exacerbated due to these responses, while projections suggest that basic and vocational education might suffer due to COVID-19 induced disruptions and poverty; less evidence is available on reductions in access to primary healthcare for children, or exacerbations in stress levels among children due to business responses to COVID-19, but prevailing conditions (such as high dependence on private sector healthcare or low availability of mental health physicians) suggest that these issues might become more pronounced due to COVID-19.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Pakistan, with the impact of disrupted products and services having been largely limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
Figure 35: MSME actions impacting child rights issues in Pakistan
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels
Nutrition Undernutrition / Before COVID-19, 38 per cent children <5 Initial supply chain disruptions and Caregivers with access to digital years in Pakistan were suffering from food unavailability might have platforms have an alternate source of stunting, which was higher than the impacted nutritional intake in the obtaining food, but those without regional average of 35 per cent for South early months. The economic impact access may face risks of further Asia; 7 per cent of children <5 years were on undernutrition could be further exclusion suffering from wasting, which was lower exacerbated by disruptions to than the regional average of 14.8 per cent community-based nutrition for South Asia. Prolonged food security programs: programs to promote
385 The News, SECP asks firms to divert CSR budget for COVID-19, March 2020 386 The News, SECP asks firms to divert CSR budget for COVID-19, March 2020 387 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
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challenges arising from lower household nutritious diets among children (6-23 incomes and inflation in staple foods can months) have reported 25-49 per further exacerbate the situation. cent coverage reductions, as of Emerging evidence suggests that COVID- September 2020. 19 already impacted nutrition in Pakistan in 2020: an additional 2.45 million people, beyond the pre-existing 40 million, were pushed into food insecurity due to COVID-19 in 2020. Child Protection Mental health issues Mental health in Pakistan remains in line While data on mental health services with global averages, with 3.8 per cent is limited, estimates suggest that and 3.4 per cent of the population living Pakistan only has between 342 to 500 with anxiety and depressive disorders psychiatrists to serve a population of respectively. Loss of jobs and income over 212 million, which translates to threatens to increase household stress, extremely low mental health coverage which, combined with low availability of for the entire population. mental health services, might exacerbate mental health issues among children. An increase in child labour, if actualized, might be a significant risk factor to mental health during COVID-19, in a country that has a high prevalence of working children with ~11 per cent of 5 to 17 year-olds engaged in economic activity. Education Basic education School enrollment rates in Pakistan were lower than South Asia averages both at With widespread school closures the primary (67.6 per cent in Pakistan, compared to 87.8 per cent in South Asia) shifting education to remote learning, and secondary (37.4 per cent in Pakistan, compared to 60.5 per cent in South Asia) children in Pakistan are at particular risk levels, even prior to COVID-19. A simulation conducted by the World Bank in as the country ranks in the bottom September 2020 surfaced potential negative impacts on learning due to COVID- quartile of internet availability in the 19: a) income losses can likely drive 930,000 children to drop out of school over world. The study also uncovered poor 2020, an increase of ~4.2 per cent, b) school closures will likely result in learning uptake of remote learning, with children losses of 0.3 to 0.8 years of learning adjusted schooling. in only 10 per cent of surveyed families in Punjab making use of remote learning. Vocational Education Continuity of vocational education and Training has received limited attention in the wake of COVID-19, with reports of contract-based vocational education providers losing their jobs. Primary Healthcare Vaccination Before COVID-19, 25 per cent and 24 per cent of target age children were not covered by DPT3 (<7 years age) and MCV1 (<5 years age) vaccines respectively, which were higher than the regional averages of 10 per cent for both vaccines. Income loss might reduce access to vaccination by increasing indirect and opportunity cost burdens of getting vaccines, as vaccination rates have historically seen to be directly related to household income level.
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Maternal and newborn Before COVID-19, 36 per cent of Travel restrictions were observed to healthcare newborns did not receive prenatal care prevent pregnant women from and 31 per cent of pregnant women did accessing prenatal care and not receive skilled birth assistance. institutional deliveries388 Sustained income loss might reduce access to MNH, since 74 per cent of antenatal care and 52 per cent of prenatal care is provided by the costly private sector
In response to the immediate economic impacts of COVID-19, the government of Pakistan rolled out several economic relief measures; direct cash and in-kind transfers constituted the majority of these measures, with some efforts to provide fiscal stimuli to the economy (e.g., through interest rate reductions), provide credit to MSMEs, and aid the targeted recovery of major sectors like manufacturing, construction, and agriculture. The Government of Pakistan announced a PKR 1.2 trillion (approx. $8 billion USD) multi-sectoral fiscal relief package to address the challenges posed by COVID-19.
The government implemented several social assistance programmes to provide immediate economic relief to workers impacted by COVID-19, especially targeting daily wage workers. While most measures were directed at enterprises and workers across sectors, there was limited dedicated focus on protecting vulnerable and informal workers. The government disbursed a few large-scale direct cash transfer and relief programs to directly provide financial assistance to workers impacted by layoffs or job losses, as well as aid low-income segments: • Government’s fiscal package included allocations for daily wage workers, low income families, health and food supplies, electricity bill payment relief, among others • The government also launched the “Ehsaas Emergency Cash Program” with a total allocation of PKR 144 billion (approx. USD 0.9 billion) to provide immediate cash relief of PKR 12,000 to 12 million families of daily wage earners • PKR 200 billion (approx. USD 1.25 billion) of cash assistance was allocated for daily wagers working in the formal industrial sector who had been laid off as a result of COVID-19 outbreak • PKR 50 billion (approx. USD 0.3 billion) was allotted to the Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates • As of 30th September 2020, a total of 62,056 households had received economic revival assistance in the form of livestock fodder, food packages, agricultural inputs, emergency interest free loans
In addition, macroeconomic fiscal measures were implemented by the country’s Central Bank to help stimulate economic activity and relieve pressures on borrowers. To stimulate borrowing and economic activity, the Central Bank relaxed the Debt Burden Ratio for consumer loans from 50 per cent to 60 per cent in March 2020, while the Monitory Policy Committee (MPC) reduced the policy rate from 13.25 per cent to 7 per cent in September 2020. Moreover, in March 2020, the government directed banks and DFIs to defer the payment of principal on loans and advances for one year, to relieve monetary burdens. In April 2020, the Securities and Exchange Commission of Pakistan (SECP) also
388 UNICEF CO Interview
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A few measures were also taken to provide relief to MSMEs in particular by increasing credit and fund availability for MSMEs. In March 2020, the regulatory limit on extension of credit to SMEs was permanently increased from PKR. 125 million to PKR. 180 million. In addition, the overall fiscal stimulus package included a PKR 100 billion (approx. USD 0.6 billion) allotment for financial support to SMEs (alongside the agriculture sector).
Specific sectors like construction, manufacturing, and agriculture received dedicated support through government package. • Construction: i. In April 2020, the government announced a PKR 100 billion (approx. USD 0.6 billion) special incentive package for construction industry, along with tax incentives, waivers and subsidies for builders, developers and property owners • Manufacturing and exports: i. State Bank of Pakistan (SBP) announced Temporary Economic Refinance Facility (TERF) to stimulate new investment in manufacturing. The total size of the scheme is PKR 100 billion (approx. USD 0.6 billion), with a maximum loan size per project of PKR 5 billion and maximum end-user rate of 7 per cent for 10 years. It can be accessed by all manufacturing industries, with the exception of the power sector ii. The overall fiscal stimulus package included a PKR 100 billion (approx. USD 0.6 billion) allotment for accelerated tax refunds to export industry • Agriculture: i. The overall fiscal stimulus package included a PKR 100 billion (approx. USD 0.6 billion) allotment for financial support to the agriculture sector (along with SMEs), along with a PKR 280 billion (approx. USD 1.75 billion) allotment for accelerated procurement of wheat
However, limited dedicated action was taken to safeguard informal workers and explicitly protect child rights through government measures. Gaps remain in government efforts to expand and strengthen fundamental social insurance mechanisms for informal workers, who are often not covered by such programmes. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave and breastfeeding breaks) which can support caregivers with their childcare duties during COVID- 19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
With financial survival assuming top priority for most MSMEs as they struggle to stay afloat, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Pakistan; hence, there remain several opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection.
Table 11: List of potential interventions for UNICEF Pakistan
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Support strengthening and expansion of social protection systems through evidence building and advocacy Advocate for providing and/or strengthening financial assistance and insurance programmes for workers in the informal sector, especially for overlooked populations such as domestic workers Rationale: Most COVID-19 policy responses do not Relevance: specifically target informal workers and vulnerable groups, - All sectors such as the estimated 8.2 million domestic workers in the Potential partners: country, who are often women with dependent children; the - Government of Pakistan lack of targeted income support, combined with the high likelihood of such workers losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these female domestic workers if unaddressed. Advocate for appropriate and adequate regulations on the prices of essential food commodities like pulses, vegetables, etc. Rationale: Food inflation remained severe even towards the Relevance: end of 2020, despite relaxation of most movement - Agriculture sector restrictions and supply disruptions and appreciation of the - Wholesale and retail trade sector currency, largely owing to lack of regulations on wholesale Potential partners: and retail markets; such price inflation can contribute to the - Government of Pakistan deprivation of children from adequate nutritious foods due to affordability constraints. Advocate for dedicated financial support and technical assistance to TVET institutions and providers, to enable them to retain their instructors and provide continued learning through digital and other remote means Rationale: Disruptions to vocational education have been Relevance: largely overlooked during the pandemic, with reports of - Education sector contracted vocational instructors losing jobs; if unaddressed, this can significantly reduce the ability of Potential partners: youth to attain crucial workforce skills. - Government of Pakistan - Technical Education & Vocational Training Authority of Pakistan Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF could - Business as provider of goods and services; work with MSMEs and other actors to develop guidance and Business as employer; Business impact on tools (e.g., due diligence communities and the environment: MSMEs guidance on policy commitments and codes of practice for must take deliberate actions to not harm child rights, child safeguarding toolkit for MSMEs, child rights the rights of children of their workers, in impact assessments, reporting for MSMEs) for different the marketplace and in the broader sectors to understand the impact of their business decisions communities and operations on children and recover in a way that does Potential ecosystem partners: not harm child rights. - NGOs and foundations - Industry associations
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Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for strong regulations mandating family friendly workplace policies, including breastfeeding support and paid maternal leave, with special focus on informal enterprises Rationale: Laws mandating paid breastfeeding breaks for Relevance: employees do not exist, moreover, while the law mandates - All sectors 12 weeks of fully paid maternal leave, this policy covers only Potential partners: 10-32 per cent of all employed women in the country; it is - Ministry of Labour likely that women in informal work remain uncovered by these policies due to the temporary and unprotected nature of their employment; as risks of child undernutrition rise due to COVID-19, it is crucial to encourage and support breastfeeding through such policies, as a key lever to promote adequate early childhood nutrition. Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt Relevance: family-friendly policies such as healthcare benefits, - All sectors childcare, on-site child-care centre through tax breaks or Potential partners: subsidies. These measures could be implemented as part of - Government of Pakistan the COVID-19 relief stimulus packages. Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Work with other UN agencies to generate evidence on the need for dedicated livelihood support for vulnerable workers in sectors employing large proportions of informal workers and women Rationale: While government relief packages have been Relevance: Sectors with high informality or provided to most major sectors, policies specifically aimed high representation of women - agriculture, at protecting informal workers or women in these sectors construction, textiles are limited; these vulnerable groups might need dedicated Potential partners: livelihood support as they are at high risk of being impacted - Government of Pakistan by COVID-19 induced livelihood losses, which in turn might - UNDP reduce access to nutrition, healthcare, and education for - The ILO children in these vulnerable households. Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene industry stakeholders to encourage business investment in family-friendly policies and sharing of best practices Rationale: Provision of family-friendly policies remains low Relevance: All sectors among MSMEs. Given the heightened need for such policies in the light of COVID-19, UNICEF could convene private- sector stakeholders to establish urgency and develop Potential partners: mechanisms to encourage MSMEs to implement such - Employer organizations policies, and drive cross-sector learnings. - The ILO Convene tech industry stakeholders to encourage use of digital for safeguarding and promoting children well-being Rationale: COVID-19 has accelerated use of digital delivery Relevance: for nutritious food, healthcare, education in Pakistan. - ICT or e-commerce sectors However, children’s considerations, particularly of those Potential partners: from vulnerable groups, are often not taken into account in - UNDP designing digital products.
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- Technology players such as Facebook, Google, Amazon Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Advocate with businesses to subsidize data and device costs for vulnerable families in order to promote digital channels for accessing nutritious food, healthcare and blended learning Rationale: Current trends of MSMEs using digital channels Relevance: to supply food or provide healthcare are encouraging. - ICT sector Digital can be used as an opportunity to expand access of Potential partners: these services in currently underserved populations. Tech - Internet service providers tools can be leveraged to supplement school education to - Device manufactures improve learning outcomes even as schools re-open. Provide technical assistance (through identified third-party experts) to traditional and vocational education providers to help them develop learning frameworks and pedagogical methods for effective distance learning, both independently and in collaboration with ongoing government efforts to provide educational content at scale through television, radios, etc. Rationale: Education for children has suffered to a large Relevance: degree owing to COVID-19 induced school closures and - Education sector limited digital accessibility and skills, resulting in increased Potential partners: permanent school drop-outs; this presents a need to not - Ministry of Federal Education and only develop appropriate distance learning content and Professional Training teaching methods, but also explore more accessible - Private schools and tutors channels of delivery such as print media, radio, or television. - Content developers - Edtech companies - Radio and television companies Encourage development of light mobile applications that can be operated on low speed internet to access essential services for children Rationale: 54 per cent of population in Pakistan still Relevance: accesses 2G internet389, thus poor connectivity could be a - ICT sector key challenge in accessing digital services such as remote Potential partners: learning, healthcare, mental health support. Applications - Mobile app developers with limited animations and compressed images can be - Online content developers specially designed for such users.
389 GSMA, Mobile economy in Asia Pacific, 2020
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8.5 Sri Lanka
COVID-19 hit Sri Lanka in mid-March, triggering stringent measures from the government; restrictions were subsequently eased although cases continued to rise, with a rapid increase in case growth since mid-October 2020. Following the detection of the first COVID-19 case in the country in mid-March, school closures were declared. A public holiday was declared from 15 March, with a national lockdown implemented from 20 March to 11 May. Subsequently, curfews were released from time to time in regions experiencing relatively slower spread of the virus, accompanied by preventive measures like social distancing. However, cases continued to rise, with a sharp spike in October 2020 (Figure 36)390.
Figure 36: COVID-19 cases & Stringency of measures in Sri Lanka391
30000 120
25000 100
20000 80
15000 60
10000 40
Stringency IndexStringency Confirmed Cases Confirmed 5000 20
0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases Stringency Index
The economic impact of COVID-19 is expected to be severe in 2020, with an estimated GDP contraction of 4.5 per cent; however, a steady recovery is expected in 2021. While the economic projections are still evolving, as of November 2020 the IMF estimated that the GDP growth would slow down to from a formerly projected 3.5 per cent to -4.6 per cent in 2020, with an expected recovery to 5.3 per cent GDP growth in 2021 (Figure 37).
However, the Sri Lankan economy started to show signs of recovery in 2020 itself, with a recorded positive GDP growth rate of 1.5 per cent in the third quarter of 2020.392
390 Oxford COVID-19 Government Response Tracker 391 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 392 Trading Economics, 2020
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Figure 37: GDP, constant prices, per cent change in Sri Lanka393
6%
4% 5.3% 5.0% 2.3% 4.6% 4.6% 4.8% 2%
0% 2019 2020 2021 2022 2023 2024 2025 -2%
-4% -4.5% -6% IMF - Oct 2020 IMF - Oct 2019
COVID-19 related restrictions did not lead to significant disruptions in essential community- based health, nutrition, or protection services for mothers and children. In a survey conducted across UNICEF Country Offices in September 2020, no more than 10-24 per cent decline in coverage was reported for any health, nutrition, and child protection services due to COVID-19, with several services not have seen any declines in coverage at the time of the survey (Figure 38).394
Figure 38: COVID-19 related change in coverage of services in Sri Lanka395
Health services Nutrition services Child protection services Health campaigns for vaccination, Early detection of wasting (Screening) Civil registration services LLIN or mass drug distribution, etc. Health care for displaced and Home visits by social service/ justice Treatment of child wasting refugee populations workers Protection & promotion of Access to available women and girls' Maternal Health services breastfeeding programmes friendly spaces including support Promotion of nutritious and safe diets services for GBV survivors, girls at risk Newborn care services for young children (6-23 months) of marriage and married girls, and Outpatient care for childhood Nutrition support for pregnant and girls affected by female genital infectious diseases lactating women mutilation
Routine Vaccinations
Not applicable No change <10 per cent 10-24 per cent Do not know drop drop
While some sectors (RMG and textiles, travel and tourism, construction) in the country witnessed significant negative economic impact, some sectors witnessed relatively smaller impact (agriculture) and others (pharmaceuticals, ICT and e-commerce) even emerged as opportunity areas due to COVID-19 induced demand. Textiles, readymade garments, travel, and tourism have been severely impacted, with limited chances of near-term recovery. On the other hand, dedicated government support minimized the economic impact on the agriculture sectors, which recorded a
393 IMF, World Economic Outlook, October 2020 394 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 395 UNICEF, Tracking the situation of COVID-19
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 130 positive growth of 4.3 per cent in the third quarter of 2020. Moreover, signs of positive growth have been noted in the pharmaceuticals, ICT and e-commerce industries. Figure 39 presents a high-level assessment of some of the key sectors in the country.
Figure 39: Sectoral impact of COVID-19 in Sri Lanka
Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment RMG and • Sri Lanka’s apparel industry is expected to have lost USD 1.5 billion worth of orders textiles from March to June 2020396, owing to declines in demand from the USA, which accounts for >75 per cent of its exports397 • By June 2020, year-to-date garment exports from the country fell by ~40 per cent compared to the same period in 2019398 • By October 2020, cumulative export earnings from apparel and textiles declined by 21 per cent year-on-year • Although imports of masks from Sri Lanka in the EU, Japan and the US rose by 700 per cent in first half of 2020, this did not offset the drop in garment orders399 • Expert interviews suggest that these losses can be expected to have significant negative impacts on actors along the supply chain, such as cotton farmers, raw material producing MSMEs, etc. Travel and • As of May 2020, COVID-19 was projected to cause losses worth USD 1.99 billion tourism (nearly 50 per cent of 2019 revenue) in Sri Lanka’s tourism sector in 2020, due to large-scale halt of activities400 • In April 2020, the International Air Travel Association estimated that Sri Lanka’s aviation sector would lose USD 715 million (~70 per cent of 2019 revenue) in revenue and >400,000 jobs in 2020401 • Given the high dependence of Sri Lanka’s travel and tourism sector on international tourist arrival, the sector’s losses are expected to have been sustained throughout 2020, as the country opened itself up to international passenger arrivals only late in December 2020402: according to Trading Economics, the country’s tourism revenue remained at zero from April to October 2020403 • Related sectors like small handicraft producers, street vendors, roadside food stalls, etc. can be expected to have suffered due to this significant downturn of travel and tourism activities Construction • A report by KPMG in April 2020 indicated that the sector can be expected to sustain severe losses through 2020; according to the report, the government had already halted major construction projects until a formal budget was to be announced during H2 2020, while a further slowdown was expected in construction projects led by Chinese contractors, as labourers had not been able to return to Sri Lanka after the Chinese new year due to travel restrictions, which were eventually only relaxed in December 2020404
396 UNESCAP, COVID-19 and South Asia, June 2020 397 UN SDG, The Impact of COVID19 on the MSME Sector in Sri Lanka 398 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 399 Sri Lanka Apparel, Apparel industry hails budget; confident of recovery from 2021, November 2020 400 World Bank, COVID-19 and Tourism in South Asia, June 2020 401 Newsfirst, Sri Lanka’s aviation industry to lose USD 715 mn due to COVID-19, April 2020 402 The Indian Express, Sri Lanka to resume international flights from December 26 after eight months, December 2020 403 Trading Economics, 2020 404 KPMG, Impact of COVID-19 on the Sri Lankan Economy, April 2020
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• In the third quarter of 2020, the sector contracted by 9.3 per cent405 • This slowdown in construction activity is likely to have impacted several small and medium sized contractors in the construction sector Agriculture • The sector is estimated to have sustained relatively smaller impacts due to COVID-19, owing to its limited integration with global supply chains and early government efforts to protect the sector • In the third quarter of 2020, the sector recorded a positive growth rate of 4.3 per cent406, with likely positive impacts on smallholder farmers and other MSMEs involved in the value chain, such as distributors, input suppliers, etc. Pharmaceutic • Negative impacts of COVID-19 on the sector have not been noted; on the other hand, als the government’s establishment of a State Ministry and manufacturing zones dedicated to pharmaceutical manufacturing are expected to drive the sector’s growth going forward • As of September 2020, sales in the sector were projected to increase by ~5.8 per cent in 2020, and achieve a 5-year Compound Annual Growth Rate of 6.6 per cent by 2020 in local currency terms407 • This can be expected to have positive impacts on MSMEs in the pharmaceuticals supply chains, such as raw material suppliers, equipment manufacturers and suppliers, etc. ICT and e- • The ICT sector recorded a positive growth rate of 15.3 per cent in the third quarter of commerce 2020408 • Moreover, as of May 2020, Sri Lanka’s previously nascent e-commerce ecosystem (<1 per cent penetration of online retailing) was expected to have received a boost due to movement restrictions during COVID-19, notably in sectors like healthcare, groceries, and fashion, indicating an expansion of the country’s e-commerce sector beyond the previously dominant electronic goods sector409
MSMEs, which account for 35 per cent of the total employment in the country, were hit hard by the pandemic, with ~95 per cent reporting moderate to very high revenue risk levels until March 2021. In Sri Lanka, MSMEs contribute 52 per cent to the GDP, 35 per cent of total employment and 20 per cent of exports410; they account for over 90 per cent of the total enterprises in the non-agricultural sector, employing nearly 2.3 million persons.411
In a survey of 54 MSMEs in Sri Lanka conducted from April to July 2020, 94.6 per cent of all respondents expected to be at Moderate, High or Very High revenue risk levels in the 12 months April 2020 to March 2021.412 In another survey of 64 enterprises conducted from April to June 2020, 62 per cent, 71 per cent, and 31 per cent of micro, small, and medium enterprises in Sri Lanka reported being strongly affected
405 Trading Economics, 2020 406 Trading Economics, 2020 407 Fitch Solutions, Sri Lanka's Domestic Pharmaceutical Industry To Benefit From Increased Government Investment, September 2020 408 Trading Economics, 2020 409 Daily Mirror Sri Lanka article, May 2020 410 UNESCAP, COVID-19 and South Asia, June 2020 411 UN SDG, The Impact of COVID19 on the MSME Sector in Sri Lanka, May 2020 412 Sandbox Consultancy Services, Micro Enterprise and the Sri Lankan Economy – Post-COVID-19 insight, September, 2020
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Figure 40: Risks of MSME business closures in Sri Lanka Percentage of respondents based on survey of 64 enterprises from April – June 2020
Early evidence suggests that MSMEs undertook layoffs in response to economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food for children were limited to the early months of the pandemic; reports of businesses diversifying to digital sales channels began to emerge as the pandemic progressed, but evidence of MSMEs utilizing digital delivery channels was not significantly noted.
Economic downturn limited business’ ability to pay salaries and maintain employees, disproportionately affecting women in RMG and informal workers in tourism • In a survey conducted from April to May 2020, paying staff salaries was highlighted as the primary issue for 50 per cent to 70 per cent of MSMEs; in-depth interviews indicated that if the impact of the COVID-19 further continues, MSMEs would resort to measures such as layoffs and salary cuts to reduce costs414 • As of August 2020, an estimated 100,000 employees in the RMG sector were expected A: Layoffs and to be laid off, in addition to several others experiencing wage cuts415 wage cuts • In tourism, 200,000 jobs were projected to be at risk over 2020, with ~20 per cent of all direct employees expected to permanently lose their jobs416; almost all contract-based workers in the sector had already lost their jobs as of May 2020417 • Women in RMG and informal workers in tourism were at high risk of job loss due to their significant representation in these highly impacted sectors Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints B. Disruption in In the early months of the pandemic, disruptions to MSMEs and other actors engaged products and distribution channels adversely impacted food supply and contributed to food services inflation; limited reports of such disruptions have emerged in the last quarter of
413 International Trade Center, COVID-19 Business Impact Survey: Sri Lanka, June 2020 414 U. Ruhuna, COVID-19: THE SOCIO-ECONOMIC IMPACT ON SRI LANKA, August 2020 415 Apparel industry fears 100,000 job losses post-COVID-19, August 2020 416 World Bank, COVID-19 and Tourism in South Asia, June 2020 417 U. Ruhuna, COVID-19: THE SOCIO-ECONOMIC IMPACT ON SRI LANKA, August 2020
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2020, with experts hypothesizing that product and service delivery are well on the way to recovery • Movement restrictions on goods and people disrupted and led to labour shortages for MSMEs and other actors engaged in food delivery, leading to challenges in the distribution of essential food items, as of April 2020418 • Sri Lanka is highly dependent on India for rice import (accounted for 77 per cent of total imports in 2018); this could have compounded the implications of disrupted food distribution channels, as the distribution of imported food might have faced delays419 • These disruptions in food distribution likely contributed to early inflation in essential food items; from Dec’ 19 to March ‘ 20, although the domestic food price index fell by 1.4 per cent7, the price of staples like rice increased by 18 per cent420 Such movement delays to food items and resulting food inflation might have reduced children’s access to nutritious food, both physically and through enhanced affordability constraints Some businesses, notably in the areas of grocery and healthcare delivery, have adopted digital means to diversify delivery efforts, but trends in the uptake of such channels by SMEs have not been established • It is believed that Sri Lanka’s previously nascent e-commerce ecosystem (<1 per cent penetration of online retailing) is receiving a boost due to movement restrictions during COVID-19, notably in sectors like healthcare, groceries, and fashion, indicating an expansion of the country’s e-commerce sector beyond the previously dominant C: Diversification electronic goods sector421 of sales and • Data demonstrating national trends in diversification of delivery efforts by SMEs is delivery channels unavailable; however, emerging anecdotal evidence shows that SMEs are turning to digital channels of service delivery and sales, e.g., Creative Design, a Sri Lankan start- up which provides a marketing platform for small artisans, has turned to online business to continue product delivery during COVID-19422 Such diversification provides an alternate route for caregivers to access food and healthcare for their children; however, 66 per cent of the country’s population lack internet access and are at risk of exclusion from digital service delivery
Box 6: Trends in CSR funding and priorities in 2020 in Sri Lanka
• In a study of top 100 well capitalized companies listed on the Colombo Stock Exchange, 5.5 per cent of the companies carried out philanthropic CSR actions423 • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 890,000 came from the private sector, of which 90 per cent of the funding was for emergency response424
Emerging evidence already shows that child undernutrition and domestic violence against children might be exacerbated due to these responses; less evidence is available on reductions in access to basic education for children, but prevailing conditions (e.g., inadequate access to digital
418 USDA, COVID-19 and Food and Agriculture in Sri Lanka, April 2020 419 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic June 2020 420 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic June 2020 421 Daily Mirror Sri Lanka article, May 2020 422 UN SDG, The Impact of COVID19 on the MSME Sector in Sri Lanka, May 2020 423 Farwis et al, CSR during Covid-19 Pandemic: The case of Listed Companies on Colombo Stock Exchange in Sri Lanka, December 2020 424 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 134 connectivity) suggest that COVID-19 induced disruptions might cause children to miss out on basic education and drop out of school altogether.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Sri Lanka, with the impact of disrupted products and services having been limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
Figure 41: MSME actions impacting child rights issues in Sri Lanka
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Before COVID-19, 17 per cent Initial supply chain disruptions and Caregivers with access to digital platforms children <5 years in Sri Lanka were food unavailability might have have an alternate source of obtaining food, suffering from stunting, which was impacted nutritional intake in the but those without access may face risks of significantly lower than the regional early months. The economic impact further exclusion average of 35 per cent for South Asia; on undernutrition is further 15 per cent of children <5 years were exacerbated by disruptions to school- suffering from wasting, which was in based nutrition programs, which have line with the regional average of 14.8 reported a 75-100 per cent reduction per cent for South Asia.425 prolonged in coverage, as of September 2020.427 food security challenges arising from lower household incomes and inflation in staple foods can further exacerbate child undernutrition in the country. Emerging evidence suggests that COVID-19 already started to impact child nutrition in Sri Lanka in 2020. In a survey conducted from May to July 2020, 63 per cent of households in Sri Lanka reported relying on less expensive and lower quality food due to reduced income, while 29 per cent reported having reduced food portions for their children.426 Child Protection Domestic violence Falling household incomes and stress, combined with school closures and home confinement norms were seen to lead to a 44 per cent increase in violence against children during the
425 UNICEF SDG dashboard 426 World Vision, Unmasking the Impact of COVID-19 on Asia’s Most Vulnerable Children, June 2020 427 UNICEF, Tracking the situation of COVID-19
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first three months of the lockdown in Sri Lanka.428 Education Basic education Before COVID-19, Sri Lanka had amongst the highest enrollment rates in the region, with 99.1 per cent primary and 91.0 per cent secondary enrollment, far exceeding regional averages.429 However, schools in Sri Lanka closed down in April 2020 due to the COVID-19 outbreak; while schools were successfully reopened in August 2020 after 4 months of closure430, they were forced to close again in October after a new outbreak occurred in Colombo.431 With ~66 per cent of the total population of the country lacking access to the internet432, these school closures can potentially deprive several children of basic education due to the inability to participate in remote learning. A survey of 28,000 girls across 8 countries, including Sri Lanka, by Room to Read found that ~50 per cent were at risk of dropping out; however, data specific to Sri Lanka remains unavailable.433
In response to the immediate economic impacts of COVID-19, the government of Sri Lanka rolled out several economic relief measures; direct cash and in-kind transfers constituted the majority of these measures, with some efforts to provide fiscal stimuli to the economy (e.g., through interest rate reductions), and provide capital and debt moratoriums to SMEs and to the tourism and apparel sectors.434
However, limited dedicated action was taken to safeguard informal workers and explicitly protect child rights through government measures. Gaps remain in government efforts to expand and strengthen fundamental social insurance mechanisms for informal workers, who are often not covered by such programmes. Moreover, despite some government efforts to provide basic essentials to children in the early months of the pandemic, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
The government implemented several social assistance programmes to provide immediate economic relief to workers impacted by COVID-19. The government disbursed various direct cash and in-kind transfers to directly provide financial assistance to workers impacted by layoffs or job losses, as well as aid low-income segments and groups such as women, children, and the elderly; the existing state poverty alleviation programme was also ramped up to expand relief efforts. However, there was limited dedicated focus on protecting informal workers who are often not covered by such social assistance schemes: • The COVID19 Healthcare and Social Security Fund was created on 23 March, with contributions by the government, private sector, and individuals, to provide (among other
428 Dalberg interviews 429 World Bank data , 2020 430 UNESCO, Schools reopen with safety measures in Sri Lanka, 2020 431 AP, The Latest: Sri Lanka postpones school reopening for virus, 2020 432 World Bank data, 2019 433 NST, Across Covid-19-battered Asia, girls are quitting school to work , 2020 434 ILO, Country Policy Responses, December 2020
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COVID-19 specific services) basic essentials to women, the elderly, children, and low-income and vulnerable groups • On 30 March, the Presidential Task Force was directed to implement one-off cash transfers to poor households, senior citizens, persons with disabilities, farmers insures by the Farmers’ Insurance Scheme, and chronic kidney disease patients, along with (unspecified) support to private businesses which are not in a position to pay employee wages • Beneficiaries of Samurdhi (the state poverty alleviation programme) were provided with weekly food rations (rice, lentils, onions) along with a cash advance of LKF 10,000 each • Additionally, salaries of LKR20,000 per month were guaranteed to 100,000 newly recruited graduates from poor households in March 2020
In addition, macroeconomic fiscal measures were implemented by the country’s central to help stimulate economic activity and relieve pressures on borrowers. To stimulate borrowing and economic activity, in April 2020, the Central Bank of Sri Lanka reduced interest rates to 6 per cent (Standing Deposit Facility Rate) and 7 per cent (Standing Deposit Lending Rate) to enable domestic financial institutions to expand credit to businesses and individuals. In addition, on March 23rd 2020, interest rates on credit card transactions below LKR50,000 were capped at 15 per cent, while monthly charges were reduced by 50 per cent. To relieve financial pressures on borrowers, a 6-month moratorium (until end September 2020) on loan repayments was provided to 1.5 million self-employed three-wheeler drivers, bus and van owners, while repayments to commercial banks on personal loans (below LKR1 million) were postponed to the end of June 2020.
