8 September 2020
UNCTAD Report Details Economic, Social Impacts of COVID-19
Photo by Lynn Wagner
story highlights

COVID-19 is “not only a health crisis, but also a job and livelihoods crisis” that affects SDG progress.

The report emphasizes realization of the gender-related aspects of the 2030 Agenda “are at risk” while citing “observable positive effects” on levels of carbon dioxide emissions and the quality of air, soil, and water.

Government interventions and significant reform of the multilateral trading system offers an opportunity to pivot towards long-term growth and sustainable development.

A report from the UN Conference on Trade and Development (UNCTAD) Secretariat finds that the COVID-19 pandemic is likely to “reverse much of the economic and social progress already made” towards SDG achievement. However, government interventions and significant reform of the multilateral trading system would offer an opportunity to pivot towards long-term growth and sustainable development.

The report titled, ‘International Trade and Development,’ finds that economic and social disruptions caused by COVID-19 have resulted in about USD 6 trillion in losses in global trade, approximately 50% larger than the decline in trade that occurred during the 2008 recession. Economic disruptions have affected some sectors more than others, particularly the automotive, textiles and apparel sectors, the tourism sector, and various machinery sectors. The decline in crude oil prices has resulted in a “drastic drop in export revenues” for oil exporters, and sustained low oil prices may affect renewable energy development, as consumers have less incentive to switch from fossil fuels to renewables.

The exponential increase in women’s care work is moving women from stable, protected jobs to more informal jobs.

COVID-19 is “not only a health crisis, but also a job and livelihoods crisis” that impacts SDG progress, the authors assert. Absolute falls in export earnings affect the capacity of LDCs to achieve the SDGs overall and to achieve SDG target 17.11, to double their share of global exports by 2020. The COVID-19 pandemic has exacerbated inequalities (SDG 10) and significantly affected female-intensive economic sectors (SDG 5), such as the garment sector, pushing female workers towards extreme poverty (SDG 1).

The report emphasizes that the realization of the gender-related aspects of the 2030 Agenda “are at risk.” The economic crisis disproportionately impacts women in several ways outlined in the report, including an “exponential increase in the time women devote to care work,” which affects their ability to keep jobs or remain engaged in full-time employment. The result is to move women from stable, protected jobs to more informal jobs. In addition, countries with reporting systems have reported a surge in domestic violence against women.

On the environment-related SDGs, the pandemic has had “observable positive effects” on levels of carbon dioxide (CO2) emissions and the quality of air, soil, and water. Fish exports may be “reduced by about one-third in 2020.” The report further suggests a possibility to combine solutions to climate change and COVID-19 into a coherent response. Still, the pandemic has also resulted in negative environmental impacts, including increased volumes of un-recyclable waste, a halt in maintenance and monitoring of natural ecosystems, and disruptions in markets and value chains for biodiversity-based goods and services.

Macroeconomic income shocks from COVID-19 are predicted to affect food security. Therefore, the report recommends encouraging domestic food production and shorter regional food value chains to ensure that in the future, food security is not overly dependent on international markets and to reduce the carbon footprint of global food value chains. 

The COVID-19 crisis has accelerated the uptake of digital technologies, which have been a “critical tool in maintaining business and life continuity” and allowed for increases in telework, telemedicine, and online education. The Government of Senegal, for example, has facilitated and created an e-commerce platform for easy access to websites of small and medium-sized enterprises (SMEs) selling essential goods, which has allowed business to continue operating.

The report recommends reconstructing a multinational trading system through World Trade Organization (WTO) reform that delivers negotiated outcomes and contributes to post-crisis recovery and longer-term development. In line with SDG target 17.10, the report calls for a universal, rules-based, open, non-discriminatory and equitable multilateral trading system. The report suggests that one area of reform could be the principles of special and differentiated treatment for developing countries, by replacing the practice of self-declaration of developing country status with objective criteria such as level of per capita income and share in world trade.

Overall, the report concludes that the pandemic risks reversing most SDG progress, but government response interventions and multilateral trading system reform offer an opportunity for global trade and national economies to pivot towards a path of long-term growth and sustainable development.

The UN General Assembly (UNGA) requested UNCTAD to prepare the report in its resolution 74/201. [Publication: International Trade and Development (A/75/225)] [UNGA Resolution 74/201]

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