COVID-19 Socio-Economic Impact Assessment
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COVID-19 Socio-Economic Impact Assessment COVID-19 Socio-Economic Impact Assessment Serbia Covid19 Socio Economic Impact Assessment - Sept 2020 1 FOREWORD The year 2020 will be remembered as a turning point in the This report provides a comprehensive overview of COVID- history of modern society. The year when the whole world - 19’s impact in Serbia. It captures the situation in the first six every one of us - was impacted by a crisis that has had far months following the outbreak, based on official data and reaching consequences on our lives, bringing global uncer- specific surveys conducted by UN agencies and other civil tainty and challenges not seen since World War II. sector research. The report serves to inform the choices we make and actions we take in the coming period. These deci- While the coronavirus (“COVID-19”) has brought intense sions will determine the outcome of this pandemic and the suffering to many families and communities in Serbia and development of the region for decades to come. around the world, it has also brought some unforeseen positive side effects, from clear blue skies in dense urban This report is the result of a broad, collaborative effort in- volving UN agencies and programs, the Government of Ser- environments to unprecedented levels of innovation and bia, and representatives of both businesses and civil soci- solidarity. ety. It will be used by the UN family and beyond to identify and propose short and long-term recovery solutions, with We have already learned a lot from this crisis, and we know a focus on the most vulnerable groups and those who risk that it has the potential to induce a change for the better. being left behind. We are at a moment where our collective and individual fu- tures are in our hands, with a once in a lifetime opportunity Globally, the UN has made a concerted effort to support to not just recover but build forward better. countries, Serbia included, in emergency response to COVID-19 and now in preparation for socio-economic as- As we restore health systems, we can simultaneously ac- sessments of its impact. The crisis is not over yet, and we celerate progress towards sustainable development. The will continue to monitor future consequences. crisis has given us good examples, from e-commerce to the widespread emergence of technology-supported work from The UN Secretary General’s Call for the Decade of Action to home and remote schooling arrangements to stronger con- accelerate sustainable development goal implementation nectedness and solidarity among people and communities. resonates now more than ever: we need health security, im- To be able to identify and scale up new solutions we need proved well-being and equality for all, a green recovery and to first understand the impact of the pandemic on people, stronger resilience of society and the economy to future institutions, business, and the environment in which we live. potential shocks. We look forward to working with our partners in Serbia and the region, on our shared response together. Francoise Jacob Francine Pickup United Nations Resident Coordinator in Serbia UNDP Resident Representative in Serbia Contents FOREWORD 1 2 OVERVIEW 5 Social Welfare and Protecting People 24 MAIN FINDINGS 5 INTRODUCTION 24 APPROACH 12 SOCIAL PROTECTION ACTIONS IN RESPONSE TO THE CRISIS 25 1 SOCIAL SERVICES ADMINISTRATION Health First - Impact on Health DURING THE CRISIS 26 Services and Systems 15 ACCESS TO SUSTAINED LEARNING DURING THE CRISIS 29 COVID-19: THE EPIDEMIOLOGIC SITUATION AND SERBIA’S LEARNING FROM THE CRISIS: MULTISECTORAL RESPONSE 15 RECOMMENDATIONS FOR THE PATH FORWARD 30 THE EARLY PHASES OF THE PANDEMIC 16 PROTECTING JOBS, SMALL AND MEDIUM- SIZED ENTERPRISES, AND VULNERABLE THE END OF THE LOCKDOWN PERIOD 19 WORKERS ACROSS THE INFORMAL HEALTH FIRST: PROTECTING HEALTH ECONOMY 35 SERVICES AND SYSTEMS DURING THE CRISIS 20 3 Jobs, Economic Response and Recovery 35 WHAT WAS THE IMPACT OF COVID-19 ON JOBS? 36 WHO SUFFERED THE MOST? 38 A FOCUS ON VULNERABLE GROUPS 40 HOW DID THE ECONOMY RESPOND? 42 4 6 Macroeconomic Response and Covid-19 impact on the Multilateral Collaboration 45 environment and Climate Change 65 THE IMPACT OF COVID-19 ON SERBIA’S SHRINKING BUDGET SPACE MACROECONOMIC FUNDAMENTALS 45 AND DELAYED INVESTMENTS 66 THE CHANNELS OF ECONOMIC CONTAGION 47 IMPACT ON THE ENVIRONMENT AND ENVIRONMENTAL GOVERNANCE 67 THE IMPACT OF THE PANDEMIC ON THE FINANCIAL SECTOR 48 IMPACT ON JOBS AND THE ECONOMY 69 THE GOVERNMENT OF SERBIA’S ECONOMIC RESPONSE 49 References 71 5 ANNEXES 79 Annex 1 - Tables 79 Social Cohesion and Community Resilience 54 Annex 2- Figures 81 IMPACT ON LOCAL COMMUNITIES AND Annex 3 - List of documents and guidelines HOUSEHOLDS 54 that are localized into Serbian language and shared externally 85 RESPONSE BY LOCAL INSTITUTIONS 57 Annex 4 - UN assessments, completed and COMMUNITY RESPONSE 60 on-going 87 