A few measures were also taken to provide relief to MSMEs, as well as to the tourism and apparel sectors, in particular by providing working capital and easing debt repayment pressures. Facilitated by the Central Bank of Sri Lanka, a working capital loans were provided to the tourism, apparel, and SME sectors, along with a 6-month debt moratorium 6-months (till end September 2020).
With financial survival assuming top priority for most MSMEs as they struggle to stay afloat, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Sri Lanka; hence, there remain several opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection:
Table 12: List of potential interventions for UNICEF Sri Lanka
Support strengthening and expansion of social protection systems through evidence building and advocacy Advocate for providing and/or strengthening financial assistance and insurance programmes for workers in the informal sector, especially for overlooked populations such as domestic workers Rationale: State social insurance schemes do not currently Relevance: target informal workers or provide unemployment/ loss of - All sectors employment benefits, putting informal workers with already Potential partners: unsteady income streams at high risk during times of - Government of Sri Lanka economic instability; moreover, most COVID-19 policy responses have not specifically targeted informal workers. The absence of adequate social insurance for informal workers, combined with the high likelihood of such workers
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losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these informal workers Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF could - Business as provider of goods and services; work with MSMEs and other actors to develop guidance and Business as employer; Business impact on tools (e.g., due diligence guidance on policy commitments communities and the environment: MSMEs and codes of practice for child rights, child safeguarding must take deliberate actions to not harm toolkit for MSMEs, child rights impact assessments, reporting the rights of children of their workers, in for MSMEs) for different sectors to understand the impact of the marketplace and in the broader their business decisions and operations on children and communities recover in a way that does not harm child rights. Potential ecosystem partners: - NGOs and foundations - Industry associations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for strong regulations mandating family friendly workplace policies, including paid maternal leave, with special focus on informal enterprises Rationale: While the law mandates 12 weeks of fully paid Relevance: maternal leave, this policy covers only 33-65 per cent of all - All sectors, with focus on sectors with employed women in the country; it is likely that women in high representation of women – RMG and informal work remain uncovered by these policies due to the textiles, agriculture temporary and unprotected nature of their employment; as Potential partners: COVID-19 threatens to exacerbate child undernutrition, it is - Ministry of Labour and Labour Relations crucial to enact such policies which can enable caregivers to - Employer and worker organizations dedicate adequate time and focus to child nutrition (through - ILO practices like exclusive breastfeeding) in the critical early childhood years Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Work with other UN agencies to generate evidence on the need for dedicated livelihood support for vulnerable workers in sectors employing large proportions of informal workers and women Rationale: While some economic relief was provided to the Relevance: Sectors with high level of tourism and garments sectors through debt moratoriums, informality – agriculture, construction, measures specifically aimed at protecting informal workers or tourism; sectors with high share of female women in sectors where they are concentrated were limited; employment – RMG and textiles, agriculture these vulnerable groups might need dedicated livelihood Potential partners: support as they are at high risk of being impacted by COVID- - Government of Sri Lanka 19 induced livelihood losses, which in turn might reduce - ILO access to nutrition, healthcare, and education for children in - UNDP these vulnerable households Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy
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Convene local businesses and MSMEs to co-develop ways to affordably expand the reach of digital delivery channels, especially in sectors relevant to child wellbeing, such as essential food delivery, healthcare services, and education Rationale: While there have been some reports of shifts Relevance: ICT, sectors with high impact on towards digital service delivery in light of COVID-19, there child rights – agriculture and essenitial food has been limited focus on expanding such delivery to services, healthcare, education underserved or vulnerable populations (low-income segments, segments with limited access to advanced digital Potential partners: technology), enhancing risks of deprivation among children - Local businesses and MSMEs belonging to these underserved groups; moreover, significant - E-commerce platforms MSME engagement has not been noted, with opportunities - Finance providers (banks, MFIs) to further engage this segment in emerging digital service - Digital payments platforms delivery Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Identify and facilitate coordination among relevant private sector actors who can make improvements in digital connectivity, in order to expand access to remote learning and digital healthcare Rationale: Only 36 per cent of the population has access to Relevance: internet connections, severely impacting access to remote - ICT sector learning and digital healthcare for children, as COVID-19 has Potential partners: disrupted traditional in-person education and healthcare - Ministry of Federal Education and delivery Professional Training - Private schools and tutors - Content developers - Ed-tech companies Undertake research to assess the impact of school closures on learning levels, and work with businesses and other actors to cater to the learning loss as schools open Rationale: Businesses and other actors can support students Relevance: in catching up on lost education by establishing rapid - Programming area: Education assessment systems and supporting remedial education. - ICT sector Potential partners: - Ed-tech platforms - NGOs
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8.6 China
China has successfully kept new daily COVID-19 cases to double digits since August 2020, largely owing to stringent government measures in response to the virus. In early January 2020, China determined that the pneumonia outbreak in Wuhan was caused by a novel coronavirus. This triggered strict containment measures including a lockdown of the Hubei province, national large-scale travel restrictions, social distancing, and quarantine of returning migrant workers. The government began relaxing national-level measures in February, keeping in place social distancing and favoring targeted localized restrictions in new hotspots. The spread of the virus has largely been contained in China, with minimal growth in case load since March, and a near ‘flattening of the curve’ since August (Figure 42)435.
Figure 42: COVID-19 cases & Stringency of measures in China436
100 100
80
60
40
20 IndexStringency ConfirmedCases (1000s) 0 0 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov
Confirmed cases (1000s) Stringency Index
Due to the stringent government measures, the country’s GDP growth was projected to hit a 40- year low of 1.9 per cent in 2020; however, the economy started to recover in 2020 itself and is expected to rebound to a GDP growth rate of 8.2 per cent in 2021. While the economic projections are still evolving, as of November 2020 the IMF estimated that the GDP growth would slow down to 1.9 per cent in 2020, with a strong expected recovery to 8.2 per cent in 2021. (Figure 43). 437 China’s economy showed strong signs of recovery in Q3 2020 itself, registering growth of 4.8 per cent year-on-year despite Q1 contractions of 6.8 per cent.438
435 Oxford COVID-19 Government Response Tracker 436 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 437 IMF, World Economic Outlook 2020 438 BBC, China's economy continues to bounce back from virus slump, 2020
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Figure 43: GDP, constant prices, per cent change in China439
10%
8% 6.1% 8.2% 5.8% 6%
4% 5.7% 5.6% 5.5%
2% 1.9% 0% 2019 2020 2021 2022 2023 2024 2025
IMF - Oct 2020 IMF - Oct 2019
The pandemic and movement restrictions led to initial disruptions to provision of healthcare and nutrition services, but alternate methods (digital healthcare, private sector partnerships for delivering essential foods) to provide these services were soon devised as early as the first quarter of 2020; dedicated focus was placing on ensuring continuity of child protection services despite the pandemic.
• Healthcare services: Decrease in utilization of in-person services, but increase in telehealth services: • Decrease in the daily number of pediatric visits between January and March 2020 to about 25 per cent of the same period in 2019, as a result of social restrictions and hospital controls, with the largest decrease in visitations for common infectious diseases440 • Increase in telehealth services (online medical services) as early as March 2020, which has a potential to reduce the strain on urban hospitals by providing remote solutions to rural populations441
• Nutrition services: Disruptions in some traditional services, but quick action to resume outreach • Disruptions were noted to school feeding programs from school closures, resulting in the government working closely with the private sector to continue food distribution to students442, including companies like Tetra Pak to deliver school milk to children at home, as of April 2020443
• Child protection services: Increased focus on ensuring continued services • Expansion in reach of child protection services by UNICEF China despite restrictions as of March-April 2020, by advocating for social workers to be classified as essential workers and ensuring the procurement of personal protective equipment for them444
439 IMF, World Economic Outlook, October 2020 440 Li et al, Changes in Children's Healthcare Visits During Coronavirus Disease-2019 Pandemic in Hangzhou, China, 2020 441 TIME, How the Coronavirus Is Helping to Fix China’s Broken Healthcare System, 2020 442 Lieberman, WFP repackages efforts to reach hungry children as COVID-19 closes schools, 2020 443 Tetra Pak,, Continuing to deliver nutrition to school children during COVID-19, 202 444 UNICEF, Protecting Children from Violence in the Time of COVID-19, 2020
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• Increase in crisis hotlines from 63 before the pandemic to 625 in 31 provinces, as of March 2020, with over 200,000 calls answered. Of the 625 hotlines, ~67 per cent provide 24/7 services445
Most sectors (tourism, textiles, construction) in the country have rebounded from the initial negative impacts of COVID-19, while aviation is experiencing slower recovery due to moderate dependence on international movement; agriculture was largely resilient to COVID-19 induced disruptions, while some sectors (healthcare, ICT, e-commerce) have even emerged as opportunity areas due to COVID-19 induced demand. Textiles, readymade garments, and construction have posted strong recoveries from the initial economic downturn. With ~96 per cent of tourism revenue coming from domestic tourism, a revival of domestic tourist activities contributed to a strong recovery of the sector as a whole in 2020; domestic aviation also posted signs of recovery, but international aviation, which accounts for ~36 per cent of the sector’s revenue, continued to face disruption due to COVID-19 in 2020. Signs of positive growth have been noted in the agriculture sector despite the crisis, while pharmaceuticals and e-commerce industries have received boosts due to COVID-19. Figure 44 presents a high-level assessment of some of the key sectors in the country.
Figure 44: Sectoral impact of COVID-19 in China
Key: Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment Tourism • In the first half of 2020, China’s tourism revenue fell by 77 per cent446 • However, the country saw encouraging recovery in second half of 2020, with domestic tourist visits during “golden week” (Oct 1-8) reaching 79 per cent of visits during the same period in 2019447, with expected positive impacts on related sectors like small handicraft producers, street vendors, roadside food stalls, etc. • Although there were no reports of significant revival in international tourism arrivals as of December 2020, domestic travel and tourism revenue accounted for ~96 per cent of the total travel and tourism revenue in 2019, indicating that the recovery of domestic tourism represents the revival of a large share of the sector as a whole RMG and • Chinese apparel and footwear exports fell by over USD 1 billion in Feb-May 2020448 textiles • However, China’s textile exports in totality increased by 32.4 per cent in the first half of 2020449 with exports of facemasks, that are highly related products that can be manufactured by textile producers – large companies and MSMEs alike – soared by over 1,000 per cent in March-April 2020450; this increase in activity likely had trickle- down effects on actors along the supply chain, such as cotton farmers, raw material producing SMEs, etc. Construction • The sector contracted by 16.3 per cent in January and February 2020 • However, recovery was quick as China’s real estate development investments rose by 7 per cent in April as it resumed 90 per cent of key projects, including 97 per cent of
445 Wang et al, Hotline services in China during COVID-19 pandemic, 2020 446 Reuters, China's domestic travel revenue likely to halve to $394 billion in 2020: report, Sept 2020 447 Xinhua, China's domestic tourism to fully recover by yearend, Oct 2020 448 WEF, How COVID-19 has affected trade, in 8 charts, Nov 2020 449 CGTN, China's imports and exports rebound in June as recovery gains momentum, Jul 2020 450 Fuch et al, China’s mask diplomacy: Political and business ties facilitate access to critical medical goods during the coronavirus pandemic, Sept 2020
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major highway and waterway projects and 87 per cent of airport projects451; large construction companies as well as contracting MSMEs likely benefited from this quick resumption of activity Aviation • Initial restrictions on air travel were eased sooner than in most other countries, and domestic aviation has steadily recovered and even improved beyond pre-COVID-19 levels • Domestic passenger flights in September 2020 exceeded pre-COVID-19 levels in 2019 by 3.5 per cent452 • International aviation, which accounts for ~36 per cent of the sector’s revenue, was yet to see significant recovery as of December 2020, which is likely to dampen the sector’s overall revival Agriculture • The sector largely remained resilient to COVID-19 induced disruptions, as reflected in growth recorded in specific sub-sectors: according to the Ministry of Agriculture and Rural Affairs, in the first quarter of 2020, China recorded a 3.5 per cent year-on-year increase in the added value of the planting industry, and breeding sows in stock expanded by 9.8 percent from the end of 2019453 • Moreover, digital delivery channels provided a boost to the industry: the online retail sales for agriculture products went up by 31 per cent compared to 2019, while that of fresh foods such as meat and vegetables grew by 70 per cent454, benefiting several smallholder farmers and MSMEs in food retail Pharmaceutic • At the beginning of 2020, disruptions to China’s API supply significantly affected als and pharmaceutical production, as China is the largest producer of several bulk APIs healthcare including penicillin, statins, and vitamins455 • While exact figures are unavailable, some experts note that medicine sales grew significantly during the first quarter of 2020; this drive for taking good care of the body is linked to COVID-19, but also has a long-lasting side effect: according to the Nielsen Company, 60 per cent of Chinese respondents vowed to increase spending on medical examinations456 • Moreover, the telemedicine industry recorded significant growth due to COVID-19: Between late 2019 and the summer of this year, the number of telemedicine providers in China jumped from <150 in late 2019 to nearly 600 in mid-2020457 ICT and e- • The sector recorded significant growth, as reflected by reports from major online commerce retailers • Alibaba recorded 34 per cent year-on-year growth in revenue from April to June 2020, while JD.com reported a 2500 per cent increase in revenue for the same year458 • The growth in the e-commerce sector has been driven by increasing online purchases of essentials like food, household and kitchenware, sports and fitness equipment, medicines, and online education; moreover, MSMEs producing a variety of these consumer goods have also been integrated by large e-commerce platforms like Alibaba
451 Lescohier, Asia Pacific: Fighting to recover from Covid-19, 2020 452 Reuters, UPDATE 1-China's domestic flight numbers top pre-COVID-19 levels in Sept, Oct 2020 453 XinhuaNet, Economic Watch: China's agriculture sector remains robust amid COVID-19 headwinds, April 2020 454 1421Consulting, The impact of COVID-19 on E-commerce in China, July 2020 455 Healthcare Asia, China's API supply disruption worries pharma companies, 2020 456 1421Consulting, The impact of COVID-19 on E-commerce in China, July 2020 457 The Wall Street Journal, Covid-19 Gives Boost to China’s Telemedicine Industry, October 2020 458 CNBC, China's e-commerce giants get a boost as consumers continue to shift online after coronavirus, 2020
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MSMEs employ 82 per cent of the workforce in China, with 65 per cent of all MSME workers employed in the manufacturing sector; during the peak of restrictions, MSMEs across the board faced major revenue shortfall, with total MSME revenue in the first quarter of 2020 having declined by 50 per cent compared to the same period in 2019. MSMEs make up 99 per cent of enterprises in China, contribute ~60 per cent of total GDP, and employ 82 per cent of the workforce.459 Across MSMEs, the manufacturing sector generates more than half of MSME revenue, accounting for ~52.8 per cent, followed by the wholesale and retail sector at ~35.2 per cent, and construction at 4.6 per cent. From an employment perspective, the manufacturing sector hires ~65 per cent of all MSME employees, followed by wholesale and retail at 12.9 per cent and construction at 12.1 per cent. 460
At the peak of the pandemic, a study in February found that SMEs were severely affected with 80 per cent of firms yet to resume operations, while 20 per cent and 64 per cent did not have sufficient cashflow to last more than 1 and 3 months respectively. The study uncovered that the light industry sector faced the largest challenges driven by disruptions in the industrial chain, shortages of raw materials, price volatility, and labour shortages, with export-focused enterprises seeing a decline of 10 per cent in orders.461 A separate study found that MSME Q1 revenue declined by 50 per cent compared to the similar period in 2019, a decrease of about RMB6.7 trillion (~US$1 trillion). The worst affected MSMEs in Q1 of 2020 saw their revenue for the month of March decline to less than half compared to the same period in 2019 – education 11.8 per cent of Q1 2019 revenue, accommodation and catering (23.5 per cent), culture, sports and entertainment (30 per cent), and manufacturing (40 per cent). While the decline in manufacturing revenue was driven by supply-side pressures including labour shortages and supply chain disruptions, the services sectors above were largely impacted by a fall in demand resulting from containment measures.462
As China’s economy rebounded, MSMEs too began to recover, with 91 per cent of SMEs having resumed operations in May 2020; however, MSME recovery was at a slower pace than larger firms, 99.1 per cent of which had resumed operations by May 2020; MSMEs in the agriculture sector recovered sooner than those in other sectors. Returning growth of the China economy spurred SME recovery, though evidence suggests that SMEs are recovering at a slower rate than that of larger firms: 91 per cent of SMEs had resumed operations as of 20th May compared to 99.1 per cent of large enterprises as of 11 May 2020.463 Furthermore, a survey published in in October 2020, found that a vast majority of SMEs have reopened and rehired workers post COVID-19 restrictions, but ~18 per cent of SMEs closed for good. Some experts noted that agricultural SMEs recovered faster than those in manufacturing, business and residential services. This was attributed to the fact that major challenges to non-manufacturing MSME recovery are mainly on the demand-side, and demand in the agricultural sector was more stable and sustained than in other sectors. 464
Early evidence suggests that MSMEs undertook layoffs in response to economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and healthcare for children were limited to the early
459 Liu, SME Development in China: A Policy Perspective on SME Industrial Clustering, 2008 460 Liu, SME Development in China: A Policy Perspective on SME Industrial Clustering, 2008 461 Dai et al, The Impact Of Coronavirus On China’s SMEs, 2020 462 Ping An Economic Research Centre, China’s SMEs Amid the Pandemic, 2020 463 OECD, Coronavirus (COVID-19): SME policy responses, 2020 464 Zhang, Survey: China’s Small and Medium-sized Enterprises Rebounded After the COVID-19 Lockdown, But Economic Problems Linger, 2020
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While the urban unemployment rate returned to pre-COVID-19 levels by September 2020, concerns remained around the impact on rural populations, especially rural migrant workers • At the peak of the crisis, China’s official urban unemployment rate spiked from 5.3 per cent in January to 6.2 per cent in February465 • As of September 2020, the official urban unemployment rate has since returned to 5.4 per cent466, though concerns remain over migrants who returned to their villages during the pandemic and have no jobs to return to in the city467 A: Layoffs and • Experts suggest that as urban and factory jobs have been lost, newly unemployed wage cuts workers have migrated back to rural villages where they are absorbed into temporary small-scale agricultural work468 • Moreover, as SMEs generate ~80 per cent of employment and mainly hire employees from rural areas, the permanent closure of ~18 per cent of SMEs and slower recovery of SMEs in general will have significant impact on rural households, with estimates indicating that rural job loss rates may be as high as 25 per cent, as of October 2020469 This loss of livelihood is likely to have impacted caregivers employed in MSMEs, especially those in rural areas, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints Lockdowns impacted agricultural production and offline education during the beginning of the year, especially smallholder farmers and educational SMEs; limited reports of such disruptions have emerged in the second half of 2020, with experts hypothesizing that product and service delivery are well on the way to recovery • At the peak of the pandemic, nationwide travel restrictions resulted in labour, seed, and fertilizer shortages amongst smallholder farmers, with a survey finding that 60 per cent of farmers were pessimistic about the planting season470 B. Disruption in • Nationwide lockdowns resulted in local factories remaining closed despite declining products and cases, triggering a shortage of 1.3 million tons of phosphate fertilizers, or 40 per cent services of annual consumption471 Such disruptions to agricultural production might have reduced availability of nutritious food for children in the initial months, but as of May 2020, China was proactively increasing its national and state stockpiles of food and energy supplies472 • During the lockdowns, offline education institutions for children were unable to operate and faced refund demands from parents amidst revenue declines and cash flow limitations, forcing a several education SMEs to file for bankruptcy473 COVID-19 accelerated business uptake of digital technology, including SMEs, C: Diversification especially in the essential food delivery and healthcare spaces of sales and • China’s robust digital economy that accounts for ~34 per cent of GDP proved delivery channels resilient during the pandemic, and even saw an increased uptake of digital technology amongst business, especially in the food delivery and healthcare spaces474
465 He & Gan, 80 million Chinese may already be out of work. 9 million more will soon be competing for jobs, too, 2020 466 Trading Economics, 2020, China Urban Survey Unemployment Rate 467 Economist, Millions of Chinese students brace themselves for joblessness, 2020 468 NPR, With China's Economy Battered By Pandemic, Millions Return To The Land For Work, 2020 469 Zhang, Survey: China’s Small and Medium-sized Enterprises Rebounded After the COVID-19 Lockdown, But Economic Problems Linge, 2020 470 He & Gan, 80 million Chinese may already be out of work. 9 million more will soon be competing for jobs, too, 2020 471 Financial Times, China’s farmers fear food shortages after coronavirus restrictions, 2020 472 Tan, China stocks up food and oil supplies as coronavirus spurs fears about shortages, 2020 473 Ping An Economic Research Centre, 2020 474 China’s Rapid Shift To A Digital Economy, June 2020
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• For example, in the food delivery space, Alibaba is making local deliveries of fresh produce to Chinese consumers through its online shopping site Taobao, sourcing orders “hyperlocally” from SME retailers and independent chains; rural farmers leveraged Alibaba’s 6.18 mid-year shopping festival to sell 250,000 kilograms worth of produce475 • In the healthcare space, China has seen a rise activity on digital health platforms like Ping An Good Doctor that enable remote medical consultation476 Such diversification provides an alternate route for caregivers to access food and healthcare for their children
Emerging evidence already shows that child undernutrition might be exacerbated due to these business responses; some reports also suggest that child mental health issues have risen due to COVID-19, but evidence linking this increase to business responses is scarce.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in China, with the impact of disrupted products and services having been limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
Figure 45: MSME actions impacting child rights issues in China
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels
Nutrition Undernutrition / Before COVID-19, 8 per cent children Caregivers with access to digital platforms <5 years in China were suffering from have an alternate source of obtaining stunting, which was marginally lower food, but those without access may face than the regional average of 8.9 per risks of further exclusion cent for Southeast Asia.477 Early evidence suggested how lower household incomes impacted nutrition in rural China: in a survey conducted in 726 Chinese villages in mid-February, 55 per cent of responding villagers reported that they have reduced their spending on food in response to income loss, and are buying low-cost staples in lieu of nutritious but expensive foods478 Child Protection Mental health / issues
475 IFPRI, COVID-19 and resilience innovations in food supply chains, July 2020 476 China’s Rapid Shift To A Digital Economy, June 2020 477 UNICEF SDG dashboard, 2020 478 REAP China COVID-19 Survey, February 2020
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In China, suicide rates among 5 to 14 year olds was higher, at 0.66 deaths per Increased availability and uptake of online 100,000 individuals, than global averages (0.63 deaths per 100,000 individuals). mental health services, but those without The impact of COVID-19 on child mental health is a potential concern, given that access face risks of further exclusion evidence from the 2003 SARS outbreak in China showed increased anxiety and depression amongst children as a result of confinement.479 Furthermore, a survey on 1,241 students in China surfaced concerning findings regarding students’ mental health as a result of COVID-19: a) increase in suicide attempts of more than 2x, from 3 per cent in November 2019 to 6.4 per cent in May 2020, and b) increase in the percentage of students who had thought about suicide (suicidal ideation) from 22.5 per cent in November to ~30 per cent in May 2020.480 A (non- peer reviewed) study conducted on 30,861 parents in April 2020 revealed that children’s behavior and parents’ physical, emotion and cognition were significantly correlated with epidemic-related factors481
The government of China responded to the economic impacts of COVID-19 primarily by ramping up existing social assistance and insurance mechanisms, as well as by supporting MSMEs in their financial survival and digital transformation; some efforts were made to provide fiscal stimuli to the economy (e.g., through bank reserve ratio reductions) and re-skill rural migrant workers who had been displaced from employment due to COVID-19.
However, gaps remain in incorporating an explicit child rights lens in government response measures, notably in the expansion of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
The government ramped up its social insurance and assistance programmes to provide immediate economic relief to workers impacted by COVID-19. Some emergency cash transfers and subsidies were utilized to provide immediate economic protection and relief to businesses and people in the face of COVID-19. Several such measures were implemented by building upon existing social insurance and assistance structures in China, such as by ramping up the benefits already provided by schemes, expanding the reach and coverage of schemes, or reducing mandatory social insurance contributions:482
• To combat the economic impacts of COVID-19, the Government of China completed the special transfer payment of 2 trillion yuan ($289.72 billion) to local governments, to channel funds straight to prefecture and county-level governments and directly benefit businesses and people struggling due to COVID-19 • CNY 3.71billion (USD 525 million) of price subsidies were provided to people in need, while a total of 3.2 million companies were paid 42.3 billion CNY (~$5.98 billion) in refunded unemployment insurance premiums, which benefited 85.13 million employees • Moreover, the finance ministry cut mandatory social insurance payments from employers by CNY 1 trillion to incentivize companies to retain employees
479 OECD, Combatting COVID-19's effect on children, 2020 480 Dailymail article, 2020 481 Bai et al, The effect of the COVID-19 outbreak on children’s behavior and parents’ mental health in China, 2020 482 IMF, Country Policy Responses, December 2020
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• The 2020 Government Work Report also urged a series of measures to meet people’s basic living needs, including raising government subsidies for basic medical insurance for rural and non-working urban residents; government subsidies per capita were mandated to be increased by 30 yuan to no less than 550 yuan per person per year • Unemployment social assistance for up to 6 months was provided to unemployed segments who were previously not eligible for unemployment social insurance benefits, and increased social assistance to families in difficulty • Basic pension payment for retirees were increased: starting January 1, 2020, the basic pension level was adjusted to 5 per cent higher than the 2019 monthly basic pension for retirees
In addition, macroeconomic fiscal measures were implemented by the country’s central bank to help stimulate economic activity and inject liquidity into the country’s financial system. In February 2020, the People’s Bank of China launched CNY 1.2 trillion as part of a public market reverse repurchase operation to maintain the liquidity of the banking system and meet the reasonable financing needs of the market. It also reduced the banks' mandatory reserve ratio in March and April, freeing up CNY 550 billion and CNY 400 billion respectively to support the economy.
Several measures were also undertaken to help SMEs retain their employees, pivot to digital means of operation, and support their overall financial resilience in the face of COVID-19. To incentivize employment retention, SMEs with low layoff rates were offered refunds of up to 100 per cent of previous year’s unemployment contributions. The “Digital Transformation Partnership Action” was launched to help SMEs to reduce the cost of digital transformation, shorten the transformation cycle, and improve the success rate of transformation. In addition, a wide range of policy measures were announced for SMEs at the regional level in China. These include deferred tax payments for SMEs, reducing rent, waiving of administrative fees, subsidizing R&D costs for SMEs, social insurance subsidies, subsidies for training and purchasing teleworking services, and lowering lending rates. Furthermore, banks were granted extra funding to spur SME loans.
A few measures were also undertaken to support rural migrant workers in the long run, such as through skills provision and housing support. The Ministry of Human Resources and Social Security issued the Vocational Skills Training Plan for migrant workers, to enable them to secure stable employment opportunities beyond COVID-19. Moreover, efforts were undertaken to strengthen long- term support structures for migrant domestic workers, such as providing public rental housing and government-supported affordable rental homes for domestic workers in Shanghai, and encouraging universities and vocational colleges to set up domestic services-related majors to offer opportunities for domestic workers to receive professional training and education. The Ministry of Justice also intensified ongoing efforts to provide rural migrant workers with legal aid necessary for tackling issues like unpaid wages.
With financial recovery assuming top priority for most MSMEs, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in China. There have been reports of recovering MSMEs, such as those in the agriculture sector, adopting alternate service delivery channels like digital platforms. While such measures do contribute to sustained
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 148 distribution of goods and services for children, there have been few reports MSMEs engaging in fundamental child rights protection measures.
Hence, there remain high-potential opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection, with special focus on the identified high-risk child rights issue areas (undernutrition, mental health issues).
Table 13: List of potential interventions for UNICEF China
Support strengthening and expansion of social protection systems through evidence building and advocacy Support the creation of comprehensive databases tracking out-of-work returnee migrants in rural areas, to help make existing social assistance and re-employment/re-skilling programs for rural migrants more targeted Rationale: Rural migrant workers remain the most at-risk Relevance: group in the wake of the pandemic, with reports of such - All sectors workers being absorbed into temporary agricultural work Potential partners: after elimination of employment opportunities in the initial - Government of China months of the pandemic; if unaddressed, livelihood loss - Ministry of Labour and Social Security can reduce the affordability of nutrition, healthcare, and education for the children of these rural migrant workers Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF - Business as provider of goods and services; could work with MSMEs and other actors to develop Business as employer; Business impact on guidance and tools (e.g., due diligence communities and the environment: guidance on policy commitments and codes of practice for MSMEs must take deliberate actions to child rights, child safeguarding toolkit for MSMEs, child not harm the rights of children of their rights impact assessments, reporting for MSMEs) for workers, in the marketplace and in the different sectors to understand the impact of their business broader communities decisions and operations on children and recover in a way Potential ecosystem partners: that does not harm child rights. - NGOs and foundations - Industry associations Advocate for policies to mitigate breaches of child rights driven by increased children’s online activity during COVID-19 Rationale: COVID-19 has triggered a spike in children’s Target sectors: online activity. While data is currently limited, aggressive - Food and beverages sector marketing of less nutritious, processed food items could - Consumer goods sector cause unhealthy food consumption behaviour and rise in Business focus areas: overweight among children. Similarly, children may be - Business as a provider of goods and more exposed to marketing content that exploits children’s services for children and families: vulnerabilities and puts their safety at risk. Current policy Strengthening of policies that regulate MSMEs’ online marketing and other
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mechanisms to monitor marketing practices of businesses activities to prevent harm towards are limited. children Potential ecosystem partners: - National and regional governments - NGOs and foundations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for stronger and wider implementation of paid maternal leave policies across sectors Rationale: While the law mandates 14 weeks of fully paid Relevance: maternal leave, this policy covers only 10-32 per cent of all - All sectors employed women in the country; it is likely that women in Potential partners: informal work remain uncovered by these policies due to - Ministry of Labour and Social Security the temporary and unprotected nature of their employment; as risks of child undernutrition rise due to COVID-19, it is crucial to encourage and support breastfeeding through such policies, as a key lever to promote adequate early childhood nutrition. Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene local businesses to facilitate cross-sharing of best practices and innovations to expand the delivery of essential children’s services (such as food delivery, mental health services) Rationale: As child undernutrition and mental health issues Relevance: stand at risk at being exacerbated due to COVID-19, there - ICT sector have been signs of innovation in the private sector for - Sectors with high impact on child rights – combatting these issues (e.g., the use of AI by the start-up agriculture and essential food services, Tree Holes Rescue to monitor messaging platform activity healthcare, education and detect individuals at risk of suicide); if scaled through knowledge transfer among private sector actors, these Potential partners: solutions can potentially be used to reach a large number - Local businesses, start-ups, and of children. institutional investors in the space of mental health and food services
Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Identify and facilitate coordination among relevant private sector players (mental health providers, telehealth platforms, etc.) to help them expand the reach of digital mental healthcare services for children and women Rationale: Mental health issues prevailed among young Relevance: age groups and females in China even before COVID-19, - Healthcare sector with risks of exacerbation due to the pandemic; with Potential partners: increasing momentum in the digital economy, digital - Private mental health service providers service delivery presents a high-potential channel for - Telehealth platforms like Ping An Good ensuring that children and women receive adequate mental Doctor health support during and beyond COVID-19. - Mental health NGOs such as CandleX
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8.7 Indonesia
Despite fairly stringent lockdown style measures in Indonesia, the cumulative case load continued to rise and reached >500,000 as of November 2020. Indonesia recorded its first COVID-19 case on March 2, 2020. Various containment measures were instituted by the government, including banning international and domestic travel, closing schools, and restricting public events. Indonesia started to ease containment measures in June, although restrictions remained in Jakarta. The overall growth in the number of cases has remained rapid (Figure 46)483.
Figure 46: COVID-19 cases & Stringency of measures in Indonesia484
500 80
400 60
300 40 200
20 IndexStringency
100 Confirmed Cases (1000s) Cases Confirmed 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Confirmed cases (1000s) Stringency Index
As a result of stringent government restrictions, the GDP growth rate was projected to drop to - 1.5 per cent in 2020; however, the economy is expected to rebound to a 6.1 per cent GDP growth rate in 2021. While the economic projections are still evolving, as of November 2020 the IMF estimated that the GDP growth would contract to -1.5 per cent in 2020, with a strong expected recovery to a 6.1 per cent growth rate in 2021. (Figure 47). 485
Figure 47: GDP, constant prices, per cent change in Indonesia486
8% 6.0% 5.3% 6% 5.0%
4% 5.2% 5.1% 5.1%
2%
0% 2019 2020 2021 2022 2023 2024 2025 -2% -1.5% IMF - Oct 2020 IMF - Oct 2019
483 Oxford COVID-19 Government Response Tracker 484 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 485 IMF, World Economic Outlook 2020 486 IMF, World Economic Outlook, October 2020
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While COVID-19 led to an increase in certain social/protection services, various nutritional services were significantly affected. In a survey conducted across UNICEF Country Offices in September 2020, >75 per cent decline in coverage was reported for most nutrition services for children due to COVID-19, while some social protection services saw an increase in coverage; data on disruptions at provincial level was not available in the survey. 487 (Figure 48)
Figure 48: COVID-19 related change in coverage of services in Indonesia488
Nutrition services Social protection services
Nutrition support for pregnant and lactating women Child helplines Promotion of nutritious and safe diets for young children GBV risk mitigation including consultation with women (6-23 months) and girls Nutrition programmes in schools (school feeding, take Mental health and psychosocial support services home rations)
IFA Supplementation for Adolescent Girls Home visits by social service/ justice workers Legal/judicial processes, procedures or services for Early detection of wasting (Screening) children in contact with the law
Increase No change <10 per cent 10-24 per cent 25-49 per cent 50-74 per cent >75 per cent drop drop drop drop drop
While some sectors (tourism, manufacturing, aviation and transportation) in the country witnessed significant and prolonged negative economic impact, some sectors (agriculture, construction) witnessed relatively smaller impact and others (healthcare, e-commerce) even emerged as opportunity areas due to COVID-19 induced demand. Tourism, manufacturing (especially textiles), transportation, and aviation have been severely impacted, with most evidence suggesting that recovery is likely to be slow in these sectors. On the other hand, the impact on the construction and agriculture sectors have been limited, with both sectors projected to record positive growth in 2020, albeit at a slower rate than previous years. Moreover, signs of positive growth have been noted in the healthcare, ICT, and e-commerce industries. Figure 49 presents a high-level assessment of some of the key sectors in the country
Figure 49: Sectoral impact of COVID-19 in Indonesia
Key: Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment Tourism • In the first half of 2020, the sector suffered a revenue loss of USD 5.9 billion 489 • As of September 2020, domestic tourist arrivals were still 90 per cent below 2019 levels, while international tourist arrivals had fallen from 1.8 million over June- September 2019 to 152 over the same period in 2020
487 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 488 UNICEF, Tracking the situation of COVID-19 489 Statista, 2020
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• Although some signs of tourism activity were noted in Bali in October, recovery will likely be slow, as the country announced that it would remain closed to international tourists until the rollout of a COVID-19 vaccine490 • Moreover, sectors related to tourism, like accommodation and food services, were identified as “high impact” sectors over 2020 by a World Food Program assessment in May 2020491; local MSMEs in these sectors, such as street vendors, local food stalls, and small hotels were likely severely impacted by losses in tourism Manufacturin • Manufacturing was identified as a “high impact” sector by the World Food Program g assessment in May 2020492 • The aggregate level of manufacturing activity, reflected by the Manufacturing Purchaser’s Index (PMI), increased slightly in November 2020, as the PMI rose to 50.6 points (where a value >50 indicates expansion in activity and a value <50 indicates contraction) • However, this expansion was minimal and not enough to offset several months of <50 values; moreover, risks of contraction remained, as the virus continued to spread even late in the year 493 • This will severely impact SMEs in the sector, which comprise 99.96 per cent of total number of manufacturing enterprises and 87 per cent of the employment in the sector • Within manufacturing, comparative assessment data of impact across sub-sectors is limited, but textiles have been identified as a highly impacted sub-sector: in June 2020, the value of garment exports from Indonesia to the US, EU, and Japan was 70 per cent lower than in the same period in 2019; recovery of the textiles sector is expected to be slow, given its high dependence on imported inputs and international demand494 Aviation and • Transportation was identified as a “high impact” sector by the World Food Program transportatio assessment in May 2020495, likely impacting several domestic transportation operators n and MSMEs • The aviation sector has been hit hard by restrictions on international travel: the national carrier Garuda Indonesia suffered revenue losses of 58.2 per cent in the first 6 months of the year, and continued closure to international tourists is likely to keep revenues depressed496 • While domestic air travel was reallowed in June 2020, activity did not resume to pre- COVID-19 levels – the Lion Air Group, which is dominated by domestic flights, continued to operate below 70 per cent capacity as of September 2020497 Construction • The overall impact on construction by the end of 2020 was projected to be moderate, with the sector identified as “low impact” by the World Food Program assessment in May 2020498
490 Bloomberg, Battered Bali Sees Flicker of Recovery for Upcoming Holidays, November 2020 491 WFP, COVID-19: Economic and Food Security Implications, May 2020 492 WFP, COVID-19: Economic and Food Security Implications, May 2020 493 Jakarta Post article, December 2020 494 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 495 WFP, COVID-19: Economic and Food Security Implications, May 2020 496 Jakarta Post article, August 2020 497 PWC, Aviation industry amid the pandemic: Relying on domestic routes, September 2020 498 WFP, COVID-19: Economic and Food Security Implications, May 2020
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• According to GlobalData, the sector was projected to post a positive growth of 2.5 per cent over 2020 (as opposed to 5.8 per cent in 2019)499, with likely positive impacts on the small and mid-size contractors in the sector • However, some negative impacts were noted in the sector, with an observed decline of 4.5 per cent in the third quarter of 2020500
Agriculture • The impact on the agriculture sector was relatively smaller: the sector grew by 2.19 per cent in the second quarter of 2020, and by 2.15 per cent in the third quarter (a moderate decline from 3.3 per cent in 2019), boding well not only for farmers, but also for MSMEs involved in transportation and distribution • However, the growth in agriculture was not translated to segments of the agribusiness value chain which overlap with hard-hit sectors like manufacturing, for example, the processing industry having declined by 4.3 per cent in Q3 2020501 Pharmaceutic • The health services sector in Indonesia grew by 15.3 per cent in Q3 2020502 als and • The telehealth industry experienced notable growth: remote healthcare consultations healthcare were 294 per cent higher than pre-COVID-19 levels during lockdowns, and remained 161 per cent higher even after lockdowns, as of August 2020; these increases were noted not only on large telehealth platforms, but also via third party platforms, suggesting that smaller healthcare providers and MSMEs have also adopted digital channels of delivery503 ICT and e- • The ICT sector in Indonesia grew by 15.3 per cent in Q3 2020504 commerce • The e-commerce sector is projected to have grown substantially in 2020: as of September 2020, the management consulting company Redseer projected gross merchandise value (GMV) of e-grocery platforms to grow by 400 per cent in 2020, beauty and personal care by 80 per cent, fashion by 40 per cent, and electronics 20 per cent, opening new consumer segments to retail MSMEs across these categories505
MSMEs play a major role in the Indonesian economy, accounting for 97 per cent of the total employment in the country; moreover, MSME employment is predominantly informal, with 96 per cent of firms with less than 5 employees characterized as informal. MSMEs are a key contributor to the Indonesian economy, with estimates indicating a contribution of ~61 per cent of total GDP.506 MSMEs make up ~99 per cent of all enterprises in Indonesia, with close to 63 million MSMEs in totality employing over 116 million people, ~97 per cent of the total employment.507 51 per cent of small enterprises and 34 per cent of medium enterprises are owned by women. 508 Moreover, a majority of MSME employment is informal: while more recent data is unavailable, a survey by the Indonesian
499 MarketResearch.com, Construction in Indonesia: COVID-19 Sector Impact, 2020 500 Based on statistics from the Central Statistics Agency (BSP) as reported in AntaraNews, November 2020 501 Based on statistics from the Central Statistics Agency (BSP) as reported in AntaraNews, November 2020 502 Based on statistics from the Central Statistics Agency (BSP) as reported in AntaraNews, November 2020 503 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 504 Based on statistics from the Central Statistics Agency (BSP) as reported in AntaraNews, November 2020 505 Jakarta Post article, September 2020 506 Yulisman, Indonesian micro, small and medium-sized enterprises struggle to survive as revenues are hit, 2020 507 SME Finance, MSME Economic Indicators, 2020 508 IFC, Market Research Study, 2016
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National Statistical Authority from 2010-2013 found that 96 per cent of micro firms (with less than 5 employees) and 93.2 per cent of small firms (5–19 employees) were informal509
MSMEs started facing revenue losses in the initial months of the pandemic, with 52 per cent of surveyed MSMEs having faced revenue losses of up to 50 per cent in May 2020; these losses were driven primarily by drops in domestic demand, temporary shutdowns, and disruptions in operations. MSMEs’ revenue dropped significantly in March, and declined further in April, as a larger number of MSMEs reported no sales due to temporary lockdowns than in March. In May, an ILO survey of 571 Indonesian enterprises (80 per cent of which had <50 employees, and 10 per cent of which had 50-250 employees) revealed that over 25 per cent of surveyed enterprises had suffered losses of more than half of their revenue, while ~52 per cent of enterprises had experienced a drop in revenue by up to 50 per cent.510 Another survey by the ADB in April-May 2020 surfaced likely drivers of such revenue loss: disrupted domestic demand was reported by micro (28 per cent of surveyed enterprises), small (40 per cent), and medium (44 per cent) enterprises, across services (27 per cent), manufacturing (46 per cent), and agriculture (43 per cent); temporary closures were more commonly reported by micro (48 per cent) and small (54 per cent) enterprises than medium enterprises (31 per cent); disrupted production and supply chains were primarily reported by medium enterprises (38 per cent) and by enterprises in manufacturing (40 per cent) and agriculture (36 per cent) sectors.511 (Figure 50)
509 Rothenberg, et al., Rethinking Indonesia’s Informal Sector, 2015 510 ILO, Key findings of the ILO SCORE Indonesia COVID-19 enterprise survey, May 2020 511 ADB, Asia Small And Medium-sized Enterprise Monitor, Nov 2020
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Figure 50: Business Conditions of MSMEs in Indonesia Percentage of respondents based on survey conducted in April-May 2020
Early evidence suggests that MSMEs undertook layoffs in response to economic distress, which could have led to loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and healthcare for children were limited to the early months of the pandemic, while reports of MSMEs diversifying to digital sales channels began to emerge as the pandemic progressed.
While exact figures are still unavailable, up to 6.4 million people across Indonesia may have lost their jobs as of June 2020 • Challenges faced by MSMEs affected employment, with temporary layoffs and wage payment suspensions being more commonly reported in micro and small enterprises512 • The Ministry of Manpower reports, as of 27 May 2020, among formal workers ~0.4 A: Layoffs and million were laid off and ~1.1 million were furloughed; among informal workers, wage cuts livelihoods of 0.3 million workers were impacted; data of additional 1.3 million workers reported to be impacted was under review513 • By comparison, Indonesian Chamber of Commerce and Industry estimated that by June 2020, 6.4 million workers were either laid-off or furloughed, including 2.1 million in textile, 1.4 million in land transportation, 0.5 million in footwear industry and 0.4 million in hotel industry514
512 ADB, Asia Small And Medium-sized Enterprise Monitor, Nov 2020 513 WFP, COVID-19: Economic and Food Security Implications, 2020 514 Reuters, Indonesia business chamber says 6.4 mln jobs lost so far in pandemic, June 2020
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• It also estimated that most workers were furloughed as businesses could not afford mandatory severance benefits515 It was further projected that rising unemployment might push a total of 8.5 million people into poverty by the end of 2020, with those in informal employment being particularly vulnerable • Significant increase in unemployment threatens to raise poverty levels, with estimates suggesting that between 5.9 to 8.5 million people could be pushed into poverty if economic growth falls to between 2.1 per cent to 1 per cent in 2020516 • Informal workers are more vulnerable to such shocks with estimates suggesting that ~60 per cent of all workers are employed in the informal sector517 • Women are more likely to be employed as informal workers (87.1 per cent working women in informal employment vs. 84.7 per cent working men518), and are thus vulnerable to job losses519 Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints Logistical disruptions to MSMEs and other businesses affected food supply and prices at the height of the lockdowns; limited reports of such disruptions have emerged in the last quarter of 2020, with experts hypothesizing that product and service delivery are well on the way to recovery • During the height of the pandemic, social restriction-induced logistical disruptions to MSMEs engaged in food distribution affected food supply, particularly of perishable commodities such as fruits, vegetables, eggs and dairy, in many regions of the country, particularly the east resulting in shortages of certain food types and increased food prices520 B. Disruption in • Within the food supply chain, shipping was affected; MSMEs and large companies products and providing truck services were also affected due to the quarantine requirements for services drivers521 • Lockdown measures also led to reduced operating times for small sellers in traditional markets, which are suppliers of 70 per cent of groceries in the country; market closures were more commonly reported in DKI Jakarta, Central Java and East Java522 • In April 2020, over 20 provinces faced shortages of specific food items including garlic, sugar, chili, and eggs, while a shortage of rice was reported in seven provinces523 • Such movement delays to food items and resulting food inflation might have reduced children’s access to nutritious food, both physically and through enhanced affordability constraints Boosts in internet usage amongst consumers have started to encourage businesses, including MSMEs, to shift towards digital channels, especially in FMCG sectors like C: Diversification food delivery of sales and • Survey-based evidence shows the increasing uptake of digital channels by both delivery channels consumers and businesses: for example, a survey by Mobile Marketing Association (MMA) showed that during the pandemic, 70 per cent of consumers in Indonesia had
515 Reuters, Indonesia business chamber says 6.4 mln jobs lost so far in pandemic, June 2020 516 UNOCHA, 2020, Indonesia Multi-sectoral Response Plan 517 U.S. Department of Labor, Child Labor and Forced Labor Reports, 2019 518 ILO, Women and men in the informal economy, 2018 519 The Conversation, In Indonesia, the COVID-19 pandemic hurts poor women the most, 2020 520 Rahman, Pandemic disrupts food distribution across country, minister says, 2020 521 Rahman, Pandemic disrupts food distribution across country, minister says, 2020 522 WFP, COVID-19: Economic and Food Security Implications, 2020 523 WFP, COVID-19: Economic and Food Security Implications, 2020
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tried a new digital service524; following that, a survey in April 2020 by MMA and SurveySensum found that up to 79 per cent of local businesses are now focusing on digital channels to reach consumers, during the pandemic525 • According to the survey and other anecdotal evidence, the shift was most apparent in fast-moving consumer good (FMCG) and retail enterprises526; for example, in the food delivery space, traditional markets and small sellers in some regions have also used social media to arrange delivery of food items in cooperation with online transportation services527 • MSMEs have also increasingly adopted digital channels: for example, according to the Coordinating Economic Minister, 301,115 MSMEs had digitalized their businesses between May and June 2020 itself528 • Such diversification provides an alternate route for caregivers to access food and healthcare for their children
Box 7: Trends in CSR funding and priorities in 2020 in Indonesia
• Companies engaged in CSR activities primarily by making cash or in-kind donations for COVID-19 relief response529 o Oil and gas company PTTEP donated masks and PPE for the local community. The companies through Rorotan Free Health Clinic, established in partnership with Yayasan Dompet Dhuafa in 2016, built promotive health services beyond immediate COVID-19 relief o Pertamina, the national energy company, distributed ventilators for state-owned hospitals and vitamins for front line workers. It also renovated COVID-19 referral hospitals by providing medical facilities and equipment costing up to Rp 130 billion (8.8 million) • Companies also supported SMEs during the pandemic through CSR activities530 o PTTEP and Pertamina supported government’s stimulus packages for SMEs o PTTEP and Dompet Dhuafa partnered to provide capital assistance, training, access to fintech tools, and business monitoring to 60 SMEs in North Jakarta o Pertamina also provided business assistance to 1000 SMEs in Riau, North Sumatra, DKI Jakarta, West Java, Banten, East Java, Bali, NTB, and West Kalimantan • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 39.7 million came from the private sector, of which more than 80 per cent was towards economic recovery531
Emerging evidence already shows that child undernutrition might be exacerbated due to these responses, while projections suggest that basic education might suffer due to COVID-19 induced disruptions and poverty; less evidence is available on reductions in access to primary healthcare for children, or exacerbations in workplace exploitation of children due to business responses to COVID-19, but prevailing conditions (such as high dependence on private sector healthcare or past experiences of increase in child labour during economic crises) suggest that these issues might become more pronounced due to COVID-19.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Indonesia, with the impact of disrupted products and services having been limited to the early
524 Eloksari, Companies turn to digital marketing to weather pandemic, 2020 525 Eloksari, Companies turn to digital marketing to weather pandemic, 2020 526 Eloksari, Companies turn to digital marketing to weather pandemic, 2020 527 WFP, COVID-19: Economic and Food Security Implications, 2020 528 Jakarta Post article, October 2020 529 Jakarta Globe, Emerging Stronger from Covid-19 with Flexible CSR Programs, September 2020 530 Jakarta Globe, Emerging Stronger from Covid-19 with Flexible CSR Programs, September 2020 531 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
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Figure 51: MSME actions impacting child rights issues in Indonesia
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Before COVID-19, 31 per cent The economic impact on Caregivers with access to digital platforms children <5 years in Indonesia were undernutrition is further exacerbated have an alternate source of obtaining food, suffering from stunting, which was by disruptions to community-based but those without access may face risks of significantly higher than the regional nutrition programs: programs to further exclusion average of 8.9 per cent for Southeast promote nutritious diets among Asia; 10 per cent of children <5 years children (6-23 months) and school were suffering from wasting, which feeding programs have reported 75- was significantly than the regional 100 per cent coverage reductions. 534 average of 1.6 per cent for Southeast Asia (2018 data)532. Food security challenges arising from lower household incomes can likely worsen the situation. Early evidence suggests that COVID-19 already lead to negative nutritional coping mechanisms in Indonesia in 2020: in a survey of Indonesian households held from May to June 2020, ~78 per cent reported wage cuts, of which 68 per cent reduced HH food consumption to cope with the shock.533 Child Protection Workplace exploitation While COVID-19 specific evidence is scarce, past experience suggests that children might be pushed into labour due to household economic distress: a study that details the effects of the 1997 Asian financial crisis on child labour found that in Indonesia, one in five poor households reported using child labour as a significant coping strategy.535 Online abuse Experts also note rising risks of child online abuse during COVID-19, as abusers seek out alternate sources of income during the pandemic and children spend more time
532 UNICEF SDG dashboard 533 World Bank, How hard are families hit by the COVID-19 crisis?, November 2020 534 UNICEF, Tracking the situation of COVID-19 535 Idris et al, 2020
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online536. Recent news articles have reported examples of increased online abuse of children during COVID-19.537 Education Basic education In the long term, the economic School closures in many provinces affected impact of COVID-19 threatens to ~40 million children, as schools transitioned push children out of school: estimates to distance learning. In the immediate term, suggest an additional 91,000 children many children faced difficulties in accessing could drop out of school remote education as ~66 per cent of the 538 permanently . extreme poor do not have internet subscriptions539. Although, online education presents challenges for even those having access to internet. A UNICEF study found that many adolescents, especially girls, felt they lacked digital skills for online education540. Primary Healthcare Vaccination Income loss could reduce access to Before COVID-19, 15 per cent and 12 per cent of target age children were not covered by DPT3 (<7 years age) and MCV1 (<5 years age) vaccines respectively, which were higher than the regional averages of 11 per cent for both vaccines (2019 data). 541 Income loss could reduce access to vaccination by increasing indirect and opportunity cost burdens of getting vaccines: vaccination rates in the country have historically been seen to be directly related to household income level.542 Endemic communicable Indonesia’s Health Ministry records disease treatment show that the number of HIV/AIDS cases in children has been increasing significantly since 2010. Income loss due to COVID-19 might reduce access to HIV care, since 51 per cent of primary healthcare (2019 data) is provided by the private sector543 which is usually expensive; indirect costs, which were estimated to comprise 40 per cent of the cost of HIV treatment, could become unaffordable544 Maternal and newborn Income loss due to COVID-19 might healthcare reduce access to care, as 51 per cent
536 Dalberg interviews 537 Hindustan Times, Online child sex abuse witnesses a spike worldwide amid Covid-19 pandemic, December 2020 538 World Bank, COVID-19 and learning inequities in Indonesia, 2020 539 UNOCHA, Indonesia Multi-sectoral Response Plan, 2020 540 UNICEF Indonesia, “Skills for the Future’, 2017 541 UNICEF SDG dashboard 542 WHO, 2009 543 World Bank, 2019 544 Siregar et al., Costs of HIV/AIDS treatment in Indonesia, 2015
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of overall healthcare (2019 data)545 and 65 per cent of institutional deliveries (2014 data) are provided by the private sector546; opportunity cost burdens, a leading reason for mothers not having accessed maternal care in Indonesia in the past547, might also rise.
In response to the immediate economic impacts of COVID-19, the government of Indonesia rolled out several economic relief measures; direct cash and in-kind transfers constituted the majority of these measures, with some efforts to provide fiscal stimuli to the economy (e.g., through interest rate reductions), provide credit to MSMEs, and scale up programmes to re-skill and provide work to unemployed persons.
However, limited dedicated action was taken to safeguard informal workers, especially in sectors where they are concentrated (agriculture, transportation, manufacturing), and explicitly protect child rights through government measures. Gaps remain in government efforts to expand and strengthen fundamental social insurance mechanisms for informal workers, who are often not covered by such programmes; significant opportunities still exist to provide targeted support to informal workers in sectors like agriculture, transportation, and manufacturing, which together account for a large proportion of informal employment in the country. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave and breastfeeding breaks) which can support caregivers with their childcare duties during COVID-19; informal workers in particular remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19. Similarly, opportunities exist for enhanced government regulations to monitor and curb the risks of increased online child sexual exploitation by businesses during COVID-19.
The government implemented several social assistance programmes to provide immediate economic relief to workers impacted by COVID-19. Cash and in-kind transfer programmes were expanded, and some utility subsidies were disbursed to provide immediate economic relief to citizens affected by the pandemic. Compensatory payments were also made to workers who had been laid off during the pandemic. However, there was limited dedicated focus on reaching workers in the informal sector through such measures:548
• To combat the economic impacts of COVID-19 through social assistance, the Government of Indonesia allocated an additional state budget of IDR 110 trillion (USD 5.5. billion), which was utilized to expand conditional cash transfer and staple food programs • Targeted social assistance was provided to those who were laid off due to the outbreak; the Implementing Agency for Social Security for Workers provided a cash compensation summing up to IDR 1 million per month, up to three months, for laid off workers • Further, electricity bill discounts were provided for three months to ease pressures on consumers
545 World Bank, 2019 546 Pomeroy, et al., Who gives birth in private facilities in Asia?, 2014 547 ADB, Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity, 2012 548 IMF, Country Policy Responses, December 2020
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In addition, some macroeconomic fiscal measures were implemented to help stimulate economic activity and inject liquidity into the country’s financial system. Rate reductions and tax deferrals were employed to help stimulate the economy. The Bank of Indonesia lowered the nation’s policy rate by 25 basis points in February 2020. The corporate income tax was reduced from 25 per cent to 22 per cent, while import tax payments were deferred by 6 months in 19 manufacturing sectors,
Some measures were also undertaken to provide relief to MSMEs, in particular by increasing credit and fund availability for MSMEs. The IDR 150 trillion National Economic Recovery Plan contained provisions for financing small and medium sized enterprises. Additionally, debt payments were delayed by six months for micro loan credit for businesses affected by COVID-19.
Significant efforts were also made to support the reskilling and reemployment of laid-off workers, by ramping up state training programs and cash-for-work schemes. Budget allocation for the Pre-Employment Program (Kartu Pra Kerja), which entitles cardholders to skills training and allowances, was doubled to IDR 20 trillion, with the objective of aiding the skill development and re- employment of workers laid off due to COVID-19. The scheme intends to help 5.6 million laid-off workers and informal workers among others. The Ministry of Village, Development of Disadvantaged Regions and Transmigration requested all village authorities to revise their village budgets to prioritise village-based Employment Intensive Cash for Work schemes (PTKD). The programme targets marginalised groups in the village such as deprived families, unemployed persons, daily wage labourers.