GOVERNANCE, FUNDAMENTAL Annex 5 88 FREEDOMS AND THE RULE OF LAW 63 SHORT-TERM ENVIRONMENTAL AND CLIMATE CHANGE IMPROVEMENTS DUE TO COVID-19 65 Serbia Covid19 Socio Economic Impact Assessment - Sept 2020 5 OVERVIEW MAIN FINDINGS In response to the unprecedented global crisis caused by COVID-19, the United Nations (“UN”) mobilized its full There have been two peaks to the COVID-19 out- capacity across countries with a focus on three main ar- break in Serbia, in April 2020 and July 2020, and eas: healthcare response, humanitarian response and so- both have significantly impacted our health, fi- cio-economic response. This socio-economic impact as- nancial security, and the way we live and work. sessment is part of the UN’s socio-economic response and was conducted as part of a broad partnership among the While both outbreaks were contained to relatively manage- UN Country Team in Serbia, under the leadership of the Res- able levels by the Government of Serbia (the “government” ident Coordinator and technically led by the United Nations or the “GoS”) implementing restrictions, there are important Development Program (“UNDP”). ongoing implications of COVID-19 to the Serbian economy and Serbian society. This assessment provides an in-depth overview of the im- pact of COVID-19 on key economic and human develop- ment perspectives: health, social protection and provision Both the economy and society in Serbia were sig- of basic services, jobs and the economy, macroeconomic nificantly impacted by the COVID-19 crisis, but stability, community cohesion, governance and resilience, they did show short-term resilience in being able and the environment. It is framed around the UN Secre- to rebound. tary-General’s framework for an immediate socio-economic response to COVID-19; it promotes more sustainable de- The crisis brought strong year-over-year (“YoY”) contraction velopment and an opportunity to build forward better in of gross domestic product (“GDP”), at its highest at a rate the aftermath of the crisis, with an end goal of accelerating of 6.4% in the second quarter of 2020, and a month-over- achievement of the 2030 Agenda for Sustainable Develop- month (“MoM”) decline of GDP as high as 9.2% during the ment (the “Agenda 2030”). second quarter of 2020 compared to the previous quarter of 2020. A total of 94,100 jobs were lost in Serbia during 2020 and there was a decline in average actual working hours during the week by 7.5% during the second quarter of 2020 The crisis is ongoing, and its outlook remains uncer- compared to YoY levels (SORS, 2020c). As an immediate tain with the socio-economic impacts of COVID-19 reaction to the crisis in March 2020, businesses dismissed evolving. Such circumstances require continuous mostly men (58,400 men lost their jobs during March 2020 monitoring and the ability to quickly respond and compared to 2,500 women), while the second quarter of adapt. This report flags the increased social and 2020 overall saw an opposite trend as businesses adjusted economic risks and vulnerabilities in the country more long-term to the crisis (where, in the second quarter a caused by the COVID-19 crisis. It will be used by the net 34,700 women lost their job compared to a net increase UN family and others to identify and propose short of 1,500 more jobs for men).1 There was a particular drop and long-term recovery solutions and ways forward, in jobs participation rates in the second quarter of 2020, in the spirit of “building forward better.” with 185,200 individuals in the “working age” population re- porting they were either not actively working or not actively looking for a job. While the economy has still not recovered 1 Men represent a predominant part of the labor force in business and infrastructure sectors while women dominate the care-economy and education sectors (SORS, 2019). 6 Serbia Covid19 Socio Economic Impact Assessment - Sept 2020 from the initial shock of the crisis, businesses indicated per person) did not reach all the poor and vulnerable and that they were able to secure their finances to withstand did not include incentives to support environmental pri- the first phase of the crisis, and data regarding industrial orities. Particularly vulnerable populations included infor- production and exports indicate that economic activity has mal workers, small farmers, families with children, single slowly picked up in the May 2020 – July 2020 period. Sim- parents, children, the elderly, and residents of substandard ilarly, the crisis increased the proportion of already vulner- settlements (particularly the Roma population). able populations whose jobs might be significantly threat- ened if the crisis persists, increasing this proportion from 31% pre-crisis to 35% post-crisis. Households have coped The path of social and economic recovery in the during the crisis through various strategies and thanks to years following the COVID-19 outbreak is highly community support, but it is unclear how long they can rely uncertain.