With financial recovery assuming top priority for most MSMEs, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Indonesia. There have been reports of large businesses and MSMEs, such as those in the food delivery and healthcare sectors, adopting alternate service delivery channels like digital platforms. While such measures do contribute to sustained distribution of goods and services for children, there have been few reports MSMEs engaging in fundamental child rights protection measures.
Hence, there remain high-potential opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection, with special focus on the identified high-risk child rights issue areas.
Table 14: List of potential interventions for UNICEF Indonesia
Support strengthening and expansion of social protection systems through evidence building and advocacy Advocate for strengthening of social insurance programmes for workers and self-employed persons in informal sector Rationale: State social insurance schemes currently do not Relevance: cover informal workers; while some COVID-19 policy responses - All sectors do aim to reskill informal workers for reintegration into the Potential partners: workforce, the lack of fundamental social insurance for - Government of Indonesia informal workers, combined with the high likelihood of such workers losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these informal workers.
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Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the sectors Target sectors: most affected by the pandemic, child rights considerations - All sectors have been missing from the survival and recovery measures Business focus areas: being adopted by MSMEs. UNICEF could work with MSMEs and - Business as provider of goods and services; other actors to develop guidance and tools (e.g., due diligence Business as employer; Business impact on guidance on policy commitments and codes of practice for communities and the environment: MSMEs child rights, child safeguarding toolkit for MSMEs, child rights must take deliberate actions to not harm impact assessments, reporting for MSMEs) for different sectors the rights of children of their workers, in to understand the impact of their business decisions and the marketplace and in the broader operations on children and recover in a way that does not communities harm child rights. Potential ecosystem partners: - NGOs and foundations - Industry associations Generate evidence on the rise of child online abuse during COVID-19 and advocate for regulations to curb such activities Rationale: Anecdotal evidence suggests an increase in child Relevance: online sexual exploitation during COVID-19, but more - All sectors comprehensive evidence building can facilitate targeted Potential partners: measures to mitigate the trend. - Government of Indonesia - Indonesia Cyber Crime Directorate - Development agencies like End Child Prostitution and Trafficking Indonesia Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses
Advocate for stronger family friendly workplace policies which enable caregivers to meet the nutritional and healthcare needs of children, such as breastfeeding support and paid maternal leave, with special focus on informal enterprises across sectors Rationale: While the law mandates 12 weeks of fully paid Relevance: maternal leave, this policy covers only 10-32 per cent of all - All sectors employed women in the country; it is likely that women in Potential partners: informal work remain uncovered by these policies due to the - Ministry of Labour temporary and unprotected nature of their employment; moreover, only unpaid breastfeeding breaks are mandated by policy and there are no policies mandating time off for pregnant employees to obtain prenatal medical examinations. As COVID-19 threatens to exacerbate child undernutrition and possibly reduce access to primary healthcare for children, it is crucial to encourage and support breastfeeding through such policies, as a key lever to promote adequate early childhood nutrition; moreover, policies mandating paid breaks for caregivers can also enable employees to meet the healthcare needs of mothers and children, which possibly stand at risk due to COVID-19. Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt Relevance: family-friendly policies such as healthcare benefits, childcare, - All sectors
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on-site child-care centre through tax breaks or subsidies. These Potential partners: measures could be implemented as part of the COVID-19 relief - Government of Indonesia stimulus packages. Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Partner with other UN agencies to advocate for targeted support for informal enterprises in the transportation and manufacturing sectors, and generate evidence on the need for enhanced support to informal enterprises and workers in agriculture Rationale: Transportation and manufacturing, which have Relevance: Agriculture and transportation been severely impacted by the pandemic, employ 22 per cent sectors and 7 per cent respectively of all informal workers in the Potential partners: country; while agriculture has been less severely impacted, it - Government of Indonesia employs the largest proportion (45 per cent) of informal - Ministry of Agriculture workers, who often lack social insurance. Since informal - Ministry of Transportation workers are at high risk of losing their incomes due to COVID- - UNDP, ILO 19, the absence of targeted assistance for sectors where informal workers are concentrated might lead to significant livelihood losses among informal workers, thereby reducing access to nutrition, healthcare, and education for their children. Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene tech industry stakeholders to encourage use of digital for safeguarding and promoting children well-being Rationale: COVID-19 has accelerated use of digital delivery for Relevance: nutritious food, healthcare, education. However, children’s - ICT or e-commerce sectors considerations, particularly of those from vulnerable groups, Potential partners: are often not taken into account in designing digital products. - UNDP - Technology players such as Facebook, Google, Amazon Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Identify and facilitate coordination among relevant private sector actors who can help expand digital connectivity and build digital skills beyond regions of current concentration (e.g., Sumatra, Balo, Papua, etc.), in order to expand access to remote learning and digital healthcare Rationale: While a significant 74 per cent of the population Relevance: has access to internet connections, connectivity is highly - ICT sector concentrated in regions like Sumatra, Sulawesi, Kalimantan, Bali Potential partners: and Nusa Tenggara, Maluku and Papua; moreover, internet - Ministry of Communication and speeds in the country are poor, with Indonesia ranking 117th Information Technology out of 139 countries on the mobile internet speed index, and - Telecommunications companies 115th out of 176 countries on the fixed broadband speed - Internet service providers category as per the Speedtest Global Index of November 2020. - Edtech companies Additionally, adolescents, especially girls, reported lacking - Telehealth platforms like Halodoc digital skills. These shortfalls can severely limit access to and use of remote learning and digital healthcare for children, as COVID-19 has disrupted traditional in-person education and healthcare delivery.
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8.8 The Philippines
The Philippines implemented moderately stringent government measures in response to COVID- 19 and saw a rapid growth in case load since August 2020; as of November 2020, the country had the highest case load in Southeast Asia. COVID-19 hit the Philippines in early March, triggering stringent government measures which initially succeeded in containing spread. The government implemented a complete national lockdown from 22 March to 24 May, re-opened of borders in early June, and progressively eased restrictions, with most containment restrictions removed by end-August. However, General Community Quarantine (GCQ) was re-implemented in several regions as case growth increased rapidly in August, with GCQ having been mandated in several regions, including Metro Manila, until the end of 2020 (Figure 52)549.
Figure 52: COVID-19 cases & stringency of measures in the Philippines
500 120
100 400
80 300 60 200 40
100 IndexStringency
20 Confirmed Cases (1000s) Cases Confirmed 0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases (1000s) Stringency Index
As a result of the outbreak and resulting government restrictions, the economy has been severely impacted, with a projected GDP contraction of 8.3 per cent in 2020. While the economic projections are still evolving, the latest projections from the IMF estimate that the GDP growth would slow down to -8.3 per cent in 2020, with recovery expected in 2021. (Figure 53).
Figure 53: GDP, constant prices, per cent change in the Philippines550
10% 6.4% 6.0% 5% 7.4% 6.5% 6.5% 6.5%
0% 2019 2020 2021 2022 2023 2024 2025 -5%
-10% -8.3% IMF - Oct 2020 IMF - Oct 2019
549 Oxford COVID-19 Government Response Tracker 550 IMF, World Economic Outlook, October 2020
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COVID-19 related restrictions also resulted in the disruption of healthcare and nutrition services for mothers and children, as reported in the third quarter of 2020551; while reports of reduction in child protection services did not emerge, the incidence of home-based abuse of children saw spikes in April 2020.
• Healthcare services: Mathematical models indicate that large service disruptions in the Philippines have the potential to leave 1.7 million children without oral antibiotics for pneumonia, 1.8 million without DPT vaccinations, 421,500 women without access to facility- based deliveries, and 3.1 million fewer women receiving family planning services, as of July 2020552 • Nutrition services: The continuity of both community-based and facility-based nutrition interventions were disrupted due to quarantine restrictions, as of August 2020, which can result in the deterioration of the nutritional status of children and pregnant/lactating women. As early as March, reports of widespread donations of powdered infant formula from private individuals and institutions have started to discourage mothers to continue breastfeeding553 • Child protection services: While there haven’t been reports of reduction in child protection services, the incidence of home-based abused of children has increased - 42 per cent of surveyed parents/caregivers reported use of physical or psychological punishment during COVID-19 as of April 2020554
While some sectors (tourism, aviation and transportation) in the country witnessed significant and sustained negative economic impact, construction started to show signs of recovery in 2020 and agriculture was impacted to a relatively smaller degree; some sectors (healthcare, e- commerce) also emerged as opportunity areas due to COVID-19 induced demand. Tourism, aviation, and transportation have been severely impacted, with most evidence suggesting that recovery in these sectors is likely to be slow. The construction industry has been severely impacted and is expected to recover strongly in 2021. The agriculture sector, with support from the government, has not been as severely impacted as was initially expected. Moreover, signs of strong growth have been noted in the pharmaceuticals and e-commerce industries. Figure 54 presents a high-level assessment of some of the key sectors in the country.
Figure 54: Sectoral impact of COVID-19 in the Philippines
Key: Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment
551 Note: While these assessments do not reflect disruptions in the first half of 2020, they provide the closest available indication of disruptions after relative relaxation of restrictions 552 Global Financing Facility, PRESERVE ESSENTIAL HEALTH SERVICES DURING THE COVID-19 PANDEMIC, 2020 553 UNOCHA, COVID-19 HUMANITARIAN RESPONSE PLAN, August, 2020 554 World Vision, Impact of COVID-19 to Children and Their Families, April 2020
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Tourism • The sector was hit hard by COVID-19 in the initial months of the pandemic, with international tourist footfall having declined by 22 per cent in the first quarter of 2020555 • MSMEs were hit hard by these losses: in a survey of 247 tourism enterprises (of which 91 per cent were MSMEs) conducted in May 2020, 88 per cent of the respondents reported expected losses of >50 per cent of their 2020 revenues, while 79 per cent expected tourist arrivals to decline by >50 per cent in 2020556 • The impact on the sector is expected to be prolonged: over the whole of 2020, the sector was projected to sustain a loss of USD 2.3 billion (32 per cent of 2019 revenue) in the worst case557 • Decline in tourism is also likely to impact MSMEs in several dependent sectors, such as local handicraft producers, street vendors, roadside food stalls, etc. • While domestic tourism and digital tourism558 are being ramped up to revive the sector, there are few emerging reports of recovery: in the same tourism enterprise survey in May 2020, 42 per cent of surveyed tourism enterprises expected their businesses to take 6-12 months to normalize, while 21 per cent expected to take >12 months559 Aviation and • Movement restrictions have had a severe impact on the Philippine aviation sector, transportatio with its largest airline carrier – Cebu Pacific - having laid off 25 per cent of its n employees by July 2020560 • The impacts on the sector have been sustained, with Philippine Airlines running less than 15 per cent of its normal number of daily flights as of November 2020, even eight months after the Philippine government imposed travel curbs; the carrier also announced retrenchment of 35 per cent of its employees in November 2020 owing to continued financial distress561 • These reductions in air transport are likely to have a negative downstream effect on related jobs such as contracted meal suppliers, local airport transport providers, etc., • Road transportation has also suffered severe losses due to the enhanced community quarantine imposed by the government, with a reported 14,000 bus workers having lost their jobs by July 2020 itself; with community quarantine extended till the end of 2020, the sector is expected to suffer continued losses, with adverse implications on domestic MSME transportation operators in the sector562 Construction • The Philippines construction industry, which was the fastest growing in the Asia Pacific (APAC) region prior to the COVID-19 outbreak, sustained initial shocks due to lockdowns and re-allocation of government budgets away from infrastructure projects; as of August 2020, the sector was projected to post a contraction of 9.2 per cent in 2020563 • However, construction work resumed since mid-May 2020, with the government expecting the resumption of infrastructure projects to be a key driver in reviving the economy; MSMEs, playing the role of small and mid-sized contractors in the sector, are likely to benefit from these projects
555 PWC, Impact of COVID-19 on the Philippine Tourism industry, July 2020 556 PWC, Impact of COVID-19 on the Philippine Tourism industry, July 2020 557 ADB, The Economic Impact of the COVID-19 Outbreak on Developing Asia, March 2020 558 World Financial Review, Rebooting Philippine Tourism from the COVID-19 Pandemic, October 2020 559 PWC, Impact of COVID-19 on the Philippine Tourism industry, July 2020 560 Ch-aviation, Cebu Pacific Air lays off 800, 25 per cent of workforce by mid-3Q20, August 2020 561 Deccan Herald, Philippine Airlines to cut up to 2,700 jobs due to Covid-19 pandemic impact, October 2020 562 CNN, Around 14,000 provincial bus workers lost jobs due to pandemic, June 2020 563 GII Market Research report, August 2020
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• The sector is expected to bounce back strongly in 2021 with an expected annual average growth rate of 8.3 per cent during 2021 – 2024564 Agriculture • The sector was moderately impacted by COVID-19 in the initial months of the pandemic, as mobility restrictions reduced availability of farm labour for MSMEs in the sector and contracted the agricultural labour force (ALF); this reduction in ALF was expected to have reduced agricultural production by ~3 per cent in the first quarter of 2020565 • However, government support packages have led to the gradual recovery of the sector, which added 2.1 million jobs to the economy between April and July 2020 and contributed to a reduction in the country’s unemployment rate566 • The sector even saw a positive growth of 0.5 per cent during the same period, which was only marginally less than the 2019 average of 0.7 per cent567 Pharmaceutic • While growth in the sector has not yet been tangibly observed, it is expected that als and COVID-19 will provide momentum to the Philippine pharmaceuticals sector, which healthcare was already growing due to increased demand stemming from aging populations and lifestyle shifts • As regional supply chains gain prominence in light of COVID-19, it is expected that the Philippines will emerge as a key hub for manufacture of pharmaceuticals in the Southeast Asia region568 • Moreover, the government of India has urged Indian pharmaceutical companies to establish manufacturing units in the Philippines to meet rising regional demand due to COVID-19, which will likely have trickle-down impacts on other players and MSMEs in sector’s supply chain in the Philippines, such as local raw material and equipment suppliers, technicians, and infrastructure providers569 • Other factors, such as an increase in demand for generic drugs due to government mandates for provision of such drugs in public hospitals, are likely to contribute the growth of the pharmaceuticals sector • The digital healthcare sector has also seen rapid growth due to COVID-19: telehealth consultations in the Philippines increased to 201 per cent higher than pre-COVID-19 levels during the lockdown, and remained 190 per cent higher even after the lockdown, as of August 2020570 E-commerce • The e-commerce industry has grown considerably due to COVID-19, with the sector’s top players seeing increases of more than 2 to 3 million visits a month on apps and websites as of October 2020 • The Philippines experienced the highest increase in the usage of shopping apps (53 per cent) in Southeast Asia, with the total sessions in shopping apps in the country reached 4.9 billion, as of October 2020 • Large e-commerce platforms like Lazada have also integrated small businesses and farmers into their platforms, enabling them to access online consumer bases which they earlier were unable to reach571
564 GII Market Research report, August 2020 565 Gregorio and Ancog, Assessing the Impact of the COVID-19 Pandemic on Agricultural Production in Southeast Asia, 2020 566 ADB, Philippine Economy to Decline Further in 2020 Amid COVID-19, With Recovery in 2021, September 2020 567 Philippine Statistical Authority, August 2020 568 CPHi, ASEAN Pharma outlook, November 2020 569 Business Mirror, India pharma firms told: Take closer look on growing PHL, Asean market, August 2020 570 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 571 Inside Retail, Online marketplaces thriving in the Philippines since Covid-19 crisis, October 2020
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Significant negative impact, and expected slow recovery; Significant negative impact, but expected rapid recovery (by end of year); Moderate negative impact; Positive impact
MSMEs, which account for 63 per cent of all employment in the Philippines, were hit hard by the pandemic, with 77 per cent having experienced a 76 per cent - 82 per cent decline in sales volumes as of May 2020. MSMEs account for 99.5 per cent of business establishments in the Philippines, 63 per cent of employment, and ~40 per cent of the country’s GDP.572 Moreover, a large proportion of MSME employment is likely informal: according to the ILO, the informal economy in the Philippines (which employs 63 per cent of the total workforce) comprises predominantly of independent, self-employed small-scale producers and distributors of goods and services.573
In a survey of 2295 MSMEs conducted from 28 April to 15 May 2020, 67 per cent of MSMEs reported being ‘temporarily closed’ due to quarantine measures; another 28 per cent reported being ‘open but with limited operations’, of which 78 per cent were at <50 per cent capacity (Figure 55). In the same survey, 77 per cent of MSMEs reported sales declines due to COVID-19: the average extent of decline was 81.5 per cent for micro enterprises, 82 per cent for small enterprises, and 76.4 per cent for medium enterprise. Moreover, 34 per cent of MSMEs had run out of cash and savings, 37 per cent expected to run out in 1-3 months, and 17 per cent expected to run out in 3-6 months. Additionally, 30 per cent of MSMEs expected their firms to need >3 months after quarantine to recover, while 52 per cent were unsure of recovery timeline.574
Figure 55: Business conditions for MSMEs in the Figure 56: Capacity of operations in the Philippines Philippines Percentage of respondents during survey in April – May Percentage of respondents during survey in April-May 2020 2020 (n=651) (n=2,995)
Early evidence suggests that MSMEs undertook layoffs in response to economic distress, which could have led to loss of income for caregivers and a consequent rise in child poverty; disruptions
572 UNDP, MSME Value Chain Rapid Response Survey, May 2020 573 ILO webpage 574 ADB, Philippine Enterprise Survey on COVID-19 Impact, May 2020
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Economic downturn limited business’ ability to pay and retain workers; women were especially at risk given the extent of their employment in severely impacted sectors like tourism and in informal work • By April 2020, layoffs had led to 5 million job losses, pushing the unemployment rate up to 17.7 per cent575 • Additionally, wage halts/cuts were prevalent: in a survey conducted in May 2020, 63 per cent of MSMEs reported temporary suspensions of employee payments, while another 17 per cent reported wage cuts of >50 per cent576 • Informal workers, comprising 56 per cent of all workers, were at greater risk due to lack of social insurances; in particular, the 6.6 million female informal workers in the A: Layoffs and Philippines have generally lower earning capacity, savings, & safety nets577 wage cuts • Of all informal workers, 40 per cent are ‘salaried workers in precarious employment’ and hence were most vulnerable578 • In tourism, 43 per cent of MSMEs surveyed in May 2020 reported reducing employee headcount to cut costs, while 27 per cent reported permanently laying off staff579 • Loss of livelihood and tourism likely had a significant impact on the large number of women in the sector (54 per cent of employment in the sector is female) Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints In the early months of the pandemic, restrictions on MSMEs and other businesses engaged in food distribution contributed to delays in food supply, while disrupted transport reduced access to maternal healthcare; limited reports of such disruptions have emerged in the last quarter of 2020, with experts hypothesizing that product and service delivery are well on the way to recovery • Lockdowns and travel restrictions on logistics companies, including MSMEs, in the early months of the pandemic affected transport of produce from farms to markets, B. Disruption in impacting deliveries of vegetables and other produce to several urban areas580 products and • The Philippines depends on rice imports from Thailand and Vietnam (which services accounted for 56 per cent and 27 per cent of rice imports respectively in 2018); this could have compounded the implications of disrupted food distribution channels and MSMEs, as the distribution of imported food might have faced delays581 • Such movement delays to food items might have reduced the availability of nutritious food for children • While disruptions in food supply typically cause food inflation, food prices did not increase by much in the initial months of the pandemic, largely due to a price freeze
575 UNDP, MSME Value Chain Rapid Response Survey, May 2020 576 ADB, Philippine Enterprise Survey on COVID-19 Impact, May 2020 577 CESO, Socioeconomic impacts of COVID-19 , September 2020 578 ILO, Size of the Informal Economy in the Philippines, 2017 579 PWC, Impact of COVID-19 on the Philippine Tourism industry, July 2020 580 CESO, Socioeconomic impacts of COVID-19 , September 2020; (10) UNFPA study, 2020 581 ADB, Food Security in Asia and the Pacific amid the COVID-19 Pandemic June 2020
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policy enacted by the Philippine government582; from Dec ’19 to March ’20, the overall domestic food price index has only increased by 1 per cent583 • Disruptions to transportation MSMEs also reduced the ability of pregnant mothers to access antenatal care and safe childbirth, as of August 2020584 COVID-19 has shifted consumer preferences and prompted some ecosystem support in favour of SMEs adopting digital channels, especially in the healthcare delivery space, but national trends in uptake by SMEs have not been established • Consumer preferences are shifting towards digital healthcare services; e.g., telehealth consultations in the Philippines increased to 201 per cent higher than C: Diversification pre-COVID-19 levels during the lockdown, and remained 190 per cent higher of sales and even after the lockdown, as of August 2020585 delivery • There are also signs of this digital shift being facilitated by improvements in the channels digital payments ecosystem: for example, in light of COVID-19, PayMaya, a mobile money startup with nearly 80,000 merchant accounts, launched a service that gives MSMEs an easy way to accept payments from buyers via smartphones586 • Such diversification provides an alternate route for caregivers to access food and healthcare for their children
Box 8: Trends in CSR funding and priorities in 2020 in the Philippines
• Companies engaged in CSR activities primarily by making cash or in-kind donations for COVID-19 relief response or re-organising their operations to support587 o San Miguel Corp and Lucio Tan Group converted outputs to manufacture 70 per cent ethyl alcohol o SM, Metrobank, Aboitiz, Ayala, DoubleDragon and PLDT groups donated medical equipment, PPE, food supplies to government bodies and hospitals • The total value of CSR contributions by local firms during the pandemic is estimated to have reached at least P20 billion (USD 416 million)588 • In December 2020, more than 30 companies in the country announced a joint initiative to procure at least 2.6 million doses of the COVID-19 vaccine for P700 million (USD 14.5 million)589 • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 81.5 million came from the private sector, primarily focusing on support for the health system, economic recovery, emergency response and support for vulnerable populations590
Emerging evidence already shows that child undernutrition and access to basic and vocational education might have been negatively impacted due to these business responses.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in the Philippines, with the impact of disrupted products and services having been limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
582 Gregorio and Ancog, Assessing the Impact of the COVID-19 Pandemic on Agricultural Production in Southeast Asia, 2020 583 FAO, Impacts of coronavirus on food security and nutrition in Asia and the Pacific, June 2020 584 UNFPA study, 2020 585 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 586 APEC Policy Support Unit, Supporting MSMEs’ Digitalization Amid COVID-19, July 2020 587 Inquirer, Philippines Inc.’s CSR efforts help country survive and, hopefully, end pandemic, December 2020 588 Inquirer, Philippines Inc.’s CSR efforts help country survive and, hopefully, end pandemic, December 2020 589 Inquirer, Philippines Inc.’s CSR efforts help country survive and, hopefully, end pandemic, December 2020 590 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
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Figure 57: MSME actions impacting child rights issues in the Philippines
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels
Nutrition Undernutrition / Before COVID-19, 33 per cent Initial supply chain disruptions and Caregivers with access to digital platforms children <5 years in the Philippines food unavailability might have have an alternate source of obtaining food, were suffering from stunting, which impacted nutritional intake in the but those without access may face risks of was significantly higher than the early months further exclusion regional average of 8.9 per cent for Southeast Asia.591 Prolonged food security challenges arising from lower household incomes can further exacerbate the situation. Recent evidence suggests that COVID-19 has already impacted nutrition in the Philippines in 2020. In a survey of 3,144 households in the Philippines held in May 2020, 33 per cent of households had to skip at least one meal in a week; about 10 per cent had to skip two or more meals in a week; moreover, a higher share of households with lower baseline incomes, engaged in temporary/ informal work, or facing income declines were seen to skip meals. In the same survey, 31 per cent of households reported relying on cheaper food, and 12 per cent reported reducing the quantity of meals.592 Education Basic education Rising COVID-19 cases resulted in the 2020/21 academic year starting via distance learning, affecting ~25 million students in the Philippines.593 However, national enrollment dipped by 9 per cent as of November 2020, with ~2.3 million children having dropped due to household economic distress and the inability to access remote learning.594 Vocational Education Evidence suggests that business and Training disruptions have impacted TVET education with ~75 per cent of apprenticeships and internships being completely disrupted, with majority of surveyed companies discontinuing apprentice wages/stipends.595
591 UNICEF SDG dashboard 592 UNDP Philippines Pulse Survey, May 2020 593 CNA, Remote learning begins at schools in coronavirus-hit Philippines, 2020 594 Nortajuddin, More School Dropouts In A Pandemic?, 2020 595 OECD, The Impact Of Covid-19 On Education, 2020
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In response to the immediate economic impacts of COVID-19, the government of the Philippines rolled out several economic relief measures; direct cash transfers and subsidies constituted the majority of these measures, with some efforts to provide fiscal stimuli to the economy (e.g., through interest rate reductions), provide credit to MSMEs, and aid the targeted recovery of major sectors like infrastructure, tourism, and agriculture.
However, limited dedicated action was taken to safeguard informal and female workers, especially in sectors where they are concentrated (tourism, agriculture), and explicitly protect child rights through government measures. Gaps remain in government efforts to expand and strengthen fundamental social insurance mechanisms for informal workers, who are often not covered by such programmes; while sectors like tourism and agriculture did receive significant government stimulus packages, dedicated support to the large proportions of vulnerable informal and female workers in these sectors was not noted. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers in particular remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19. Similarly, opportunities exist for enhanced government regulations to monitor and curb the risks of increased online child sexual exploitation by tourism businesses during COVID-19.
The government implemented several social assistance programmes to provide immediate economic relief to workers impacted by COVID-19. The government disbursed direct cash transfer and relief programs to directly provide financial assistance to workers impacted by layoffs or job losses, as well as aid low-income segments. While several measures were directed at enterprises, workers, and overseas citizens, there was limited dedicated focus on protecting informal workers: • The Department of Labour and Employment (DOLE) implemented the COVID-19 Adjustment Measures Program (CAMP), a one-time cash assistance of PHP5,000 (US$97.6) per worker that was provided to workers in private establishments where flexible working arrangements were introduced. • DOLE also provided assistance to overseas Filipino workers through its AKAP programme which provides P10,000 or $200 cash assistance per worker. • The Social Security System (SSS) mobilized PHP 1.2 billion (US$23.5 million) to cover unemployment benefits for displaced workers, providing unemployment insurance benefits for a projected 30,000 to 60,000 workers who will lose their jobs as a result of possible layoffs. • The Government provided an emergency subsidy to ~18 million low income households amounting to a minimum of PHP 5,000 to a maximum of PHP 8,000 a month for 2 months • The government’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers (TUPAD) programme intended to reach nearly 1 million informal workers by June 2020 through emergency employment provision • Wage subsidies were provided to enterprises at risk of closure, with the subsidy ranging from Php 5,000 to Php 8,000 per worker
In addition, macroeconomic fiscal measures were implemented by the country’s central bank to help stimulate the economy: The Bangko Sentral ng Pilipinas (BSP) announced purchase of PHP 300 billion worth government securities (about 1.6 per cent of 2019 GDP) to support the government’s
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Some measures were also taken to provide relief to MSMEs in particular, largely by increasing credit availability and flexibility for MSMEs. As part of a PHP 27.1 billion fiscal package rolled out by the government, financial assistance was provided to affected SMEs through specialized microfinancing loans and loan restructuring. To support micro and small businesses affected COVID-19, the Department of Trade and Industry (DTI) also set up a PHP 1 billion Enterprise Rehabilitation Financing facility. The loan fund is open to micro and small enterprises with at least one year continuous operation prior to March 2020, and whose businesses suffered drastic reduction in sales.
Specific sectors like infrastructure, tourism, and agriculture received dedicated support through government assistance programs. • Infrastructure: o Legislative bills have been filed in Congress to finance infrastructure projects to create jobs, particularly in the rural countryside. • Tourism: o Support to the tourism industry was prioritized as part of a PHP 27.1 billion fiscal package rolled out by the government • Agriculture: o Support to the agriculture sector was prioritized as part of a PHP 27.1 billion fiscal package rolled out by the government o The Department of Agriculture (DA) approved an initial PHP1-billion loan assistance to marginal farmers and fisherfolk, as well as agri-fishery micro and small enterprises (MSEs) to increase farm productivity and ensure food sufficiency during the COVID-19 emergency situation.
With financial recovery assuming top priority for most MSMEs, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in the Philippines. There have been reports of businesses, such as those in the food delivery and healthcare sectors, adopting alternate service delivery channels like digital platforms, with some emerging reports indicating that MSMEs too are adopting digital channels. While such measures do contribute to sustained distribution of goods and services for children, there have been few reports MSMEs engaging in fundamental child rights protection measures.
Hence, there remain high-potential opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection, with special focus on the identified high-risk child rights issue areas.
Table 15: List of potential interventions for UNICEF Philippines
Support strengthening and expansion of social protection systems through evidence building and advocacy
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Advocate for strengthening of social assistance and insurance programmes for workers in informal sector Rationale: State social assistance and insurance schemes are Relevance: currently not structured along employment status or income slabs, - All sectors putting informal workers with already unsteady income streams at Potential partners: high risk during times of economic instability; moreover, most - Government of Philippines COVID-19 policy responses do not specifically target informal workers. The absence of adequate social insurance for informal workers, combined with the high likelihood of such workers losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these informal workers. Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the sectors most Target sectors: affected by the pandemic, child rights considerations have been - All sectors missing from the survival and recovery measures being adopted by Business focus areas: MSMEs. UNICEF could work with MSMEs and other actors to develop - Business as provider of goods and guidance and tools (e.g., due diligence services; Business as employer; guidance on policy commitments and codes of practice for child Business impact on communities rights, child safeguarding toolkit for MSMEs, child rights impact and the environment: MSMEs assessments, reporting for MSMEs) for different sectors to must take deliberate actions to understand the impact of their business decisions and operations on not harm the rights of children of children and recover in a way that does not harm child rights. their workers, in the marketplace and in the broader communities Potential ecosystem partners: - NGOs and foundations - Industry associations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for stronger and wider implementation of maternal leave policies across sectors, with special focus on informal enterprises Rationale: While the law mandates 9 weeks of fully paid maternal Relevance: leave, this policy covers only 33-65 per cent of all employed women - All sectors in the country; it is likely that women in informal work remain Potential partners: uncovered by these policies due to the temporary and unprotected - Department of Labour and nature of their employment. As COVID-19 threatens to exacerbate Employment child undernutrition, it is crucial to enact such policies which can enable caregivers to dedicate adequate time and focus to child nutrition (through practices like exclusive breastfeeding) in the critical early childhood years. Advocate for tax or other benefits to encourage MSMEs to adopt family-friendly policies Rationale: Governments could incentivize MSMEs to adopt family- Relevance: friendly policies such as healthcare benefits, childcare, on-site child- - All sectors care centre through tax breaks or subsidies. These measures could be Potential partners: implemented as part of the COVID-19 relief stimulus packages. - Government of Philippines Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented
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Partner with other UN agencies to advocate for continued and scaled-up economic stimulus packages for women-owned and informal enterprises in sectors like tourism and agriculture Rationale: The economic impact of COVID-19 is expected to be Relevance: Agriculture and tourism prolonged in the tourism sector, where 54 per cent of employees are sectors women, who are generally seen to have lower savings and safety nets, Potential partners: especially in informal work; in agriculture, 87 per cent of all workers in - Government of Philippines agriculture are informally employed. Since women-owned enterprises - Department of Tourism and informal workers face outsized income risks due to COVID-19, - Department of Agriculture the absence of targeted assistance for sectors where informal workers - UNDP and women are concentrated might lead to significant livelihood - ILO losses for these informal and female workers, thereby reducing access to nutrition, healthcare, and education for their children. Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Identify and facilitate coordination among relevant private sector actors who can help make improvements in digital connectivity in regions with poor internet speeds (e.g., Visayas, Mindanao) Rationale: The quality of internet and broadband connections is Relevance: highly variable across various regions of the Philippines, severely - ICT or e-commerce sectors impacting access to remote learning and digital healthcare for Potential partners: children in regions with poorer connectivity, as COVID-19 has - Department of ICT disrupted traditional in-person education and healthcare delivery. - Telecommunications companies; Internet service providers - Edtech companies - Telehealth platforms Convene tech industry stakeholders to encourage use of digital for safeguarding and promoting children well-being Rationale: COVID-19 has accelerated use of digital delivery for Relevance: nutritious food, healthcare, education. However, children’s - ICT or e-commerce sectors considerations, particularly of those from vulnerable groups, are often Potential partners: not taken into account in designing digital products. - UNDP - Technology players such as Facebook, Google, Amazon Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Provide technical assistance (through identified third-party experts) and financial support to small businesses to help them implement remote work-based opportunities for youth Rationale: COVID-19 induced business disruptions have led to Relevance: suspensions of apprenticeships, severely hampering access to - All sectors vocational and technical skill building among youth. Potential partners: - Technical Education and Skills Development Authority - MSMEs across sectors
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8.9 Thailand
Thailand implemented strict containment measures during the early onset of the pandemic, successfully slowed down the outbreak by May 2020, and steadily loosened measures thereafter. Thailand report its first confirmed case on Jan 13, 2020. A state of emergency was instituted on March 26, accompanied by stringent lockdown measures, which contributed to a significant slowdown in the spread of the virus starting late May. Restrictions were gradually eased, with the entry of selected foreign visitors reallowed on August 1st 2020, including 100,000 migrant workers from Myanmar, Cambodia, and Laos (Figure 58)596.
Figure 58: COVID-19 cases & Stringency of measures in Thailand597
5000 100
4000 80
3000 60
2000 40 Confirmed Cases Confirmed 1000 20 StringemcyIndex
0 0 15-Mar 15-Apr 15-May 15-Jun 15-Jul 15-Aug 15-Sep 15-Oct 15-Nov
Confirmed cases Stringency Index
The economic impact of COVID-19 is expected to be severe in 2020, with an estimated GDP contraction of -7.6 per cent; a steady recovery is expected in 2021. While the economic projections are still evolving, as of November 2020 the IMF estimated that the GDP growth would slow down to from a formerly projected 3 per cent to -7.1 per cent in 2020, with an expected recovery to 4 per cent GDP growth in 2021 (Figure 59).
However, the Thai economy started to show strong signs of recovery in 2020 itself, as the GDP grew by 6.5 per cent from the second to the third quarter of 2020. While this still represented a contraction of 6.4 per cent compared to the third quarter of 2019, the contraction was slower than the contraction recorded in the second quarter of 2020 (12.1 per cent contraction compared to the second quarter of 2019), indicating economic recovery. 598
596 Oxford COVID-19 Government Response Tracker 597 Government Response Stringency Index: composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest). If policies vary at the subnational level, the index is shown as the response level of the strictest sub-region 598 Trading Economics, 2020
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Figure 59: GDP, constant prices, per cent change in Thailand599
6% 4.4% 4% 2.4% 4.3% 4.3% 2% 4.0% 3.7% 0% -2% 2019 2020 2021 2022 2023 2024 2025 -4% -6% -8% -7.1% IMF - Oct 2020 IMF - Oct 2019
As of June 2020, information collected by a UN study in Thailand indicated severe disruptions to healthcare, nutrition, and protection services for children due to COVID-19 induced restrictions; in the education space, both short term risks to equitable education delivery and long-term dropout-related risks prevailed.600,601
Table 16: Disruption to services for children and mothers due to COVID-19, as of June 2020
Social sector Service delivery impact Healthcare Diversion of healthcare resources towards COVID-19, as well as the reduced ability services of families to access available services due to lockdowns and movement restrictions, contributed to disruptions in healthcare services for children and mothers • Human resources were pivoted towards COVID-19 response, leaving other segments of the healthcare sector understaffed, or temporarily unavailable; child preventive and curative services were vulnerable to such disruption, which could potentially result in a decline in coverage, and increased morbidity and mortality • Use of primary and secondary healthcare services (e.g. maternal and child healthcare, family planning, vaccination) reduced as the population was deterred from using services during lockdown Education Risks of extended and uncoordinated school closures in the public and private sector, combined with unequal access to digital modes of learning, threatened to fragment education service delivery and exacerbate pre-existing learning inequalities • There were risks of delayed reopening of Thai public schools and early childhood development centres, along with risks of extended closure of private schools (using a different school calendar), likely leading to fragmented education service delivery and equity among students post-COVID-19. • Existing learning inequalities were amplified by digital divides (especially for vulnerable groups) stemming from unequal access to learning materials, low quality of some materials, and lack of teachers’ preparedness Even as schools prepared to reopen, risks of low attendance due to a fear of infection, possible student disengagement due to the prolonged reliance on remote learning, and expected long-term dropouts due to financial pressures continued to threaten education delivery
599 IMF, World Economic Outlook, October 2020 600 UN Thailand and Oxford Policy Management, SOCIAL IMPACT ASSESSMENT OF COVID-19 IN THAILAND, July 2020 601 Note: The impacts on ‘social protection’ as a social sector have been discussed in detail in the section describing government response measures
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• There were risks that children and their families and teachers would return to school within a context of heightened risk perception and insecurity, which might impact school attendance • The extended reliance on remote learning was expected to increase disengagement from schooling in the long term • Drop-out rates were expected to increase due to school closure and increased poverty, with likely reductions in education investment by parents Nutrition Diversion of healthcare workers towards COVID-19 disrupted the delivery of essential nutrition services for children, while school closures further deprived children from free school meals • Preventive nutrition services and nutrition counselling services provided as part of the universal health coverage (UHC) were disrupted or suspended due to health workers being engaged in responding to COVID-19 • School closure reduced access to free school meals for children Protection Protection services for children and women were severely impacted due to diversion against violence, of service personnel towards COVID-19, movement restrictions, social distancing exploitation, and requirements and resulting capacity constraints at protection shelters, and a abuse resource-consuming surge in financial assistance related calls to hotlines • Operational capacities of specialist violence protection and response services were directly impacted by the health crisis; e.g., hospital personnel were diverted from crisis centres to COVID-19 responses • Face-to-face health/ medical services (incl. counselling) offered to victims were reduced due to lockdowns • Protection shelters did not have adequate capacity to welcome new victims, with mandatory social distancing and quarantining before victims were allowed in • There was an ongoing concern that Hotline 1300 calls from women and children affected by violence, exploitation, and abuse were overshadowed by callers seeking information about social assistance
However, as lockdowns and restrictions were released, service delivery was seen to improve; as of September 2020, significant disruptions to essential community-based health or protection services for children were no longer noted, with mental health support and child helpline services even having seen increases in coverage. In a survey conducted across UNICEF Country Offices in September 2020, no or minimal declines in coverage were reported for most health and child protection services due to COVID-19; mental health and psychosocial support services, as well as child helpline services even saw increases in coverage at the time of the survey. (Figure 60).
Figure 60: COVID-19 related change in coverage of services in Thailand602
Health services Child protection and social services Mental health and psychosocial Outreach to children in street situations and drop-in centres support services. Disability support services to CP Home visits by social service/ justice workers interventions
Residential and family-based alternative care services
Civil registration services
602 UNICEF, Tracking the situation of COVID-19
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Child helplines GBV risk mitigation including consultation with women and girls and training
of service providers Assistance to children on the move and families
Increase No change <10 per cent 10-24 per cent 25-49 per cent drop drop drop
While the tourism sector has witnessed significant negative economic impact, some sectors (manufacturing, construction) showed signs of recovery over the course of 2020; agriculture was impacted to a smaller degree by COVID-19, while some sectors (pharmaceuticals, e-commerce) even emerged as opportunity areas due to COVID-19 induced demand and growth. The economic impact on tourism is expected to be prolonged, but manufacturing and construction, which sustained severe initial impacts, started to partially recover in 2020 itself. On the other hand, dedicated government support minimized the economic impact on the agriculture sectors, although ongoing droughts did dampen the performance of the sector. Moreover, signs of positive growth have been noted in the pharmaceuticals and e-commerce industries. Figure 61 presents a high-level assessment of some of the key sectors in the country.
Figure 61: Sectoral impact of COVID-19 in Thailand
Significant and sustained negative impact; Significant negative impact, but with emerging signs of recovery as of December 2020; Relatively small or positive impact
Sector Impact of COVID-19 on sector’s economy and employment Manufacturin • The sector, which accounts for 16 per cent of the country’s total MSME output, was g severely impacted by supply chain and trade disruptions in the initial months of the pandemic, with a 17.2 per cent decline in the sector’s Purchasing Manager’s Index (PMI) in the first quarter of 2020603 • The sector did not fully recover to pre-COVID-19 levels in 2020, with manufacturing GDP in Q3 2020 having contracted by 5.3 per cent compared to the same period in 2020 • However, signs of recovery were noted over the year, with manufacturing GDP having grown by 8.5 per cent from the second to the third quarter of 2020604 • Impacts varied among the sub-sectors of manufacturing: sub-sectors like metal products, machinery, and motor vehicles were projected to have expanded due to the dominating impact of global diversions away from traditional exporters like China; sectors like chemicals, textiles, petroleum, and electronics were expected to have contracted due to dominating impact of input supply disruptions605 Tourism • According to a UNCTAD study conducted in June 2020, Thailand was projected to lose USD 47 billion in tourism revenue in 2020, or ~45 per cent of the pre-COVID-19 projections of 2020 tourism revenue606 • Given that the country completely opened itself to international tourists only in mid- December 2020, losses to the sector were likely prolonged: in Q3 2020, sectors related
603 UNIDO, Impact Assessment of COVID-19 on Thai Industrial Sector , 2020 604 Trading Economics, 2020 605 Krungsri Research, Coronavirus Outbreak: Impact on Thai Economy, February 2020 606 Bangkok Post, Tourism in Thailand to lose up to $47bn from Covid-19: UN study, July 2020
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to tourism contracted severely compared to the same period in 2019 – accommodation and food services contracted by ~40 per cent, while transportation and storage contracted by ~24 per cent607 • Related sectors and MSMEs like small handicraft producers, street vendors, roadside food stalls, etc. can be expected to have suffered due to this significant downturn of travel and tourism activities Construction • As of May 2020, GlobalData projected the Thai construction industry to contract by 4.2 per cent in 2020, likely impacting several small and medium sized contractors in the construction sector608 • In the first quarter of 2020, construction output declined by 9.9 per cent compared to the same period in 2019609 • However, signs of recovery were noted over the year, with construction GDP having grown by 18.5 per cent from the first to the second quarter of 2020, and by 0.5 per cent from the second to the third quarter of 2020610 Agriculture • While the sector sustained relatively smaller impacts due to COVID-19, largely owing to government stimuli, external factors like droughts did negatively impact the sector, with overall agricultural output projected to decline by 1 per cent in 2020, according to World Bank estimates as of June 2020611 • This will likely impact smallholder farmers and other MSMEs involved in the value chain, such as distributors, input suppliers, etc. Pharmaceutic • In the first quarter of 2020, domestic sales of medicines increased by 7.5 per cent als and year-on-year, as the COVID-19 outbreak had bolstered demand for medicines to treat healthcare fever, painkillers, anti-inflammatory treatments, and vaccines; however, exports of medicines declined in value by 11.3 per cent year-on-year • However, over the whole of 2020, the value of pharmaceuticals distributed to the domestic market was projected to grow at a slower rate than it did in 2019 (4.2 per cent) because of fewer domestic and international patients seeking treatment in Thai hospitals • Despite this slowdown, the pharmaceuticals sales value was projected to grow at a positive rate of 2-3 per cent in 2020, and rebound to 4.5-5 per cent in 2021 and 2022, due to increasing demand stemming from an aging population and the provision of universal health coverage612 • This can be expected to have positive impacts on MSMEs in the pharmaceuticals supply chains, such as raw material suppliers, equipment manufacturers and suppliers, etc. • Additionally, demand for remote healthcare consultations increased by 352 per cent during lockdowns, and remained 204 per cent higher than pre-COVID-19 levels even after the lockdowns, as of August 2020613 ICT and e- • According to global data, the value of e-commerce transactions in Thailand is commerce expected to grow at 14.8 per cent in 2020614 • Moreover, anecdotal evidence shows that SMEs in the food and beverages space have pivoted their sales and delivery approaches in response to COVID-19 restrictions, leveraging digital platforms like Facebook and delivery apps to reach customers16
607 Trading Economics, 2020 608 GlobalData, COVID-19 Sector Impact: Construction – Thailand, May 2020 609 UNIDO, Impact Assessment of COVID-19 on Thai Industrial Sector , 2020 610 Trading Economics, 2020 611 World Bank Group, Thailand in the time of COVID-19, June 2020 612 Krungsi Research, Thailand Industry Outlook – Pharmaceuticals, May 2020 613 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 614 GlobalData article, August 2020
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MSMEs, which contribute close ~43 per cent of total GDP and employ ~85 per cent of the total workforce, were severely impacted, with ~49 per cent of surveyed tourism and manufacturing MSMEs having reported high risks of permanent business closure as of June 2020. SMEs make up 99.5 per cent of all enterprises in Thailand and contribute ~43 per cent of Thailand’s total GDP, with small and medium enterprises contributing 30.7 per cent and 12.3 per cent respectively. SMEs in Thailand account for 85.5 per cent of total nationwide hiring, with small enterprises accounting for 77.62 per cent.615
In a survey of 982 tourism and manufacturing MSMEs in Thailand conducted from May to June 2020, 49 per cent of reported high risks of permanent business closure and 32 per cent reported moderate risks of permanent business closure, while 1 per cent had already closed down. High risks of permanent business closure were more commonly reported among tourism SMEs (61 per cent of respondents) than for manufacturing SMEs (29 per cent of respondents).616 (Figure 62) In another survey of 314 SMEs conducted from April to May 2020, shortage of cash flow (82 per cent of respondents), shortage of inputs (69 per cent), difficulties fulfilling contracts (58 per cent), and shortage of workers (51 per cent) were reported as the main challenges facing MSMEs.617
The gradual recovery of the economy as observed in the third quarter of 2020 likely had a positive financial impact on MSMEs as input and labour availability improved; however, evidence demonstrating MSME recovery was not available as of December 2020.
Figure 62: Risks of permanent business closure in Thailand Percentage of respondents based on survey of 982 enterprises from May – June 2020
Emerging evidence suggests that MSMEs undertook layoffs in response to the initial economic distress, which could have led to a loss of income for caregivers and a consequent rise in child poverty; disruptions to MSMEs providing food and education for children were minimal and limited to the early months of the pandemic; reports of MSMEs diversifying to digital sales
615 OSMEP, White Paper, 2019 616 The Asia Foundation, Surveys of the Impact of COVID-19 on the Livelihoods of Thai People, 2020 617 UNIDO, Impact Assessment of COVID-19 on Thai Industrial Sector , 2020
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Economic downturn limited MSMEs’ ability to pay salaries and maintain employees, placing informal workers at higher risk due to a lack of social insurance; while gradual recovery of the economy in the second half of the year might have improved the situation, reports of reversal in job losses had not yet emerged as of December 2020 • As of May 2020, the Thai government estimated that 8.4 million people were at risk of job loss in 2020, of which 2.5 million were in the tourism sector, 1.5 million in the industrial sector, and 4.4 million in services, all of which are sectors with significant SME participation618 • In a survey on tourism and manufacturing businesses conducted from May to June A: Layoffs and 2020, the average SME had released 45 per cent of its workforce, with tourism- wage cuts related SMEs having released up to 60 per cent619 • In the same study, 15 per cent of MSMEs and 19 per cent of tourism SMEs reported salary reductions as a means to adapt to the new normal • >50 per cent of the country’s workers are in the informal economy and are not covered by a social security scheme, making them extremely vulnerable to such income loss620 • Youth unemployment was projected to rise from 4.2 per cent in 2019 to between 16.4 per cent and 22.1 per cent in 2020621 • Loss of livelihood is likely to have impacted caregivers employed in MSMEs, consequently having reduced children’s access to food, healthcare, and education due to enhanced affordability constraints In the early months of the pandemic, restrictions on MSMEs and other businesses engaged in food distribution and education did disrupt the delivery of these products and services for children; however, experts note that product and service delivery largely recovered in the second half of the year • Experts note that while the delivery of most services, including food distribution, B. Disruption in was severely disrupted during the height of lockdowns in March-April 2020 due to products and movement restrictions on MSMEs and other businesses, the situation did, by and services large, recover in the second half of the year as lockdowns and movement restrictions were relaxed622 • Complete school closures and resulting disruptions to education did affect 13 million students in March 2020, but the disruption lasted for ~4 months, as schools reopened in July 2020623 Some businesses, notably in the food and beverage sector, have adopted digital C: Diversification means to diversify delivery efforts, but trends in the uptake of such channels by of sales and SMEs have not been established; on the other hand, digitalization has also delivery prompted the online marketing of unhealthy foods by large brands channels • Digitalization has been most prominent in the food and beverage (F&B) sector; for example, anecdotal evidence shows that F&B SMEs pivoted their sales and
618 Theparat, NESDC: 14.4m workers at risk, 2020 619 The Asia Foundation, Surveys of the Impact of COVID-19 on the Livelihoods of Thai People, 2020 620 World Bank, COVID-19, poverty, and social protection, 2020 621 ILO & ADB, Tackling the COVID-19 youth employment crisis in Asia and the Pacific, 2020 622 Dalberg interviews 623 Bangkok Post, Schools reopen across Thailand with temperature checks, masks, 2020
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delivery approaches in response to COVID-19 restrictions as early as April 2020, leveraging digital platforms like Facebook and delivery apps to reach customers624 • The increased demand for online food aggregators, which was dominated by foreign food delivery apps like Foodpanda and Grab, was also seen to spur the emergence of new local startups like ShaRe which aim to eliminate existing pain points such as high commission fees625 • Such diversification provides an alternate route for caregivers to access food for their children • However, the increased digitalization of F&B services can potentially deteriorate children’s nutritional status by promoting unhealthy consumption practices through the online marketing of unhealthy foods; for example, a large beverage company’s extensive social media coverage of its COVID-19 community programme was used as a marketing opportunity to associate a nutrition and antipoverty project with the promotion of unhealthy food products626
Box 9: Trends in CSR funding and priorities in 2020 in Thailand
• In the initial months of the pandemic, examples of companies helping directly on the frontlines, donating medical supplies and proceeds, and offering special support towards vulnerable customers emerged627 o B.Grimm, Thailand’s leading conglomerate, launched its ‘B.Grimm Fights Covid-19 with Compassion’ campaign, donating over THB 46 million (USD 1.5 million) to aid in relieving the coronavirus impacts through financial support, and donations of essentials such as medical equipment, health insurance, and survival packs o Shiseido donated a series of “face shields and products”, to support the doctors, nurses, and healthcare professionals in ten hospitals in Thailand o Thai Wacoal Company Limited put a halt on their garment production, diverting producing towards face masks, of which 10,000 masks were planned to be distributed for free o FN Outlet produced “Face Shields”, which were freely distributed to the surrounding community o Jaspal & Sons donated 200,000 individual face masks totalling a donation value of THB 3 million (USD 100K) o PMT The Hour Glass donated a sum towards purchasing crucial medical supplies for three medical institutes o Gems Pavilion created a survival box, consisting of daily necessities, for households in need • Based on COVID-19 funding opportunities listed on Devex platform, between 1 January 2020 to 17 January 2021, USD 18.3 million came from the private sector, of which more than 95 per cent was towards emergency response628
Emerging evidence already shows that child undernutrition and mental health issues have been exacerbated due to layoffs and wage cuts by businesses, and the resulting reductions in household incomes; past experience and expert inputs also indicate that lower household incomes might cause children to drop out permanently from education.
Layoffs and wage cuts emerges as the primary pathway impacting child rights in the long term in Thailand, with the impact of disrupted products and services having been limited to the early months of the pandemic; on the other hand, diversification to digital channels might have a positive impact by opening up new avenues of access to essential services for children.
624 Leesa-Nguansuk, Covid-19: Thailand eateries banking on delivery apps, social media to survive lockdown, 2020 625 Leesa-Nguansuk, Covid-19: Thailand eateries banking on delivery apps, social media to survive lockdown, 2020 626 NCD Alliance, Signaling virtue, promoting harm, 2020 627 Prestige, Thailand Against Covid-19: Thai Companies Stepping in to Combat Covid-19, April 2020 628 Devex, Funding the response to COVID-19 dashboard (As of 17 January 2021. Funding for Japan excluded for East Asia Pacific)
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Figure 63: MSME actions impacting child rights issues in Thailand
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Before COVID-19, 11 per cent Caregivers with access to digital platforms children <5 years in Thailand were have an alternate source of obtaining food, suffering from stunting, which was but those without access may face risks of marginally higher than the regional further exclusion average of 8.9 per cent for Southeast Asia; 5 per cent of children <5 years were suffering from wasting, which was higher than the regional average of 1.6 per cent for Southeast Asia.629 However, prolonged food security challenges arising from lower household incomes can exacerbate child undernutrition in the country. Emerging evidence suggests that COVID-19 already started to impact nutrition in Thailand in 2020: in a survey of 1,101 households in Thailand held from May-July 2020, 52 per cent of respondents reported purchasing food of lesser quality, such as broken rice or older produce that has lost some of its nutritional value, that fills the stomach rather than providing proper nutrition, as a means to cope with income loss.630 Child Protection Mental health / issues While the prevalence of suicide Increased availability and uptake of online amongst 5–14 year-olds in Thailand mental health services, but those without fell below global and regional access face risks of further exclusion averages before COVID-19, ~12.5 per cent of adolescents had seriously contemplated suicide, according to surveys conducted from 2011- 2017.631 COVID-19 induced household economic stress might exacerbate the situation: in April 2020, over 70 per cent of children in Thailand indicated that their mental health has been affected by COVID- 19, with their family’s financial status being the top concern. While more recent evidence is not available, this can likely continue to be a long-term
629 UNICEF SDG dashboard 630 World Vision, Unmasking the Impact of COVID-19 on Asia’s Most Vulnerable Children, June 2020 631 UNICEF, World Mental Health Day news release, 2020
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concern, given the prolonged impacts of mental health issues.632
Basic education While schools reopened in Thailand in / July 2020, the long-term impact of Increased delivery and uptake of digital COVID-19 induced economic distress education through EdTech platforms, but on access to education and efforts to make these platforms widely permanent school dropouts might be accessible and affordable are nascent severe, based on past experience: evidence from the 1997 Asian Financial Crisis shows that dropout rates in Thailand tripled between 1996 and 1998.633 Moreover, experts predict that COVID-19 related job losses have resulted in an additional ~170k impoverished children in Thailand, placing them at high risk of dropping out from school.634
In response to the immediate economic impacts of COVID-19, the government of Thailand rolled out several economic stimulus package and income support measures, primarily by increasing the benefits available to workers and enterprises registered under existing state social security schemes; additional mechanisms like low interest loans and increased training stipends (e.g., in the tourism sector) were used to provide income support; significant efforts were also made to incentivize employee retention and support financial recovery for SMEs.635
However, limited dedicated action was taken to safeguard informal workers and explicitly protect child rights through government measures. COVID-19 has revealed that despite the existence of voluntary social insurance schemes in the informal sector, most informal workers are unregistered and were hence unable to avail of government relief measures provided during COVID-19; while some efforts were made to assist informal workers during COVID-19, primarily by making cash transfers, gaps remaining in fundamentally expanding social security nets to the informal sector. Moreover, gaps remain in incorporating an explicit child rights lens in response measures, notably in expanding the coverage of family-friendly workplace policies (such as maternal leave) which can support caregivers with their childcare duties during COVID-19; informal workers remain at risk of being excluded from such policies, placing the children of such workers at high risk of neglect during COVID-19.
In addition to government stimulus packages for broader economic recovery, direct economic relief was provided to workers impacted by job losses, primarily by increasing benefits for those already covered by social insurance programmes; however, there was limited dedicated focus on protecting informal workers who are often not covered by such social assistance schemes: • Three economic stimulus packages worth THB 100 billion, THB 117 billion, and THB 1,9 trillion were announced over March-April 2020 to provide financial aid, cash transfers, and overall economic rehabilitation
632 UNICEF, World Mental Health Day news release, 2020 633 UN Thailand and Oxford Policy Management, SOCIAL IMPACT ASSESSMENT OF COVID-19 IN THAILAND, July 2020 634 Bangkok Post, Impoverished students at risk of dropping out amid outbreak, 2020 635 ILO, Country Policy Responses, December 2020
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• Additionally, unemployment benefits to formal sector workers registered under the Social Security Office were increased during 2020-21: for laid-off insured persons, the benefit was increased from 50 per cent of their salary for 180 days to 70 per cent of their salary for 200 days, while for voluntary and end of contract insured persons, benefits were raised from 30 per cent to 45 per cent of their salary up to 90 days • For workers still employed but on leave-without-pay due to temporarily business closures, replacement incomes of 50 per cent were paid for up to 60 days • Financial assistance of 5,000 Baht per month was also paid for three months to 3 million temporary and self-employed workers; the coverage of this measure was later extended to 9 million people
In addition to direct benefits, mechanisms like low or no interest loans and training stipends to workers (particularly in the tourism sector) were used to provide livelihood support. Low interest personal emergency loans worth 10,000 – 50,000 Thai Baht (THB) were channelled through the Government Saving Bank (GSB), with a grace repayment period of up to 6 months and interest rates of 0.1 per cent to 0.35 per cent, while 3-year loans at 3 per cent interest rates were provided to entrepreneurs registered with the SSO. Moreover, an additional 100 billion THB was approved for soft loans to tourism-related operators, including for conducting trainings for workers in return for income to help with daily expenses.
Several measures were also taken to provide financial assistance and liquidity support to SMEs, as well as to incentivize SMEs to retain their workers. As part of the first two government stimulus packages worth THB 100 and 117 billion respectively, special focus was placed on providing financial assistance to SMEs. Under the third stimulus package, THB 500 billion was allocated for funding commercial banks to lend to SMEs with liquidity problems. To incentivize worker retention, SMEs were allowed to claim tax deductions of up to three times against expenses incurred to pay salaries to workers from April to July 2020; these claims were applicable for salary payments to workers registered with the SSO and receiving monthly salaries up to 15,000 THB.
With financial recovery assuming top priority for most MSMEs as they struggle to stay afloat, there has been limited evidence of MSMEs taking deliberate action to protect human and child rights in light of COVID-19 in Thailand.
Hence, there remain several opportunity areas for UNICEF to engage MSMEs and other ecosystem actors in the space of child rights and protection:
Table 17: List of potential interventions for UNICEF Thailand Support strengthening and expansion of social assistance and insurance systems through evidence building and advocacy Advocate for providing and/or strengthening financial assistance and insurance programmes for workers in the informal sector, such as domestic workers (predominantly women), street vendors, agricultural workers Relevance:
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Rationale: While state social insurance schemes do have - All sectors, with special focus on sectors provisions for voluntary social insurance for informal sector with high degree of informality – workers, COVID-19 has revealed that several informal workers domestic work, street vending, remain unregistered and unable to avail of social security agricultural work benefits; moreover, most COVID-19 policy responses have Potential partners: not aimed to expand the coverage of social security schemes - Government of Thailand for informal workers. The absence of adequate social insurance for informal workers, combined with the high likelihood of such workers losing their incomes due to COVID-19, can reduce the affordability of nutrition, healthcare, and education for the children of these informal workers Advocate for stronger policies and work with businesses and other actors to increase accountability of MSMEs towards child rights Develop sectoral toolkits to enable MSMEs to identify key child rights issues for their operations and respect child rights during recovery Rationale: With economic survival taking priority in the Target sectors: sectors most affected by the pandemic, child rights - All sectors considerations have been missing from the survival and Business focus areas: recovery measures being adopted by MSMEs. UNICEF could - Business as provider of goods and services; work with MSMEs and other actors to develop guidance and Business as employer; Business impact on tools (e.g., due diligence communities and the environment: MSMEs guidance on policy commitments and codes of practice for must take deliberate actions to not harm child rights, child safeguarding toolkit for MSMEs, child rights the rights of children of their workers, in impact assessments, reporting for MSMEs) for different the marketplace and in the broader sectors to understand the impact of their business decisions communities and operations on children and recover in a way that does Potential ecosystem partners: not harm child rights. - NGOs and foundations - Industry associations Advocate for policies to mitigate breaches of child rights driven by increased children’s online activity during COVID-19 Rationale: COVID-19 has triggered a spike in children’s Target sectors: online activity. While data is currently limited, aggressive - Food and beverages sector marketing of less nutritious, processed food items could - Consumer goods sector cause unhealthy food consumption behaviour and rise in Business focus areas: overweight among children. Similarly, children may be more - Business as a provider of goods and exposed to marketing content that exploits children’s services for children and families: vulnerabilities and puts their safety at risk. Currently, policy Strengthening of policies that regulate mechanisms to monitor marketing practices of businesses do MSMEs’ online marketing and other not exist in Thailand activities to prevent harm towards children Potential ecosystem partners: - National and regional governments - NGOs and foundations Promote family-friendly policies through advocacy, guidance and tools, and partnerships with businesses Advocate for strong regulations mandating family friendly workplace policies, including paid maternal leave, with special focus on informal enterprises Relevance:
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Rationale: While the law mandates 14 weeks of fully paid - All sectors, with focus on sectors with maternal leave, this policy covers only 33-65 per cent of all high representation of women – employed women in the country; it is likely that women in manufacturing (especially textiles), informal work remain uncovered by these policies due to the agriculture temporary and unprotected nature of their employment; as Potential partners: COVID-19 threatens to exacerbate child undernutrition, it is - Ministry of Labour crucial to enact such policies which can enable caregivers to - Employer and worker organizations dedicate adequate time and focus to child nutrition (through - ILO practices like exclusive breastfeeding) in the critical early childhood years Work with governments to advocate for and provide evidence around supporting recovery of MSMEs in sectors where vulnerable groups are overrepresented Work with other UN agencies to advocate for financial incentives to enterprises which hire youth, especially in sectors which are projected to be drivers of youth unemployment during COVID-19 (agriculture, hotels and restaurants, retail trade) Rationale: Youth unemployment in Thailand is projected to Relevance: All sectors, with special focus on rise sharply from 4.2 per cent in 2019 to 16.1-22.1 per cent in sectors likely to drive youth unemployment– 2020, due to a reduction in employment options caused by agriculture, hotels and restaurants, retail COVID-19; few reports of dedicated efforts to support youth trade employment in the country have emerged Potential partners: - Government of Thailand - ILO - UNDP Convene private-sector stakeholders to facilitate cooperation and sharing of best practices / lessons learned, and bring voices together for advocacy Convene private sector schools and education providers, including MSMEs, to implement re-enrolment and back-to-school campaigns aimed at communities and caregivers, as well as to collectively advocate for government support for such efforts Rationale: COVID-19 induced reductions in household Relevance: income have increased risks of permanent school dropouts - Programming area: Education among children belonging to low-income segments and newly poor segments, with a need for dedicated community Potential partners: and caregiver engagement to prevent dropouts - Private schools and educational institutions - Ministry of Education Mobilise private-sector action towards protracted or lagged COVID-19 induced challenges by filling gaps in evidence, advocating, and leveraging partnerships with businesses Identify and facilitate coordination among local businesses and MSMEs to scale up existing business models which can affordably expand the reach of digital delivery channels, especially in sectors relevant to child wellbeing, such as essential food delivery, mental health services, and education Rationale: Businesses and MSMEs have shifted towards Relevance: ICT, sectors with high impact on digital delivery of food, healthcare, etc. in light of COVID-19, child rights – agriculture and essential food with some reports of local businesses (such as the start-up services, mental healthcare, education ShaRe) making efforts to increase the affordability of digital delivery by eliminating commission fees. Replicating such Potential partners: affordable delivery models through facilitated coordination - Local businesses, start-ups, and MSMEs among MSMEs can reduce risks of deprivation among - E-commerce platforms children belonging to low-income groups - Finance providers (banks, MFIs) - Digital payments platforms
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ANNEX I: METHODOLOGY AND DEFINITIONS
Methodology
Overall Approach
Table 18: Descriptions, approach, sources and data considerations
DESCRIPTION APPROACH AND SOURCES DATA LIMITATIONS AND MITIGATION STEPS ECONOMIC IMPACT OF COVID-19 ON BUSINESSES Assessment of the macro-economic Desk research provided Limitation: Due to the uncertainty impact of COVID-19 on regional comprehensive sources for regarding the spread of COVID-19 GDPs, stringency of containment assessment of the economic impact. and the availability of vaccines, the measures adopted by countries and Recent GDP projections from the IMF economic projections are still their implications for businesses. World Economic Outlook, October evolving. 2020 were consulted to estimate the Mitigation: Latest projections from the economic impact for 2020 and 2021. IMF, as of October 2020, were used Oxford COVID-19 Tracker was used for macro-economic impact. to assess the stringency of lockdown measures across countries. ECONOMIC IMPACT OF COVID-19 ON KEY SECTORS Overall analysis to understand A combination of regional and Limitation: Consistent economic or COVID’s impact on services, national reports from ILO, World employment indicators at the regional manufacturing and agriculture, and Bank, WTTC, ADB etc. was used to level were not available for all sectors. identify sectors within services and create the regional view for the nine manufacturing that were the most sectors. While relatively Mitigation: Available national-level affected by COVID-19. Detailed comprehensive reports and data report from multiple countries in the assessment of nine sectors, which describing the impacts in the first half regions were extrapolated to develop were identified in alignment with the of 2020 were available, or strengthen regional views of impact UNICEF regional team, to comprehensive data for latter periods in early months, and anecdotal understand how COVID-19 was scarce. Hence, anecdotal evidence, triangulated with expert impacted the sectors’ economy and evidence (news articles, expert perspectives, was used for second half employment during the peak interviews) was consulted and of 2020 due to scarcity of reports. lockdown period in both regions triangulated to develop a directional Interviews were also conducted with and how have the sectors recovered. sense of impacts in the second half of external experts – including industry 2020. experts and – to understand the recovery trends in sectors. UNICEF COs were also consulted to align on the key sectors impacted in the countries, especially for the country chapters. ECONOMIC IMPACT OF COVID-19 ON MSMES AND THEIR COPING MEASURES Assessment of key challenges faced MSME surveys conducted by ADB, Limitation: By design, no new field by MSMEs during the pandemic, OECD, World Bank etc. in the April to research on MSMEs was conducted as and key actions taken by them to September timeframe were used to part of this study. cope with the external impact. identify the key challenges and actions. The desk research was also Mitigation: Surveys conducted by supplemented with interviews of other organizations, such as ADB, experts from industry associations. UNIDO, World Bank, were leveraged to understand MSME challenges and decisions. IMPACT OF MSME RESPONSE ON CHILD RIGHTS
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Identification of potential Desk research was used to find Limitation: Direct evidence linking implications of MSME actions across emerging evidence indicating the MSME responses to child rights in the child rights areas: nutrition, child observed impact of MSME responses context of COVID-19 is still sparce. protection, primary healthcare and during COVID-19 and previous Given the indirect relationship education. evidence establishing the relationship between business responses and child between responses and child rights rights and recency of the pandemic, impact. In some cases, a direct causality was often not directly linkage was established through observable. reports from ADB, UNICEF, World Food Programme, etc., and interviews Mitigation: In parallel to desk with external experts and UNICEF research, expert interviews were also stakeholders; for example, household conducted to validate and adapt the income losses were seen to have analysis and glean more nuanced directly caused lower nutritional insights around on-ground impact. intake among children. In cases Interviews were conducted with where impacts on children were internal UNICEF experts (country observed but linkages to business office teams, regional advisors, global were not evident, evidence from and headquarter advisors) to sharpen literature from past crises or our understanding of the emerging theoretical studies were used to impacts on child rights themes via establish a linkage. For example, various pathways. Interviews were also increases in mental health issues conducted with external experts – among children were observed including business and human rights during COVID-19, and past crises experts, industry experts, and experts (such as the Asian financial crises of on vulnerable populations in Asia – to 1997) and theoretical literature further validate and triangulate the indicates that household economic expected impacts on child rights. distress could be a significant contributing factor to this observation. UNICEF Regional Advisors were consulted to validate the linkages between MSME responses and child rights impact. REVIEW OF MITIGATION MEASURES A long list of mitigation measures Relatively comprehensive information Limitation: Comprehensive that could be taken by MSMEs and was available through desk research information on adoption of inclusive other ecosystem actors. Gaps on the degree of adoption of business models by MSMEs were not analysis was conducted to form an mitigation measures, such as social available, as the surveys found indicative view of the relative level insurance and assistance through desk research only explored of activity across the mitigation programmes, by governments. the survival tactics of MSMEs, and not measures. Databases and trackers created by the measures taken by them to actors like ILO, World Bank, OECD protect and promote human and child etc. and reports from UNESCAP, rights during the pandemic. UNICEF etc. were consulted to Mitigation: Available examples from analyse activity and gaps in measures multiple countries were leveraged to taken by governments. develop regional views of the gaps in For gap analysis on measures taken measures around inclusive business by non-government actors, ILO models. COVID-19 tracker was leveraged, and the information was supplemented with reports, press releases and briefs from organizations such as GSMA, IQVIA, IFPRI. For actions taken by MSMEs, news articles were also consulted to develop a directional
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sense in areas where other sources were not available (examples of inclusive business models being adopted by MSMEs).
Approach to prioritizing child rights areas
Starting with the child rights areas where UNICEF works, four areas were prioritized based on the below criteria:
• Relevance to UNICEF’s work/priority areas in ROSA and EAPRO • Potential for private sector, and in particular MSME, responses to have an impact on access to or provision of services in this area
WASH, adolescent development, early childhood development, environment and climate change, HIV/AIDS were found to have weak link with business responses. While social policy is an important area that could exacerbate or address the impact of business responses on children’s wellbeing, business responses themselves are not likely to impact social policies. Thus, this study explores what policy actions were taken by governments to mitigate the impact of COVID-19, but does not consider social policy as a child rights area. Nutrition, child protection, and education were hypothesized to have a clear link with MSME responses, with expected exacerbations in countries where these areas already posed a challenge. For obesity and primary healthcare, the link was less clear, although through the course of the impact analysis, both were ultimately seen to have limited ties to business responses.
Approach to narrowing down economic impact pathways to child rights
A filtering approach was used to identify the most relevant pathways:
1. Desk research was conducted for initial long listing of potential pathways - financing, layoffs and wage cuts, disruptions to products and services, diversification of sales and marketing channels, demand for affordable labour, re-channelization/reduction of CSR budgets and suspension of employee benefits. 2. Next, financing and reduction/re-channelization of CSR budgets were eliminated, as the former was not found to have a direct impact on children, and the latter was less relevant for MSMEs. 3. Deeper analysis and expert consultations surfaced evidence of link of layoffs and wage cuts, disruptions to products and services and diversification of sales and delivery channels with child rights. Although little evidence suggesting relevance of other pathways - demand for affordable labour and suspension of employee benefits – was found. a. Two pathways (layoffs and wage cuts, disruptions to products and services) emerged through which business responses might negatively impact child rights themes, and one pathway (diversification of sales and delivery channels) through which impacts on child rights might be positive or negative. Although regional reports on wage cuts are sparse, early evidence from surveys suggest MSMEs also resorted to suspending salaries of employees to cut costs.
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b. Little evidence was found on MSMEs increasing demand for affordable labour (including child labour). Any potential risk of increase in child labour was more likely to be driven by children seeking employment to meet the income shortfalls in lieu of a pull from MSMEs. c. Suspension of benefits was not explored as a distinct pathway, as availability of employee benefits, beyond bonuses, was not found to be common among MSMEs. Any reduction or suspension of bonuses was captured in the layoffs and wage cuts pathway due to the similar nature of impact on child rights.
Approach to selecting countries
The study also includes deeper analysis for nine countries: Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka in ROSA, and China, Indonesia, Philippines and Thailand in EAPRO. These countries were selected so as to provide a comprehensive and diverse view of both the regions.
Consultations
Name Role / Organization External Experts Annie Khan South Asia Researcher and Representative, Business and Human Rights Graham Harper Director – Sustainability and Social Responsibility, Pacific Asia Travel Association Imran Khan Executive Director, International Chamber of Commerce (ICC), India Ines Kaempfer Executive Director, CCR CSR Beijing and Hong Kong Offices Janhavi Dave International Coordinator, HomeNet South Asia Professor in the Faculty of Law at University of New South Wales (UNSW), Sydney Justine Nolan Visiting Scholar at NYU's Stern Center for Business and Human Rights Rubana Huq President, Bangladesh Garment Manufacturers and Exporters Association Sean Lees Business and Human Rights Specialist, UNDP Asia Pacific UNICEF HQ/Regional Advisors Abdul Alim Regional Social Policy Advisor, ROSA Amanda Bissex Regional Child Protection Advisor, ROSA Andrea Rossi Regional Social Policy Advisor, EAPRO Andrew Mawson Chief, Child Rights and Business Francisco Benavides Regional Education Advisor, EAPRO Inoussa Kabore Programme and Planning Regional Chief, ROSA Jim Ackers Regional Education Advisor, ROSA Kunihiko Chris Hirabayashi Regional Health Advisor, EAPRO Paul Rutter Regional Health Advisor, ROSA Rachel Harvey Regional Child Protection Advisor, EAPRO Roland Kupka Regional Nutrition Advisor, EAPRO Sunah Kim Suh Deputy Regional Director, ROSA Zivai Murira Regional Nutrition Advisor, ROSA UNICEF Country Offices
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Amornchai Challcharoenwattana Corporate Alliance Manager, Thailand Cristina Bertolino Partnerships Manager, Philippines Derval Usher Partnerships and Innovation, China Emma Brigham Deputy Representative, Sri Lanka Eric Arndt Partnerships Manager, Thailand Georgina Belardo Corporate Alliances Officer, Philippines Gregor Henneka Fundraising Director, Indonesia Jin Cheng CSR Specialist, China Justin Bradfield Private Sector Partnership Manager, Pakistan Lukita Setiyarso Partnership Officer, Indonesia Napat Phisanbut Communication for Development Officer and Emergency Focal Point, Thailand Robert Gass Deputy Representative, Indonesia Tajudeen Oyewale Deputy Representative, Pakistan Tomoo Okubo Social Policy Specialist, Thailand Vedprakash Gautam Corporate Alliances Specialist, Bangladesh
Definitions
Child rights areas: Broad themes related to children’s development and child rights; for the purposes of this study, ‘nutrition’, ‘primary healthcare’, ‘child protection’, and ‘education’ are referred to as child rights areas
Employment in the informal sector: Employment in the informal sector includes all jobs in informal sector enterprises or all persons who, during a given reference period, were employed in at least one informal sector enterprise, irrespective of their status in employment and whether it was their main or a secondary job (adapted from the Fifteenth International Conference of Labour Statisticians)636
Employment protection: Policies or contracts safeguarding the jobs of workers and curbing unwarranted dismissals
Family friendly policies: Foundational employment-related workplace policies which have an impact on caregivers, with the implementation of such policies primarily mandated by labour laws due to their explicit link to core human rights; e.g., parental leave policies, policies allowing nursing breaks for mothers, policies allowing prenatal healthcare leave for pregnant employees.
Government Response Stringency Index: A country-level composite measure of the severity of ‘lockdown style’ measures implemented by governments in response to COVID-19, based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest); if policies vary at the subnational level, the index is shown as the response level of the strictest sub-region637
Informal sector: All private unincorporated enterprises, i.e. enterprises owned by individuals or households that are not constituted as separate legal entities independently of their owners (adapted from the Fifteenth International Conference of Labour Statisticians)638
Issue areas: Specific sub-topics within each child rights area: • Nutrition issues areas: undernutrition, obesity • Primary healthcare issue areas: vaccination, treatment for endemic communicable diseases, maternal and new-born healthcare
636 ILO, Defining and measuring informal employment 637 Oxford BSG COVID-19 Government Response Tracker, 2020 638 ILO, Defining and measuring informal employment
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• Child protection issue areas: workplace exploitation, mental health issues, domestic violence • Education issue areas: basic education, vocational training and education Large Enterprises: All enterprises other than sole proprietorships and MSMEs as defined below.
Micro, Small and Medium Enterprises (MSMEs): Definitions of micro, small and medium-sized enterprises vary across countries. For the impact analysis, as the evidence has been sourced from different regional and national studies, a harmonized definition does not exist. For programming purposes, in the recommendations this study classifies companies leveraging the definition used in International Trade Center’s SME Competitiveness Outlook639: • Micro: up to 4 employees • Small: 5 to 19 employees • Medium: 20 to 99 employees Across the countries for which detailed analysis was conducted, MSMEs are defined by various national authorities as follows: MSMEs in Afghanistan: (Defined by Ministry of Commerce and Industry640) • Micro: up to 5 employees, and a total investment of 2.5 million AFs in manufacturing and 1 million AFs in the service sector • Small: 5-19 employees, and total investment of 2.5 – 5 million AFs in manufacturing and 1 - 2 million AFs in services. • Medium: 20-99 employees, total investment of 5 – 10 million AFs in manufacturing and 2 – 5 million AFs in services MSMEs in Bangladesh: (Defined by Bangladesh Bank) • Micro: <24 employees and/or assets worth Tk 500,000 to Tk 5 million • Small: 25-99 employees and/or assets worth Tk 5 – 10 million • Medium: 100-250 employees and/or assets worth Tk 10 – 150 million MSMEs in China: (Defined by SME Promotion Law of China) • Small and Medium: <1000 (manufacturing) / <200 (wholesale) / <300 (retail and software and IT) employees, OR assets <400 million RMB (manufacturing and wholesale) / <200 million RMB (retail) / <100 million RMB (software and IT) MSMEs in Indonesia: (Defined by Ministry of Cooperatives and SMEs) • Micro: Assets < 50 million IDR or annual sales < 300 million IDR • Small: Assets between 50-500 million IDR or annual sales between 300 million-2.5 billion IDR • Medium: Assets between 500 million-10 billion IDR or annual sales between 2.5-50 billion IDR MSMEs in Pakistan: (defined by Small and Medium Enterprise Development Authority) • Micro: Not defined • Small: 10-35 employees • Medium: 36-99 employees MSMEs in The Philippines: (defined by Senate of the Philippines) • Micro: 1-9 employees or asset size up to PhP 3 million • Small: 10-99 employees or asset size PhP > 3 million and up to PhP 15 million • Medium: 100-199 employees or asset size PhP > 15 million and up to PhP 100 million MSMEs in Sri Lanka: (defined by Department of Small Industries) • Micro: Not defined • Small and Medium: <50 employees and capital investment < Rs 5 million MSMEs in Thailand: (defined by Ministry of Industry) • Micro: Not defined • Small: <50 (manufacturing and services) / <25 (wholesale) / <15(retail) employees, or assets <50 million bahts (manufacturing, services, wholesale) / <30 million bahts (retail) • Medium: 51-200 (manufacturing and services) / 26-200 (wholesale) / 16-150 (retail) employees, or assets worth 50- 200 million bahts (manufacturing, services, wholesale) / 30-160 million bahts (retail)
639 IMF, World Economic Outlook, October 2020 640 Rasoli et al, Financing SME in Afghanistan, 2019
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Primary healthcare: For the purposes of this study, ‘primary healthcare’ signifies children’s access to the first basic level of care in outpatient settings, through key healthcare services aimed at individuals and families; such healthcare services cover promotive, protective, preventive, and curative care for children (adapted from WHO definition)641
Purchasing Manager’s Index (PMI): An index of the prevailing direction of economic trends calculated in the manufacturing and service sectors, serving as an indicator of the level of business activity in the sector over a certain reference period (usually monthly); an index value >50 indicates that that the sector has been expanding over the given reference period, while a value <50 indicates that the sector has been contracting over the given reference period642
Social insurance: Policy mechanisms aimed at safeguarding the livelihoods of specific groups within the labour force during economic shocks, often requiring mandatory contributions or insurance ‘premium’ payments from employers or employees
Social assistance: Broad income support programs, such as in-kind or cash transfers and subsidies for food and public utilities, aimed at economically disadvantaged segments within and outside employment structures
641 WHO, 2019 642 Investopedia, 2020
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ANNEX II: DETAILED IMPACT OF MSME RESPONSE ON CHILD RIGHTS
Table 19: Impact of layoffs and wage cuts on child rights
Emerging evidence from COVID-19 directly or indirectly Issue Area Past evidence / theoretical evidence related to Issue Area Nutrition Undernutrition Reduced HH incomes are linked to high Lower household income due to prevalence of undernutrition. Risks of wasting COVID-19 is affecting access to in children < 5 years of age are 25 per cent quality food in vulnerable Caregivers faced with higher in the poorest quintile of households, households. In a study conducted in livelihoods loss are unable to than in the richest643 13 South and Southeast Asian afford adequate nutritious food Evidence from past crises also indicates that countries, households reported a 19 for children; girls are likely to falling HH incomes are likely to cause per cent reduction in average weekly face greater risks of greater increases in undernutrition among food expenditure due to COVID-19 undernutrition girls. A study of the gendered impacts of the induced income losses; ~50 per cent global economic crisis (2008) finds that, of households reported opting for Relevant Sectors: Sectors globally: “gender inequalities are leading to cheaper, more filling but less facing significant layoffs and reduced nutrition and health standards for nutritious food due to loss of wage cuts - tourism, RMG, women and girls…compounded by both livelihoods.646 wholesale and retail trade financial constraint and the rising costs of household goods.644 For example, in Bangladesh, during the global financial crisis of 2008, wasting rates (having a low weight for your height) increased more among girls under five than among boys – 8.6 per cent compared with 7.1 per cent 645 Obesity Regional evidence establishing the link While data is emerging on between lower household incomes and increased risk of overweight increased prevalence or risk of overweight is among children due to school Caregivers and children could weak. While data is available for western closures and restricted mobility, increase consumption of cheap, countries, in South Asia and East Asia Pacific evidence substantiating processed food products only rare country-level studies are available. correlation between COVID- Nutrition experts interviewed for this study induced lower HH incomes is Relevant Sectors: Sectors shared on-ground experience highlighting rise sparse. facing significant layoffs and in risk of overweight among children due to wage cuts - tourism, RMG, consumption of unhealthy food as nutritious wholesale and retail trade food options become unaffordable Expert interviews suggest that families unable to afford nutritious food could increase consumption of cheaper, less nutritious, packaged food. Child Protection Workplace exploitation Evidence from previous crises have Experts have expressed concerns established rise of exploitative employment that COVID-19 may push millions of children. Early entry into the labour force of children into child labour. According to a brief by the ILO and
643 Idris, June 2020 644 UNAIDS, Impact of the global economic crisis on women, girls and gender equality, 2012 645 Plan International Evidence Review, 2013 646 World Vision, June 2020
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Children may seek has been prevalent in many countries highly UNICEF, COVID-19 could lead to rise employment, even in hazardous affected by the HIV/AIDS epidemic647 in child labour. Children already workplaces, to alleviate Previous evidence indicates that girls are working could face longer working financial distress at home particularly at risk of being pushed into child hours or worsening conditions.649 labour, especially into sexually abusive work. Some anecdotal examples of rising Relevant Sectors: Sectors Study on impact of Asian financial crisis found instances of child labour facing significant layoffs and that adolescent girls became involved in sex exploitation are emerging. wage cuts - tourism, RMG, work to financially help their parents or pay for However, any risk of child labour wholesale and retail trade; siblings’ education648. rise is more likely to be driven by a Sectors with high prevalence Expert interviews suggest children, perhaps push from children or caregivers of child labour – agriculture, encouraged by parents, may opt to work to vs a pull from businesses. In India, domestic work support reduced family incomes increased trafficking of children for illegal work in factories and farms has been reported650 Domestic violence There is a strong link between Media coverage indicates rise in unemployment and domestic violence. An domestic violence due to COVID- increase in female unemployment increases 19. In China, increase in domestic Financial stress in households domestic abuse as women lose outside options, violence against women and girls threatens to increase shifting the couple’s power balance.651 Male was reported.653 In Bangladesh, prevalence of domestic identity is closely tied to a breadwinner norm, recent surveys show numerous cases violence, which children and thus men’s job loss will tend to prime male of physical, mental and sexual abuse experience or witness identity, create stress and trigger domestic towards women, due to financial violence.652 pressures, along with lockdowns654 Relevant Sectors: Sectors facing significant layoffs and wage cuts - tourism, RMG, wholesale and retail trade
Mental health issues Parental unemployment has an adverse National studies suggest that the impact on family relations and in turn, financial impact and uncertainty children’s mental well-being. Previous studies of parental job losses during Loss of jobs and income have shown that periods of economic COVID-19 adversely effects threaten to increase household recessions increase the risk of mental health children and adolescent’s mental stress and domestic violence, problems, including mental disorder, substance health. A recent survey by UNICEF 655 depriving children of a disorders and suicidal behaviour . found that over 70 per cent of conducive environment to Increase in domestic violence fuelled by job children and young people in develop; girls, who are more losses impacts children’s mental health. Thailand reported that COVID-19 predisposed towards mental There is a strong link between unemployment had affected their mental health, 656 health issues, might be at and domestic violence . Children who witness with the uncertainty of their family’s enhanced risk domestic violence are at risk of harm & can financial situation being biggest 659 suffer severe emotional and developmental source of worry . Experts also note Relevant Sectors: Sectors difficulties, including higher levels of childhood that household economic distress 657 facing significant layoffs and behaviour, social & emotional problems . due to COVID-19 is leading to wage cuts - tourism, RMG, While there is no evidence that parental increased levels of stress among wholesale and retail trade income loss has disproportionate impacts on children, as the feel responsible for
647 Idris et al, 2020 648 Idris et al, 2020 649 ILO, UNICEF, COVID-19 may push millions more children into child labour, June 2020 650 The Guardian, Covid-19 prompts 'enormous rise' in demand for cheap child labour in India, October 2020 651 Anderberg et al, 2016, Unemployment and Domestic Violence: Theory and Evidence 652 Anderberg & Rainer, 2011, Domestic Abuse: Instrumental Violence and Economic Incentives 653 UNICEF, COVID-19: Children at heightened risk of abuse, neglect, exploitation and violence amidst intensifying containment measures, March 2020 654 Ridwan Islam Sifat, Impact of the COVID-19 pandemic on domestic violence in Bangladesh, October 2020 655 Frasquilho et al, Mental health outcomes in times of economic recession: a systematic literature review, 2016 656 ISER, What are the effects of lockdown and recession on domestic violence?, 2020 657 Schecter & Edelson, 1999, Effective intervention in domestic violence and child maltreatment cases; 659 UNICEF, 8 in 10 youth worried about their family income due to COVID-19, 2020
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the mental health of girls, some studies their households; reports of suggest that girls are more predisposed to increased suicide rates due to such mental health issues, suggesting that their stress have been noted in Nepal.660 mental health might be at greater risk due to In a recent study, over half of the COVID-19. A study of psychological health parents reported that COVID- problems among Chinese adolescents finds that induced financial challenges are that female gender was the higher risk factor for affecting their parenting skills661. depressive and anxiety symptoms.658 Education Basic education Reduction in HH wages limit poor children’s Children from poor HHs have been access to internet and digital tools to engage left behind on remote learning. in remote learning. Income losses limit Studies during COVID-19 have found As families struggle to afford parents’ ability to provide children with the that children from poor and rural children’s education needs, appropriate digital tools to maximize learning, households make up 3/4 students children from vulnerable especially in Asia Pacific where only 43 per cent who cannot be reached by remote families are at risk of falling of households have access to a computer at learning opportunities, though the behind in remote education home662. percentage is even higher in LICs667. and dropping out completely Impact could be more pronounced especially As many as 10 million learners are from the system; girls face in countries where internet affordability is at risk of exiting the education enhanced risks of reduced historically low. Indonesia, Bangladesh, and system across West, South, and access to education, as falling the Philippines have high internet access costs East Asia Pacific. A recent study by HH incomes can trigger coping relative to income663. UNESCO found that up to 24 million mechanisms like girl child Falling household incomes can create greater students globally are at risk of marriage, and also magnify risks of reduced access to education for girls dropping out, of which 10.9 million parental preferences in favour than for boys. Past crises indicate that are of primary and secondary-school of educating boys adolescent girls are likely to face greater risks of age, Across regions, South and West school drop-out when households lose Asia had the highest number of at- Relevant Sectors: Sectors income664; e.g., during the Ebola crisis, marrying risk learners with 5.95 million while facing significant layoffs and off girl children was employed as a coping East Asia Pacific was third behind wage cuts - tourism, RMG, mechanism by HHs losing income, effectively Sub Sahara Africa with 4.5 million wholesale and retail trade cutting off girls from education.665 Moreover, in learners668 poorer households where availability of digital devices are limited, studies show that parents may favour boys over girls for device usage and education.666 Vocational education and Same as above training Expert interviews indicate that adolescents may drop-out from TVET programs to join Decrease in household income the workforce early. could increase the risk of TVET students dropping out completely from the system, as families struggle to afford their education needs
658 Zhou et al., Prevalence and socio-demographic correlates of psychological health problems in Chinese adolescents during the outbreak of COVID-19, May 2020 660 Stakeholder interviews 661 Stress and parenting during the coronavirus pandemic, 2020; 662 ITU, Measuring digital development, 2019 663 EIU, 2020, The Inclusive Internet Index 2020 664 UNESCO, How many students are at risk of not returning to school?, 2020 665 UN, Policy Brief: Education during COVID-19 and beyond, 2020 666 UNICEF, 2020, ‘Building back equal’ for girls’ education 667 UNICEF, 2020, Covid-19: Are Children Able To Continue Learning During School Closures?; 668 UNESCO, How many students are at risk of not returning to school?, 2020
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Relevant Sectors: Sectors facing significant layoffs and wage cuts - tourism, RMG, wholesale and retail trade; TVET service providers
Primary healthcare Vaccination As caregivers lose income, the indirect costs of accessing primary health care for vaccination become unaffordable. This Caregivers could find it difficult income effect has been evidenced to hold to afford indirect costs, e.g., true in the focus regions. Studies by WHO, travel costs, of obtaining based on datasets from 86 LMICs, uncover vaccines at healthcare facilities; significant pro-rich inequalities in immunization the opportunity costs of time coverage in LMICs, including those in South and spent on getting vaccines East Asia Pacific669. become more pressing Expert interviews indicate that drop in immunization coverage during COVID-19 was primarily driven by fear of infections among caregivers and inability of healthcare workers to reach centres or households as opposed to economic reasons. Endemic communicable In focus countries in South Asia, and in the In countries where private sector diseases Philippines and Indonesia, a majority of healthcare was already dominant, healthcare is privately provided and there have been increases in expensive, making healthcare inaccessible reliance on paid private healthcare Caregivers could struggle to for lower income segments. Private healthcare during COVID-19. In Bangladesh, afford direct medical costs (in spending as a percentage of total healthcare public hospitals have allotted most countries dependent on private expenditure is above 50 per cent in all focus resources to COVID-19, increasing healthcare) and indirect costs, countries in South Asia and the Philippines and the already high reliance on paid including opportunity costs of Indonesia670. private care673. In Indonesia, already time spent on treatment at The indirect cost burdens associated with weak public health facilities in healthcare centres accessing healthcare, like travel, and regions like Papua, which have high opportunity costs, are significant for prevalence of diseases like malaria, Relevant Sectors: Sectors caregivers, a trend seen in national studies. are strained by COVID-19, increasing facing significant layoffs and In Sri Lanka, travel comprised as much as 22 per the dominance of paid private care, wage cuts - tourism, RMG, cent of treatment costs671. In China, indirect thus those unable to afford private wholesale and retail trade; costs of malaria, including caregivers’ lost care might have been left with fewer Private healthcare providers labour productivity, as well as costs incurred by options 674. caregivers on transport to clinics and food, account for 6 per cent of annual household income672. Maternal and new-born Lower income levels are seen to result in Early evidence demonstrates that healthcare lower utilization of MNH services in LMICs women from lower-income and in Asia specifically. A literature review of households faced greater difficulty maternal and reproductive health in South Asia in accessing healthcare during Households could struggle to finds that lower household income is associated COVID-19, indicating that further afford direct medical costs with higher maternal mortality rates, due to reductions in income could have (largely in the private sector, further reduced access. An
669 WHO, Inequalities in full immunization coverage, 2016 670 World Bank data 671 Russell, The Economic Burden of Illness for Households in Developing Countries, 2005 672 Xia, et al., Economic cost analysis of malaria case management at the household level during the malaria elimination phase in The People’s Republic of China, 2016 673 International AIDS Society article, 2020 674 The Jakarta Post article, July 2020
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but also in the public sector) lower utilization of maternal healthcare assessment by the World Bank in and indirect opportunity costs services675 April 2020 showed that in Nepal and of time spent on accessing Income losses threaten to directly reduce Afghanistan, women in around 80 MNH affordability of MNH in countries reliant on percent of the poorest households costly private sector MNH. Same as above report that distance is a ‘big’ Relevant Sectors: Sectors Even where MNH services are provided by problem in using health services, facing significant layoffs and the public sector, direct costs stemming from while this is the case only for about wage cuts - tourism, RMG, systemic inefficiencies can become 20 percent for the richest group in wholesale and retail trade; unaffordable. In Bangladesh, Pakistan, and Nepal, and 40 percent in Private healthcare providers Afghanistan, income loss can reduce Afghanistan. affordability of MNH even for those who rely on public care due to high provider fees, costs of medicines, informal payments to providers and staff676. While decline in the access of maternal and new-born healthcare during COVID-19 due to strain on healthcare system is well- documented, impact of reduced HH incomes during COVID-19 on access to maternal and new-born healthcare is not well researched yet. UNICEF CO interview suggested that lower rates of institutional deliveries were reported during COVID-19, due to unaffordability of direct costs in absence of insurance, along with fear of COVID-19 infection
Table 20: Impact of disruptions in products and services on child rights
Due availability of the COVID-specific data, theoretical evidence in most cases was not researched for this coping mechanism.
Past evidence / Emerging evidence from COVID-19 directly or Issue Area theoretical evidence indirectly related to Issue Area Nutrition Undernutrition - Rising food prices resulting from disruptions in essential food supply chains led to prolonged price rises, compounding the food security impacts of Lack of access to agricultural income loss. Specifically, agribusinesses along the inputs and labour due to entire supply chain faced delays and halts during COVID-19 may impact COVID-19677. This contributed to pro-longed food price production in next season inflation. Globally, in August 2020, the prices of food products were on average 5.5 per cent higher than in Relevant Sectors: Agriculture, August 2019. This pattern held true in Asian economies transportation, wholesale and towards the end of 2020 as well: FAO data showed that retail trade, chemicals (e.g., food prices in Asia rose to their highest level in nearly fertilizers) six years in November 2020. This increase in prices might have had a positive impact on net food producers, including farmers and other MSMEs in the supply chain, such as processors or aggregators.
675 World Bank, Improving Maternal and Reproductive Health in South Asia, 2017 676 ADB, Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity, 2012 677 World Food Program, Macro analysis of COVID-19 19 threats to food security and livelihoods in Asia and the Pacific, June 2020
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However, the majority of the population comprises net food consumers, who were not only facing food affordability constraints due to income losses, but also saw further deteriorations in their food security owing to rising food prices. A World Bank brief indicates that while the food insecurity currently is not driven by food shortages, disruptions in access to agricultural inputs and labour could reduce next season’s crop production678 Obesity Examples in certain countries suggest that disruptions in food systems Disruptions in the food supply is expected to have chain might reduce the affected the availability availability and increase the and affordability of healthy cost of nutritious food options food. For example, lockdown in comparison to unhealthier restrictions in Vietnam forced options the urban poor, who usually rely on traditional markets, to Relevant Sectors: Agriculture, frequent supermarkets where transportation, wholesale and fresh food is often less retail trade affordable679 Child protection Mental health issues In Asia, the distribution of Disruption in mental health services was observed the already limited across countries. Evidence from a survey of 130 psychiatrists is often countries globally indicated that COVID-19 disrupted Disruptions to private mental heavily weighted in favour critical mental health services in 93 per cent of countries health service providers and of large cities, leaving rural globally681. transportation services may populations without access reduce access to mental health to mental health services. services, preventing at-risk For example, Indonesia, a children from availing critical country that is made up of services 13,000 islands has 50 per cent of its psychiatrists Relevant Sectors: Healthcare located in Jakarta680 Education Basic education - Examples of private schools struggling are emerging from some countries. A recent report highlights that more than 100 private schools in Bangladesh declared Disruptions to private insolvency during COVID682. education providers as a result of COVID-19 may impact children’s access to basic education
Relevant Sectors: Education
678 World Bank, Food Security and COVID-19, November 2020 679 IIED, The impact of the COVID-19 lockdown on the diets of Hanoi’s urban poor, 2020 680 Meshvara, Mental health and mental health care in Asia, 2002 681 WHO, COVID-19 disrupting mental health services in most countries, WHO survey, 2020 682 BBC, Coronavirus: How the lockdown has changed schooling in South Asia, September 2020
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Vocational education and - Impact on business operations threatens disrupt training practical training for TVET students, including reduced internships and apprenticeships. Recent surveys found that ~75 per cent of firm-level Reduced apprenticeships and apprenticeships and internships were completely internships opportunities at disrupted in the Philippines, with majority of surveyed MSMEs for Technical and companies discontinuing apprentice and intern’s Vocational Education and wages/stipends. Similar findings were reported in India Training (TVET) limit where the pandemic caused a complete disruption of opportunities to obtain training ~66 per cent of firm-level apprenticeships and~75 per cent of internships, while ~40 per cent of firms indicated Relevant Sectors: All sectors that they had stopped providing wages/stipends to apprentices and interns 683. Primary healthcare Vaccination Expert interviews indicate that vaccine shortages have been mostly addressed. Primary healthcare providers faced short term disruptions in vaccine supplies
Relevant Sectors: Healthcare, Pharmaceuticals
Endemic communicable Expert interviews indicate Short-term supply chain disruptions, both globally diseases that medicine shortages and domestically, restricted the availability and have been mostly affordability of drugs. For example, lockdowns addressed (data on price resulted in a 50 per cent capacity reduction of drug Decreased availability of not available). manufacturing plants, while lead times for API delivery essential drugs at primary from China, which supplies 70-75 per cent of India’s healthcare centres in the initial APIs, increased by 4-12 weeks as air cargo charges have months limited access to risen 3x. Moreover, these disruptions are expected to effective treatment for have caused a 10-25 per cent increase in the cost of childhood communicable production. diseases Disruptions in operations of private healthcare Relevant Sectors: Healthcare, providers was not noted in secondary sources. Pharmaceuticals
Maternal and new-born - Disruptions in production of medical supplies for healthcare maternal and newborn healthcare were being seen in some markets, particularly large exporters. For example, China and India, which are major Decreased availability and manufacturers of MNH products (medicines, increased cost of MNH supplies supplements, etc), faced challenges in manufacturing in initial months limited access and exporting, resulting in reduced lower capacity of 30 684 to MNH, especially in low- per cent – 75 per cent . income segments Disruption in short-term domestic transport services Relevant Sectors: Healthcare, could have led to delays in the availability of MNH Pharmaceuticals drugs and restrict mobility of both patients and healthcare providers. In Nepal and Sri Lanka, ‘transportation within country’ and ‘limited availability in
683 OECD, The Impact Of Covid-19 On Education, 2020 684 USAID, Maintaining maternal, newborn and child health commodity supply in the time of COVID-19 , June 2020
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local/national markets’ were the top reasons for disruption in MNH supplies685 while in Pakistan, the lack of public transportation and lockdowns compelled women in remote rural areas to rely on untrained local health personnel for prenatal care, deliveries, and postnatal care686. Furthermore, experts suggest that access to health facility in Pakistan was limited, with an observed reduction in institutional deliveries687.
Disruptions in operations of private healthcare providers was not noted secondary sources.
Table 21: Impact of diversification in sales and delivery channels on child rights
Past evidence / theoretical Emerging evidence from COVID-19 Issue Area evidence directly or indirectly related to Issue Area Nutrition Undernutrition A shift to digital channels of food National examples suggest that, during distribution can potentially COVID-19, several MSMEs have been able to / disadvantage children from families utilize partnerships with e-commerce players Digital logistics services lacking access to internet, especially in to continue distribution of essential food could help MSMEs South Asia. With the average internet items. In China, Alibaba made local deliveries of involved in food penetration in South Asia at only 20 per fresh produce to Chinese consumers through its distribution to overcome cent of the population, there exist risks of online shopping site Taobao, sourcing orders COVID-induced exclusion from access to food and “hyper-locally” from SME retailers and disruptions and resume nutrition for households lacking access to independent chains. In India, Flipkart has 688 timely supply activities digital platforms . In a recent survey of developed a “hyperlocal delivery” grocery service 8,600 consumers in East Asia Pacific, 45 linking SME suppliers with its e-commerce 690 Relevant Sectors: E- per cent of low-income respondents operations commerce, food services, reported plans to shop more online for There are also emerging examples of MSMEs ICT groceries and essentials vs 58 per cent of in food supply chains setting up their own e- 689 high income respondents. commerce services. In Thailand, MSMEs are selling food directly to consumers via Facebook and local delivery apps over mobile networks691. In Bangladesh, Producer Organizations comprised of small rural farmers have set up ‘virtual call centres’ to connect farmers to buyers and ensure sale and delivery of produce692. Overweight Increased exposure to food Some national studies suggest that lockdowns advertisements could lead to increased and school closures have drastically raised calorie intake. However regional children’s screen time. In India a study found F&B enterprises could evidence is limited. that the screen time for 5-15 year-olds increased increase marketing of A systematic review of studies carried out by up to 100 per cent with 54 per cent of parents unhealthy food products from 1980 to 2018 on the above subject through digital channels involving children between 2 to 18 years found that, “short-term exposure to unhealthy food advertising on TV and
685 UNICEF MNH dashboard 686 Sarwar et al., Impact of the COVID‐19 pandemic on maternal health services in Pakistan, August 2020 687 Dalberg Stakeholder Interviews 688 World Bank, 2020 689 Bain and Co., How Covid-19 Is Changing Southeast Asia’s Consumers, June 2020 690 IFPRI, COVID-19 and resilience innovations in food supply chains, July 2020 691 IFPRI, COVID-19 and resilience innovations in food supply chains, July 2020 692 World Bank, Digital technology ensures food supply in rural Bangladesh during COVID-19, August 2020
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Relevant Sectors: Food advergames increases immediate calorie reporting that their children spend an additional and beverages consumption in children”693 5 hours online694 While evidence specific to MSMEs in the regions is scarce, emerging reports surface a concerning trend in the advertising of unhealthy food products to children during COVID-19. A recent report by NCD Alliance, provides examples on how companies selling unhealthy commodities have adapted their marketing and promotions to leverage the pandemic. For example, KFC and Nintendo had collaborated in the Philippines to integrate advertising in a popular game where gamers could win KFC giveaways by completing an in- game task695. However, evidence establishing role of increased exposure of children to advertising during COVID-19 in the issue of overweight is fairly limited. Child protection Mental health issues Some national studies suggest use of digital channels for expanding access to mental / health services. Regional trends are not evident yet. A recent study in China found that Increased availability and platforms such as WeChat, Weibo, and TikTok uptake of online mental were used extensively to enable online mental health services, but those health education for medical staff and the public, without access face risks and deliver online psychological counselling. of further exclusion Study also found that AI was used to enhance
mental health services.696 Relevant Sectors: E- Mental health tech startups are witnessing a health, healthcare, ICT spike in demand. Riliv, a startup that offers distance counselling and psychosocial services, witnessed a 50 per cent increase in downloads and 300 per cent increase in users697. Halodoc, a leading local telemedicine startup saw its mental health consultations increase by 80 per cent as of April 2020 compared the same period last year698. While the growth in mental health services is encouraging, the extent to which it meets the needs of children requires further research. Education Basic education Children in countries where internet COVID-19 accelerated the uptake of EdTech affordability is historically low or who platforms in East Asia Pacific. In South Asia / only speak minority languages are at similar examples are also emerging. risk of falling behind their peers. Installations of top EdTech applications in the Delivery and uptake of Indonesia, Bangladesh, and Philippines ASEAN region grew by 3X, increasing to 20 digital education has have high internet access costs relative to million between January and August 2020, from increased through income which poses significant risk that 6 million in the same period in 2019. Thai edtech education technology
693 Russel et al, 2018 694 Verma, COVID-19 Impact: Screen time up by 100 per cent for children, 2020 695 NCD Alliance, 2020, Signaling virtue, promoting harm 696 Liu et al, 2020, Online mental health services in China during the COVID-19 outbreak 697 AntaraNews, 2020, Tiga "startup" Indonesia tumbuh di tengah pandemi 698 Annur, Konsultasi Kesehatan Jiwa Halodoc Naik 80 per cent, Mayoritas dari Milenial, 2020
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(EdTech) platforms, but COVID-related job losses and wage startup, OpenDurian, aims to drive adoption of efforts to make these reductions could significantly reduce digital education in South East Asia and platforms widely internet accessibility. Indonesia, supplement school education in the long- accessible and affordable Bangladesh, and Pakistan significantly term.700 In India, mobile operator Airtel partnered are nascent limited online content in a local language with a EdTech start-up to scale distribution of that are relevant to local norms, that may quality learning among kids.701 Relevant Sectors: limit local children from participating EdTech meaningfully in the online learning space. 699 Primary healthcare Endemic communicable Risks around exclusion due to Use of digital channels for accessing primary diseases inadequate access to digital healthcare for children has increased in infrastructure remain. With the average Southeast Asia due to COVID-19. Evidence for / internet penetration in South Asia at only other regions is limited. Remote consultations Caregivers with access to 20 per cent of the population, there exist by paediatricians in Southeast Asia were 281 per digital platforms have an risks of exclusion from access to digital cent higher than pre-COVID-19 levels during the alternate source of healthcare for households lacking access lockdowns, and stayed 165 per cent higher even 702 accessing treatment for to digital platforms . Even within East after the lockdowns. their children, but those Asia, where internet penetration (55 per Some MSMEs are taking up the opportunity 703 without access face risks cent of population ), countries with arising from demand-side push; however, of further exclusion poorer access to digital infrastructure regional/national trends have not been have seen lower increases in digital established. In Pakistan, Sehat Kahani, a Relevant Sectors: E- healthcare. For example, Indonesia, the medium-sized enterprise, digitally connects health, healthcare, ICT country with the lowest increase in home-based doctors, including childcare experts, remote consultations, has the lowest to patients in communities with limited access to smartphone penetration rate704 healthcare providers705. In Malaysia, several individual practitioners are now enlisting on local digital healthcare platforms to provide consultation via messaging, phone call or video call for a fee706 Whether these digital channels will expand the access to treatment of endemic communicable diseases is not clear yet. Maternal and new-born Same as above There are emerging examples from countries healthcare where use of small digital platforms to access maternal and newborn healthcare related / information has increased. But Mothers with access to regional/national trends have not been digital platforms have an established. For example, In India, online queries alternate source of related to gynaecology and maternal healthcare accessing MNH, but those on the telemedicine platform Practo grew by without access face risks more than 250 per cent since the COVID-19 of further exclusion outbreak707. Whether these digital platforms will expand Relevant Sectors: E- the access to maternal and new-born health, healthcare, ICT healthcare is not clear yet.
699 EIU, 2020, The Inclusive Internet Index 2020 700 Nikkei Asia, ASEAN's edtech startups eye brisk expansion on COVID boost, December 2020 701 GSMA, Education For All in the Time of COVID-19, September 2020 702 World Bank 2020 703 World Bank 2020 704 IQVIA, COVID-19 Pandemic and digitalization of healthcare in SEA; August 2020 705 GSMA, Using technology to fight COVID-19: A spotlight on telemedicine start-up Sehat Kahani in Pakistan, June 2020 706 The Star, Doctors weigh in on consulting online, June 2020 707 Healthcare Radius, 250 per cent rise in Indians consulting online for gynaecology amidst coronavirus outbreak: Study, April 2020
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ANNEX III: REGIONAL IMPACT SNAPSHOTS
Economic and Child Rights Impact Snapshot: South Asia
ROLE OF MSMES IN SOUTH ASIA IMPACT OF COVID-19 IN SOUTH ASIA -8.4% expected regional GDP growth in 2020
115 million Jobs temporarily lost in the third quarter of 2020
KEY IMPACTED SECTORS PRE-EXISTING VULNERABILITIES OF MSMES IN SOUTH ASIA BEFORE COVID-19
High degrees of informality Limited access to credit and financing, owing to which >50% of MSMEs in South Asia faced full or partial financial constraints
Readymade garments
Relevance: • Bangladesh: 30% contribution to employment, 80% female workers in sector • Sri Lanka: 30% contribution to employment, 80% female workers in
sector • Nepal: 1.8% contribution to employment, 45% female workers in ROLE OF AND CHALLENGES FACED BY WOMEN IN MSMES IN SOUTH ASIA sector Economic impact – decline in export revenue: • Pakistan: 20%, Bangladesh: 32%, Sri Lanka: 40%, Nepal: 41% Contribution to youth unemployment due to COVID-19: (overall textiles sector) • Pakistan: 8%, Bangladesh: 14%, Sri Lanka: 10%, Nepal: 5% IMPACT OF COVID-19 ON MSMES IN SOUTH ASIA
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Construction Relevance: • 11% contribution to total employment, 16% contribution to total informal employment • 3% contribution to female employment, 6% contribution to informal female employment Economic impact: • 3.5 million jobs lost in Bangladesh • 4.2 million jobs lost in Pakistan • 11–25% employment contraction in India Contribution to youth unemployment due to COVID-19: • Pakistan: 14%, Bangladesh: 13%, Sri Lanka: 11%, Nepal: 22%
Wholesale & retail trade SHORTFALL IN GOVERNMENT SUPPORT TO MSMES IN SOUTH ASIA Relevance: • 33% contribution to total informal employment • 16% contribution to informal female employment Economic impact: • 1.5 million layoffs in India • 4.2 million facing wage cuts in Pakistan Contribution to youth unemployment due to COVID-19 (retail trade): • Pakistan: 13%, Bangladesh: 12%, Sri Lanka: 14%, Nepal: 14%
Figure 64: MSME actions impacting child rights issues in South Asia
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Income losses reduced the ability of Movement restrictions impacted the The utilization of digital delivery caregivers to afford nutritious food distribution of essential food items for platforms has increased across the region. for their children. In Afghanistan, in a children and led to food inflation; for Caregivers with access to digital platforms survey in June 2020, 90.2 per cent example, in a study in Bangladesh, 66 have an alternate source of obtaining reported relying on less expensive per cent respondents reported closed and low-quality food to cope with market as the main challenge in
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income loss, 38.4 per cent reported acquiring nutritious food.711 However, food, but those without access may face reducing portion size, and 35.9 per these impacts were limited to the early risks of further exclusion cent reported reducing the number of months of the pandemic. meals per day708; In a study in The economic impact on undernutrition Bangladesh, 70 per cent of was further exacerbated by disruptions respondents indicated they couldn’t to community-based nutrition provide a varied diet to children programs: for example, in Pakistan, between 6 and 23 months.709 In a programs to promote nutritious diets survey of 4,614 households in Nepal among children (6-23 months) and conducted in August 2020, 91 per school feeding programs have reported cent of respondents reported 25-49 per cent coverage reductions. 712 purchasing cheaper food of lesser In Sri Lanka, school-based nutrition quality, 66 per cent reported reducing programmes reported a 75-100 per cent the number of meals per day, while 67 reduction in coverage, as of September per cent reported reductions in meal 2020.713 size. In Pakistan, an additional 2.45 million people, beyond the pre- existing 40 million, were pushed into food insecurity due to COVID-19 in 2020. In a survey conducted from May to July 2020, 63 per cent of households in Sri Lanka reported relying on less expensive and lower quality food due to reduced income, while 29 per cent reported having reduced food portions for their children.710 Child Protection Domestic violence While there is limited concrete evidence of higher rates of violence against women and children due to the pandemic, rising household economic stress combined with home isolation norms might result in these impacts. For example, in Bangladesh, in a study by NAWG, 42 per cent of respondents Experts also note rising risks of child online reported increase in beatings by abuse during COVID-19, as abusers seek out parents and 50 per cent considered alternate sources of income during the
girls’ safety and security to be an issue pandemic and children spend more time in the lockdown714. In Nepal, there online716. Recent news articles have reported were 48 complaints of child sexual examples of increased online abuse of assaults in the first six weeks of the children during COVID-19.717 lockdown itself, as compared to a total of 211 cases over the course of the entire previous Nepali fiscal year. In Sri Lanka, a 44 per cent increase in violence against children was reported during the first three months of the lockdown.715 Mental health / issues
708 World Vision, The Assessment of Socio-Economic Impact of COVID-19 on the Most Vulnerable Families of Afghanistan, June 2020 709 Roberton et al (2020) 710 World Vision, Unmasking the Impact of COVID-19 on Asia’s Most Vulnerable Children, June 2020 711 UKAid, COVID-19: Bangladesh Multi-Sectoral Anticipatory Impact and Needs Analysis, 2020 712 UNICEF, Tracking the situation of COVID-19 713 UNICEF, Tracking the situation of COVID-19 714 NAWG, Coordinated Preliminary Impact and Needs Assessment. Dhaka, 2020 715 Dalberg interviews 716 Dalberg interviews 717 Hindustan Times, Online child sex abuse witnesses a spike worldwide amid Covid-19 pandemic, December 2020
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Home confinement measures and rising household economic stress could have An increased availability and uptake of contributed to exacerbations in mental health issues among children especially online mental health services has been in countries already combating mental health challenges, such as Pakistan, noted across most countries in the region, Afghanistan, Bangladesh, and Nepal. For example, in a small-scale survey of 72 but those without access face risks of children in Afghanistan in May 2020, 74 per cent of the children surveyed further exclusion reflected on their inability to see family and friends to play and learn.718. In Bangladesh, the impact of COVID-19 on child mental health could be amplified by country’s poor gender-based violence record, with 54 per cent of women disclosing physical and/or sexual violence from a partner in their lifetime719, and extremely low mental health coverage, with only 0.1 psychiatrists and psychologist per 100,000 population720. In Nepal, evidence from past crises suggests that mental health outcomes could worsen due to COVID-19: after the 2015 earthquake, Nepalese youths experienced negative mental health outcomes, including post-traumatic stress disorder721 Education Basic education Limited access to remote learning affected basic education in the early months of the pandemic, while rising household economic distress created risks of permanent dropouts. For example, of the nearly 4,000 girls surveyed in Nepal in June 2020, 45 per cent of girls reported that their household income had fallen, a factor that has lead girls to drop out of school even before this crisis; another 16 per cent of the girls surveyed said they had stopped studying at home since school closed in March, meaning they would be hesitant to return to school; 7 per cent admitted that they would probably not return to school when it reopens.722 In Pakistan, modelled estimates show that income losses can likely drive 930,000 children to drop out of school over 2020, an increase of ~4.2 per cent, while school closures will likely result in learning losses of 0.3 to 0.8 years of learning adjusted schooling. / An increased delivery and uptake of digital education through digital platforms was noted in some countries, but the low overall internet penetration in the region threatens to exacerbate the exclusion of vulnerable segments Vocational Education Vocational learning and skill and Training development among youth have largely been overlooked during the pandemic in the region. For example, in Afghanistan, lockdowns resulted in the closure of 300 TVET centres, while apprentices lost training opportunities and livelihoods.723
Primary Healthcare Vaccination Income loss could reduce access to vaccination by increasing indirect and opportunity cost burdens of getting vaccines: vaccination rates in countries like Pakistan have historically been seen to be directly related to household income level.724
718 Save The Children, Children’s reflections on the impact of COVID-19 in Afghanistan, 2020 719 UNFPA, 2020, Violence Against Women - Regional Snapshot 720 WHO, 2020, Global Health Observatory data repository 721 Journal of Adolescent Health, Risk and Protective Factors for Adolescent and Young Adult Mental Health Within the Context of COVID-19: A Perspective From Nepal, 2020 722 Nepali Times, Half of Nepal’s girls may drop out of school, 2020 723 Kabir et al, Multi-modal TVET delivery during COVID-19: Expanding access to continued learning in Afghanistan 2020 724 WHO, 2009
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Endemic / communicable (for countries with high out-of- Caregivers with access to digital platforms disease treatment pocket healthcare expenditure, i.e., have an alternate source of accessing all South Asia countries except the treatment for their children, but those Maldives) without access face risks of further Income loss due to COVID-19 might exclusion reduce access to care provided by the private sector which is usually expensive Maternal and newborn (for countries with high out-of- healthcare pocket healthcare expenditure, i.e., all South Asia countries except the Maldives) Income loss due to COVID-19 might reduce access to care, while opportunity cost burdens of accessing care might also rise
COVID-19 hit South Asia relatively later, beginning its spread in the region in March 2020 and prompting governments to quickly impose strict restrictions to contain the outbreak. In South Asia, the number of COVID-19 cases started to grow rapidly in mid-March. All countries applied extremely stringent lockdown measures in April 2020, and as of November 2020, all, except for Afghanistan, extended or reinstated moderately stringent measures.
The economic impact of COVID-19 on the region is expected to be the most severe in the world, with the IMF projecting an 8.4 per cent contraction of the economy in 2020. The most recent estimates from the IMF, as projected in October 2020, indicate that the COVID-19 pandemic will have reversed economic growth in South Asia, shrinking the region’s GDP by 8.4 per cent in 2020. The most severe economic contractions in the region are projected to be in Maldives (18.6 per cent contraction) and India (10.3 per cent contraction).
Readymade garments (RMG), construction, and wholesale & retail trade have suffered the most severe and sustained impacts from COVID-19 in the region. Major RMG exporting nations, Pakistan, Bangladesh, Sri Lanka, and India, saw declines in export revenues of 20 per cent, 32 per cent, 40 per cent, and 41 per cent, respectively, in H1 2020. Recovery in the sector is expected to be slow due to sustained downturns in global demand. The export of products like face masks increased (e.g., by 700 per cent in Sri Lanka), but this did not compensate for the overall losses in the sector. Similarly, the construction sector in India, Nepal, Bangladesh and Pakistan is expected to have contracted in 2020, leading to 3.5 million and 4.2 million job losses in Bangladesh and Pakistan, respectively, in H1 2020. Furthermore construction-related employment experienced a potential contraction of 11–25 per cent in India in Financial Year 2020-21. In wholesale & retail trade, strict mobility restrictions in most countries led to partial or full closures of retail stores, causing significant job losses. Approximately 1.5 million workers in India and 6 million workers in Pakistan were affected by layoffs and wage cuts in the sector. Although agriculture did not suffer such severe impacts due to government interventions and the essential nature of the sector, it could still have an outsized impact on unemployment. Specifically, agriculture accounts for 42 per cent of all employment in the region and accounts for 57 per cent of female employment in the region. Widespread lockdowns, especially in March and April
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2020, caused major disruptions across the agriculture supply chain. However, the sector did not sustain severe impacts beyond the initial months, due to a rise in demand for staple crops and due to efforts by national governments to mitigate supply chain disruptions to curb food shortages. However, despite relatively lower economic impacts on the sector, the ILO estimated that it contributed to significant unemployment among youth in India, Bangladesh and Pakistan by virtue of its outsized contribution to overall employment in these countries. MSMEs, which employ 70 per cent of the region’s workforce, faced abrupt COVID-19-induced declines in demand and disruptions in operations. MSMEs account for ~70 per cent of all employment in South Asia725 and contribute ~47 per cent of total regional GDP.726 In a September 2020 survey conducted by the ADB,727 72 per cent of MSMEs in Bangladesh, 50 per cent of MSMEs in India, and 38 per cent of MSMEs in Pakistan reported a drop in domestic demand as their top pandemic- related challenge. Disruptions to input supplies were also widespread. In the ADB survey, disruptions in materials was the second most common challenge as noted by 22 per cent of MSMEs in Bangladesh, 35 per cent of MSMEs in India and 27 per cent of MSMEs in Pakistan. These drops in demand and increased operational disruptions depressed MSME sales and caused cash flow shortages. In the ADB survey, 68 per cent of MSMEs in Bangladesh, 54 per cent of MSMEs in India and 40 per cent of MSMEs in Pakistan reported cash flow shortages.728
To cope with the cash flow shortages, MSMEs laid off workers and raised financing, but evidence on the prevalence of wage cuts in South Asia is limited. The ILO estimates that 115 million jobs in the region were lost during the third quarter of 2020.729 Assuming MSMEs contributed a proportion of job losses similar to their proportion of employment, an estimated 80 million MSME jobs in South Asia would have been lost in the third quarter of 2020.730 In addition to laying off workers, MSMEs also attempted to raise financing from institutional and non-institutional sources to meet immediate needs. In the September 2020 ADB survey, taking loans from institutions (commercial banks or microfinance institutions) was the first step reported by a majority of MSMEs in Bangladesh and India. In Pakistan, non-institutional modes of raising finance, such as delaying payments and collecting debts, were the most common actions, with nearly a third of enterprises reportedly taking these steps. Finally, in some countries MSMEs saw wage cuts as a coping mechanism. In India and Pakistan, 17 per cent and 14 per cent of enterprises, respectively, reported considering salary reductions when suffering from cash flow shortages.731
Moreover, given the stringent lockdown restrictions, MSMEs in South Asia pursued diversification of sales, delivery and marketing channels, but still reported extremely high business closure rates. In the region, at the height of the lockdown, in April 2020, 46 per cent of small business reported closures – the highest closure rate in the world. The region’s business closure rates dropped to 25 per cent in August 2020, indicating that small businesses were re-opening, but still, this
725 IFC, MSME Country Indicators, 2014 726 Singh and NA, MSMEs Contribution to Local and National Economy, 2017 727 Sample size: 2,312, with >90% of businesses having less than 100 permanent employees, thus classifying as MSMES 728 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 729 IFC, MSME Country Indicators, 2014 730 These estimates are likely conservative, since the impact on MSME jobs is expected to have been higher than on jobs in large companies. 731 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020
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MSME responses to the pandemic, particularly layoffs and wage cuts (which can lead to sustained household poverty), could exacerbate critical child rights issues in the areas of nutrition, education and child protection. Child undernutrition could be exacerbated in the region. Lower household incomes were projected to push 49 million additional people in South Asia into food insecurity by the end of 2020, while an additional 6.2 million and 0.79 million children are expected to suffer from wasting and stunting respectively by the end of 2022734. In education, closures of schools, including private schools, and limited access to digital tools led to short-term inequities in remote learning access, while declining household incomes and the consequent affordability constraints created long-term risks of permanent school dropouts. Over 147 million children in South Asia were unable to participate in online learning due to COVID-19-related school closures, potentially leading to significant learning losses. Moreover, household-level affordability constraints and discontinuities in learning might lead to permanent school drop-outs in the long run. An estimated 930,000 children in Pakistan and 53 per cent of all female students in Nepal are at risk of dropping out. Similar risks exist in Sri Lanka, although estimates are unavailable. Additionally, increased household stress due to rising poverty may result in the increased prevalence of domestic violence. Reports of increased domestic violence against children during lockdowns have already been reported in Bangladesh and Sri Lanka while anecdotal evidence suggests a rise in child sexual assault.
The provision of primary healthcare in the private sector suffered minimal long-term impacts, suggesting the need for a supported recovery in this sector is limited. The essential nature of these services likely contributed to their quick recovery from supply-side disruptions around the availability of medicines and other healthcare equipment, as well as medical staff, which were the chief constraints faced during lockdowns. Governments across the region prioritized the minimization of movement restrictions on healthcare workers and took steps to ensure their safety. On the demand side, while initial mobility constraints on patients did dampen demand, reports of such a demand downturn were not significantly noted after the initial months of the pandemic, once movement for essential activities started to resume.
COVID-19 has highlighted the importance of strengthening public healthcare systems in the region. There is a high reliance on private healthcare in South Asia, however, people suffering from layoffs and wage cuts may no longer be able to afford exorbitant out-of-pocket costs. In all countries in the region, except the Maldives, out-of-pocket (OOP) healthcare expenditure exceeds 50 per cent of total healthcare expenditure, reaching rates as high as 78 per cent in Afghanistan and 73 per cent in Bangladesh. Moreover, more than 50 per cent of healthcare expenditure takes place in the private sector in all countries (except Bhutan and the Maldives), with the share of private sector healthcare expenditure
732 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 733 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 734 Osendap et al., The potential impacts of the COVID-19 crisis on maternal and child undernutrition in low and middle income countries, October 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 214 being as high as 78 per cent in Afghanistan, 76 per cent in Bangladesh, and 72 per cent in India. This reliance on private sector healthcare has increased in countries such as Bangladesh and Pakistan due to a diversion of public sector resources towards COVID-19 relief. High OOP healthcare spending and high costs of private sector healthcare, combined with declining household incomes due to COVID-19, are likely to create new inequalities or exacerbate existing inequalities in access to healthcare for children in these countries, magnifying the need for comprehensive public healthcare systems.
To alleviate these negative consequences, a multi-stakeholder response that supports the survival and recovery of MSMEs, protects the livelihoods and employment-related rights of workers, reaches vulnerable groups through inclusive business models and promotes collective action will be critical. MSME actions alone cannot mitigate the severe economic impacts of COVID-19 on vulnerable populations. Government action in the form of shorter-term support to MSMEs and longer- term social insurance and assistance systems will be key to supporting incomes as MSMEs struggle. Moreover, ecosystem actors – e.g., governments, investors, regulators and employees – need to both support MSMEs and hold them responsible for the protection of employment- and business-related human and child rights. While government relief efforts in the region have been notable, they have not typically employed a child rights lens or succeeded in reaching the most vulnerable populations (e.g., informal workers).
Governments in South Asia have taken actions to support MSMEs, primarily through debt financing and tax support. Governments in all countries in the region (data not available for Afghanistan) have implemented policies to improve credit availability and liquidity for MSMEs, primarily through measures like new lending, temporary deferral of loan repayments, relief or deferral of corporate or other taxes, and reduction in business costs (e.g., utilities and rent).735,736 In addition to providing cross-sectoral MSME support, in some countries, these measures have targeted sectors that were most affected by COVID-19, e.g., readymade garments (RMG) and leathers in Bangladesh, manufacturing exports and construction in Pakistan, agriculture in India and Pakistan and tourism and apparel in Sri Lanka.737
Governments in India, Bangladesh, Nepal, and Sri Lanka also provided employment support to protect workers, primarily through wage subsidies. Governments in all countries, except Afghanistan, provided subsidised credit for payrolls to help businesses, including MSMEs, pay employee salaries and protect jobs, sometimes targeting specific industries, such as tourism in Bhutan and the export-oriented RMG sector in Bangladesh. Governments in some South Asian countries also actively urged businesses to not lay off workers. In Pakistan and Bangladesh, the governments issued orders for businesses to retain and partially or fully pay workers, while, in India, the government issued an advisory with the same message. Some countries (e.g., Bangladesh, the Maldives and Sri Lanka), created new
735 World Bank, Map of SME-Support Measures in Response to COVID-19, 2020 736 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 737 ILO COVID-19 policy tracker
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 215 initiatives to support self-employed workers, namely, through subsidized credit provision in Bangladesh and the Maldives and through lease instalment moratoriums in Sri Lanka.738 Social assistance programs in all countries extended cash and in-kind transfers, however, the coverage has not been sufficient to fully support households suffering from income loss. Governments in all countries in South Asia (data unavailable for Afghanistan) provided economic relief packages to laid off workers, daily wage labourers and low-income segments. They primarily did so using measures such as direct cash transfers, allowances, in-kind food transfers and utility subsidies. In Sri Lanka and Bangladesh, benefits under existing state social assistance schemes were expanded to provide these economic relief packages. All countries also targeted informal workers through one-off (e.g., in India) or short-term (e.g., in Sri Lanka) cash transfers. Cash-for-work/food-for-work programs, which employed laid-off workers in public works, were also implemented in Afghanistan, Bhutan, India and Sri Lanka. However, gaps in sustained and adequate social assistance remained. In particular, there have been no reports of these benefits being expanded beyond temporary or one-time transfers even though they reached only a minority of informal workers. Moreover, most interventions provided support equal to less than 10 per cent of the monthly income of beneficiary households, and less than 20 per cent for the poorest households.739,740 MSMEs in the region have primarily been concerned with survival during COVID-19 and have taken few actions to voluntarily protect worker and child rights or develop inclusive business models.
738 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 739 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 740 UNESCAP, Social protection response to COVID-19, September 2020
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Economic and Child Rights Impact Snapshot: East Asia Pacific
ROLE OF MSMES IN EAST ASIA PACIFIC IMPACT OF COVID-19 IN EAST ASIA PACIFIC -3.3% expected GDP growth in Southeast Asia in 2020
-7.1% expected GDP growth in the Pacific Islands in 2020 PRE-EXISTING VULNERABILITIES OF MSMES IN EAST ASIA PACIFIC BEFORE COVID-19 31 million High degrees of Limited access to credit and financing, owing to which >50% of MSMEs Jobs temporarily lost in the third quarter of informality in South Asia faced full or partial financial constraints 2020
KEY IMPACTED SECTORS
SHORTFALL IN GOVERNMENT IMPACT OF COVID-19 ON MSMES SUPPORT TO MSMES IN EAST ASIA Tourism IN EAST ASIA PACIFIC Relevance: (accommodation, food services, PACIFIC transportation, storage) Business closures, although at Widespread loss of Inadequate receipt of government relief • 10% contribution to total employment lower rates than in other regions employment • 9% contribution to female employment Economic impact: • 100% lower tourist footfall in Q2 2020 than Q2 2019 in major tourism countries • Expected revenue loss of 32% of 2019 revenue in the Philippines • Expected revenue loss of 45% of pre- COVID-19 projections in Thailand Contribution to youth unemployment due Severe cash flow shortages to COVID-19: • Cambodia: 27%, Philippines: 20%, Vietnam: 14%, Thailand: 11%, Indonesia: 13%, Mongolia: 41%
Readymade garments Relevance: (accommodation, food services, transportation, storage) ROLE OF AND OUTSIZED IMPACTS ON WOMEN IN MSMES IN EAST ASIA PACIFIC
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• Philippines: 17% contribution to total employment, 54% female employment • Cambodia: 7.5% contribution to total employment, 85% female employment Economic impact – decline in revenue: • Vietnam: 20%, Cambodia: 20%, Indonesia: 25%, The Philippines: 40% Contribution to youth unemployment due to COVID-19: (overall textiles sector) • Cambodia: 27%, Philippines: 20%, Vietnam: 14%, Thailand: 11%, Indonesia: 13%, Mongolia: 41%
Figure 65: MSME actions impacting child rights issues in East Asia-Pacific
Observed negative impact Expected negative impact
Observed positive impact Expected positive impact Expected negative impact, but not likely MSME-driven
Economic impact of COVID-19 on MSMEs Layoffs and Disruption in Diversification of sales
wage cuts products and services and delivery channels Nutrition Undernutrition / Income losses reduced the ability of Movement restrictions impacted the The utilization of digital delivery caregivers to afford nutritious food distribution of essential food items for platforms has increased across the region. for their children. In China, 55% of children and led to food inflation, but Caregivers with access to digital platforms surveyed villagers reported that they these impacts were limited to the early have an alternate source of obtaining have reduced their spending on food months of the pandemic. food, but those without access may face in response to income loss, as of mid- The economic impact on undernutrition risks of further exclusion February741; in Indonesia, in a survey was further exacerbated by disruptions of households held from May to June to community-based nutrition 2020, ~78 per cent reported wage programs: for example, in Indonesia, cuts, of which 68 per cent reduced HH programs to promote nutritious diets food consumption to cope with the among children (6-23 months) and shock.742 In a survey of 3,144 school feeding programs have reported households in the Philippines held in 75-100 per cent coverage reductions. 743 May 2020, 33 per cent of households had to skip at least one meal in a week; about 10 per cent had to skip two or more meals in a week. In a survey of 1,101 households in Thailand held from May-July 2020, 52 per cent of respondents reported purchasing food of lesser quality. Child Protection Workplace exploitation While COVID-19 specific evidence is scarce, past experience suggests that children might be pushed into labour
due to household economic distress: for example, a study that details the effects of the 1997 Asian financial crisis on child labour found that in Indonesia, one in
741 REAP China COVID-19 Survey, February 2020 742 World Bank, How hard are families hit by the COVID-19 crisis?, November 2020 743 UNICEF, Tracking the situation of COVID-19
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five poor households reported using child labour as a significant coping strategy.744 Online abuse Experts note rising risks of child online abuse during COVID-19, as abusers seek out alternate sources of income during the pandemic and children spend more time online745. In Indonesia, recent news 747. Recent news articles have reported articles have reported examples of examples of increased online abuse of increased online abuse of children during children during COVID-19.748 COVID-19.746 Mental health / issues Home confinement measures, rising household economic stress, and reduced An increased availability and uptake of access to mental health support likely contributed to exacerbations in mental online mental health services has been health issues among children. For example, a survey on 1,241 students in China noted across most countries in the region, surfaced an increase in suicide attempts of more than 2x, from 3% in November but those without access face risks of 2019 to 6.4% in May 2020, with epidemic-related factors being a major driver749. further exclusion In Thailand, in April 2020, over 70%of children indicated that their mental health has been affected by COVID-19, with their family’s financial status being the top concern.
Education Basic education Limited access to remote learning affected basic education in the early months of the pandemic, while rising household economic distress created risks of permanent dropouts. In the Philippines, national enrollment dipped by 9 per cent as of November 2020, with ~2.3 million children having dropped.750 In Indonesia, 91,000 children stand at risk of dropping out due to rising poverty.In Thailand, COVID-19 resulted in an additional ~170k impoverished children, placing them at high risk of dropping out from school / An increased delivery and uptake of digital education through EdTech platforms was noted across most countries, but efforts to make these platforms widely accessible and affordable are nascent Vocational Education Evidence suggests that business and Training disruptions have impacted TVET education and apprenticeships. For example, in the Philippines, ~75 per cent of apprenticeships and internships were completely disrupted, with majority of surveyed companies discontinuing apprentice wages/stipends.751 Primary Healthcare Vaccination Income loss could reduce access to vaccination by increasing indirect and opportunity cost burdens of getting
744 Idris et al, 2020 745 Dalberg interviews 746 Hindustan Times, Online child sex abuse witnesses a spike worldwide amid Covid-19 pandemic, December 2020 747 Dalberg interviews 748 Hindustan Times, Online child sex abuse witnesses a spike worldwide amid Covid-19 pandemic, December 2020 749 Bai et al, The effect of the COVID-19 outbreak on children’s behavior and parents’ mental health in China, 2020 750 Nortajuddin, More School Dropouts In A Pandemic?, 2020 751 OECD, The Impact Of Covid-19 On Education, 2020
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vaccines: vaccination rates in countries like Indonesia have historically been seen to be directly related to household income level.752 Endemic communicable (for countries with high out-of- disease treatment pocket healthcare expenditure, e.g., Indonesia, the Philippines, Vietnam) Income loss due to COVID-19 might reduce access to care provided by the private sector which is usually expensive; indirect costs, which were estimated to comprise as much as 40% of the cost of HIV treatment in countries like Indonesia, could become unaffordable753 Maternal and newborn (for countries with high out-of- healthcare pocket healthcare expenditure, e.g., Indonesia, the Philippines, Vietnam) Income loss due to COVID-19 might reduce access to care, while opportunity cost burdens, a leading reason for mothers not having accessed maternal care in countries like Indonesia in the past754, might also rise
COVID-19 hit the East Asia and Pacific region in the early months of 2020, but the subsequent regional spread of the virus was relatively slower than in other parts of the world. China was the first country to report COVID-19, and by the end of February 2020, the country reported nearly 80,000 confirmed cases. From March to November 2020, the spread was slow in the region, except in Indonesia and the Philippines, compared to other parts of the world. Most countries in the region implemented moderately stringent measures by April 2020, with many relaxing them in the second half of the year. As of November 2020, only Malaysia, Myanmar and Mongolia still had stringent restrictions in place.
Nonetheless, the pandemic has exerted severe economic impacts in the region, with the GDPs of South-East Asia and the Pacific Islands projected to have contracted by 3.3 per cent and 7.1 per cent, respectively, in 2020, however, economic recovery in China has been quicker than in the rest of the region. The most recent estimates from the IMF, as projected in October 2020, indicate that COVID-19 will have reversed economic growth in Southeast Asia and the Pacific Islands, shrinking the regions’ GDP by 3.3 per cent and 7.1 per cent, respectively, in 2020.755 China is a notable exception. Its
752 WHO, 2009 753 Siregar et al., Costs of HIV/AIDS treatment in Indonesia, 2015 754 ADB, Impact of Maternal and Child Health Private Expenditure on Poverty and Inequity, 2012 755 IMF, World Economic Outlook 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 220 economy showed strong signs of recovery in Q3 2020, registering year-over-year growth of 4.8 per cent, despite a Q1 contraction of 6.8 per cent.756
Tourism-dependent countries saw a complete halt in tourist activity, leading to a severe and sustained impact on the accommodation & food services sector. In the second quarter of 2020, international tourist footfall remained nearly 100 per cent lower in Fiji, Cambodia, the Philippines and Thailand, compared to the same period in 2019. Despite efforts by most countries to ramp up domestic tourism, overall losses in the tourism sector remained pronounced throughout 2020 because there were few signs of recovery in international tourism. For example, in the Philippines, the tourism sector was projected to sustain a loss of as much as USD 2.3 billion (32 per cent of 2019 revenue) in 2020,757 while Thailand was projected to lose USD 47 billion in tourism revenue in 2020 (~45 per cent of pre-COVID-19 projections).758 These losses were largely borne by the accommodation & food services sub-sector, which is a major component of the tourism sector. As a result, this sub-sector is expected to have been a significant driver of COVID-19-related youth unemployment in countries like Mongolia, Cambodia, the Philippines, Vietnam and Lao PDR.
Readymade garments was another significantly impacted sector, as exports from the major producing nations declined substantially in the second quarter of 2020, however China was again an exception. By June 2020, year-to-date (YTD) garment exports from Indonesia and the Philippines fell by ~25 per cent and ~40 per cent, respectively, compared to the same period in 2019.759 In both Vietnam and Cambodia, the magnitude of this decline in exports was ~20 per cent.760 In China, although YTD garment exports fell by ~40 per cent as of June 2020,761 the country’s overall textile exports increased by 32.4 per cent in H1 2020 compared to the same period in 2019,762 as 763 exports of facemasks increased by more than 700 per cent.
MSMEs, which employ 60 per cent of the region’s workforce, faced abrupt declines in demand and disruptions in operations. MSMEs account for ~60 per cent of all employment in East Asia and the Pacific764 and contribute ~55 per cent of the total regional GDP.765 In a September 2020 survey conducted by the ADB,766 75 per cent of MSMEs in Malaysia, 57 per cent of MSMEs in Vietnam, 49 per cent of MSMEs in Lao PDR and Mongolia and 42 per cent of MSMEs in Indonesia reported a drop in domestic demand as their top challenge stemming from the COVID-19 pandemic. Disruptions to input supply were also widespread. In the ADB survey, disruption in material supplies was the second most common challenge as noted by 48 per cent of MSMEs in Malaysia, 35 per cent of MSMEs in Lao PDR and Vietnam, 22 per cent of MSMEs in Mongolia and 15 per cent of MSMEs in Indonesia. These drops in demand and increased operational disruptions depressed MSME sales and caused cash flow shortages. In the ADB survey, 80 per cent of MSMEs in Malaysia, 45 per cent of MSMEs in Lao PDR, 42
756 BBC, China's economy continues to bounce back from virus slump, 2020 757 ADB, The Economic Impact of the COVID-19 Outbreak on Developing Asia, March 2020 758 Bangkok Post, Tourism in Thailand to lose up to $47bn from Covid-19: UN study, July 2020 759 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 760 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 761 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 762 CGTN, China's imports and exports rebound in June as recovery gains momentum, Jul 2020 763 ILO, The supply chain ripple effect: How COVID-19 is affecting garment workers and factories in Asia and the Pacific, October 2020 764 IFC, MSME Country Indicators, 2014 765 Singh and NA, MSMEs Contribution to Local and National Economy, 2017 766 Sample size: 2,312, with >90% of businesses having less than 100 permanent employees, thus classifying as MSMES
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 221 per cent of MSMEs in Vietnam and Indonesia and 37 per cent of MSMEs in Mongolia reported cash flow shortages.767 To cope with the external economic impact, MSMEs trimmed workforces and partially or fully suspended or delayed salary payments; business closures were also reported in the region, but closure rates were some of the lowest in the world. The ILO estimates that 31 million jobs in South- East Asia and the Pacific were lost during the third quarter of 2020.768 Assuming a similar contribution of MSMEs to job losses as to employment, an estimated 19 million MSME jobs in South-East Asia and the Pacific would have been lost.769 Moreover, MSMEs more commonly laid off non-permanent workers. In an ADB survey of MSMEs in Vietnam and Malaysia, 50–60 per cent of MSMEs reported a more than 40 per cent reduction in non-permanent workforce but only 10–20 per cent of MSMEs reported a more than 40 per cent reduction in permanent workforce.770 MSMEs also considered salary delays or reductions in some countries. In the ADB survey, 67 per cent of MSMEs in Malaysia and nearly a third of MSMEs in Vietnam, Mongolia and Lao PDR reported considering delaying worker payments. Meanwhile, 42 per cent of MSMEs in Malaysia, 28 per cent of MSMEs in Vietnam, and 21 per cent of MSMEs in Lao PDR also considered reducing salaries to cope with the cash flow shortages.771 Business closures were reported but were relatively less common than in other regions, with 18 per cent of small business reporting closures at the height of the lockdown, in April 2020, one of the lowest closure rates in the world. The business closure rates in the region dropped to 14 per cent in August 2020, indicating that small businesses have been re-opening, albeit slowly.772
The adoption of digital channels by MSMEs in the region during the pandemic is well evidenced, as COVID-19 accelerated consumer uptake of digital platforms and technologies. MSMEs attempted to cope with this physical closure of businesses by diversifying to digital delivery channels. According to the Global State of Business study, 25 per cent of closed small businesses in East Asia Pacific set up an online presence or website during the pandemic.773
The above-described MSME responses, particularly layoffs and wage cuts, could exacerbate critical child rights issues in the areas of nutrition, education and child protection. Child undernutrition could be exacerbated in the region. Lower household incomes are projected to have pushed 18 million additional people in East Asia Pacific into food insecurity by the end of 2020. At the same time, closures of schools, including private schools, and limited access to digital tools led to short- term inequities in remote learning access, while declining household incomes and the consequent affordability constraints created long-term risks of permanent school dropouts. Over 80 million children in East Asia Pacific were unable to participate in the online learning necessitated by COVID-19 and school closures, potentially leading to significant learning losses. Moreover, 91,000 newly-impoverished children in Indonesia and 170,000 newly-impoverished children in Thailand are estimated to be at risk of dropping out. In the Philippines, national enrolment rates had already declined by 9 per cent (2.3 million children) as of November 2020. Additionally, increased household stress due to rising poverty
767 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 768 IFC, MSME Country Indicators, 2014 769 These estimates are likely conservative, since the impact on MSME jobs is expected to have been higher than on jobs in large companies. 770 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 771 ADB, Impacts of COVID-19 on Enterprises and Farmers, September 2020 772 Facebook, World Bank and OECD, Global State of Small Business Report, 2020 773 Facebook, World Bank and OECD, Global State of Small Business Report, 2020
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 222 can significantly impact child protection, with reports of increases in child mental health issues and child abuse due to the pandemic. In China, suicide rates among children increased by 100 per cent between November 2019 and May 2020, while, in April 2020, 70 per cent of children surveyed in Thailand reported deteriorations in their mental health due to COVID-19. Experts also note rising instances of online child abuse in Indonesia during the COVID-19 pandemic.
Links between MSME responses and obesity, another priority area for the region, have been weak.
The provision of primary healthcare in the private sector was minimally impacted in the long run, suggesting a limited need for supported recovery in the sector. The essential nature of these services likely contributed to their quick recovery from supply-side disruptions around the availability of medicines, healthcare and medical staff. Governments across the region prioritized the minimization of movement restrictions on healthcare workers and took steps to ensure their safety. On the demand side, while initial mobility constraints on patients did dampen demand, reports of this downturn were not significantly noted after the initial months of the pandemic, particularly once movement for essential activities started to resume.
However, the COVID-19 pandemic has highlighted the importance of strengthening public healthcare systems in some countries in the region which are characterized by significant reliance on private sector healthcare and high out-of-pocket expenditure. Out-of-pocket (OOP) healthcare expenditure exceeds 50 per cent of total healthcare expenditure in the Philippines and Cambodia and is at ~45 per cent of total healthcare expenditure in Vietnam. Moreover, in the Philippines, Cambodia and Vietnam, more than 50 per cent of healthcare expenditure occurs in the private sector with the share of private sector healthcare expenditure being as high as 67 per cent in the Philippines. The high OOP healthcare spending and the high costs of private sector healthcare, combined with declining household incomes due to COVID-19, are likely to create new inequalities or exacerbate existing inequalities in access to healthcare for children in these countries, magnifying the need for comprehensive public healthcare systems.
To alleviate these negative consequences, a multi-stakeholder response that supports the survival and recovery of MSMEs, protects the livelihoods and employment-related rights of workers, reaches vulnerable groups through inclusive business models and promotes collective action will be critical. MSME actions alone cannot fully mitigate the severe economic impact of COVID-19 on vulnerable populations. Government action, in the form of short-term support to MSMEs and long-term social insurance and assistance systems, will be key to supporting worker incomes as MSMEs struggle. Moreover, ecosystem actors - e.g., governments, investors, regulators and employees – need to both support MSMEs and hold them responsible for the protection of employment- and business-related human and child rights. While government relief efforts in the region have been notable, they have not typically taken a child rights lens or succeeded in reaching the most vulnerable populations (e.g., informal workers).
Governments in the region have typically adopted multipronged approaches to support MSMEs, including measures to increase credit availability and liquidity, protect employment and provide
Assessing the Impacts of COVID-19 on MSMEs in South Asia and East Asia Pacific in Relation to Child Rights | UNICEF ROSA AND EAPRO 223 targeted sectoral support. Governments in all countries in East Asia Pacific have implemented policies to improve credit availability and liquidity for MSMEs, primarily through measures like new lending, temporary deferral of loan repayments, relief or deferral of corporate or other taxes and reductions in business costs (e.g., utilities and rent).774,775 To support MSMEs in retaining their employees, some countries (e.g., Vietnam, the Philippines and Malaysia) provided cross-sectoral wage subsidies, while some provided sector-specific wage subsidies (e.g., to garments and tourism in Cambodia and to tourism and agriculture in the Philippines). Increased labour-training subsidies were also offered in some countries (e.g., China, Cambodia, Indonesia and the Philippines).776 Some governments implemented programs to aid businesses, including MSMEs, in severely impacted, employment-generating sectors. For example, in the Philippines, fiscal packages were provided for the recovery of the tourism and agriculture sectors, while in Thailand, low interest loans were provided to impacted tourism operators. Social assistance and insurance programs were expanded in all countries, however, coverage challenges related to ineffective payment and registration mechanisms have remained. Governments in all East Asia Pacific countries provided economic assistance packages to laid off workers, daily wage labourers and low-income segments, primarily employing measures such as direct cash transfers, allowances, in-kind food transfers and utility subsidies. Vietnam and Thailand implemented new, state social assistance schemes to provide these economic relief packages. Vietnam also expanded the coverage of existing state social assistance programs. Transfers specifically aimed at informal workers were also reported in some countries in East Asia Pacific, such as Thailand, Indonesia, Papua New Guinea, Timor-Leste, Cambodia and the Philippines. Existing social insurance schemes were leveraged to provide income support to laid-off workers. For example, Thailand, China and Vietnam increased the coverage of existing unemployment insurance schemes. However, gaps in the provision of sustained and adequate support remained. In particular, there have been no reports of these benefits being expanded beyond temporary (e.g., in the Philippines and Thailand) or one-time (e.g., in Malaysia) transfers. Moreover, in most countries (e.g., Indonesia, Thailand and the Philippines) these measures reached only a minority of informal workers since they are not generally registered under state social security schemes, even when provisions exist. MSMEs in the region have primarily been concerned with survival during COVID-19, which limited their efforts to voluntarily protect worker and child rights or develop inclusive business models.
774 World Bank, Map of SME-Support Measures in Response to COVID-19, 2020 775 IPC-IG, Socio-economic impacts of COVID-19, policy responses and the missing middle in South Asia, 2020 776 ILO COVID-19 policy tracker
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