The World Food Programme (WFP) is racing to prevent food shortages in Lebanon as the country continues to reel from the triple shock of the devastating blast in Beirut, economic meltdown and the COVID-19 pandemic.
Speaking in the capital on Wednesday, agency chief David Beasley announced that WFP will deliver 17,500 metric tons of wheat flour and a three-month supply of wheat to help replenish food reserves.
The first wheat flour shipment is expected to arrive within the next 10 days.
Thousands homeless and hungry
“It is hard to comprehend the sheer scale of the destruction caused by the explosion until you have seen it for yourself. I am heartbroken”, Mr. Beasley said after spending three days in Lebanon.
“Today, because of the port explosion, thousands of people have been left homeless and hungry. WFP is racing to provide help for the most vulnerable and to prevent food shortages across the country.”
While in Lebanon, Mr. Beasley visited the Ports of Beirut and Tripoli, witnessing food distributions and the provision of food in communal kitchens run by WFP’s partner, Catholic relief network Caritas.
He also visited injured WFP staff in the hospital and met with President Michel Aoun and top government officials where he stressed the agency’s operational autonomy and neutrality.
Averting potential catastrophe
The WFP assistance is part of a rapid logistics operation that will also involve setting up warehouses and mobile grain storage units.
Lebanon imports nearly 85 per cent of its food and Beirut Port was essential for trade coming into the country.
WFP will also bring in equipment to render the port operational enough so that wheat and other bulk grains can be imported, while a third plane will carry generators and mobile storage units as an immediate solution.
“After examining the port we feel confident that we can establish an emergency operation very soon,” said Mr. Beasley. “There’s no time to waste as we are looking at a catastrophe in the making if we do not get food in and get this part of the port operational again.”
Sebastian Eckardt, Ekaterine Vashakmadze, Luan Zhao China Daily
The new decade started with an unexpected and dramatic turn. As countries around the world continue to grapple with the COVID-19 pandemic, the global economy is projected to experience the deepest recession in eight decades, and the outlook remains highly uncertain. In China, growth is projected to slow to 1.6 percent this year – marking the slowest expansion since 1976. While economic activity in China has started to rebound, the shock will leave lasting impacts on the economy, confronting China with new challenges while aggravating pre-existing ones.
Amid this downturn, the pace of China’s poverty reduction is expected to slow, reflecting labor dislocation and slower growth in household incomes. Without additional policy measures, 8-20 million fewer people are projected to escape poverty in 2020 (based on the World Bank $5.50/day poverty line), compared to pre-pandemic projections. Self-employed workers and those in less secure, informal jobs, particularly migrant workers, have been especially hard hit and inequality may rise unless policies mitigate these social impacts.
Debt levels — already elevated before the crisis — have increased sharply and eroded deleveraging gains made over the past two years. The confluence of a collapse of corporate profits, rising unemployment, and lost income has elevated credit risks in Chinese banks, and asset quality will likely deteriorate, especially when regulatory forbearance is tightened.
The shock may also accelerate the secular deceleration of China’s medium-term potential growth. Over the last decade China’s economy has gradually slowed, reflecting a combination of weaker productivity growth and changing demographics. History suggests that shocks of the magnitude of the COVID-19 induced slowdown will leave the economy scarred. Investment growth will likely decelerate, and some job losses will be permanent because labor-intensive sectors, such as tourism, hospitality and traditional retail are unlikely to fully recover to pre-crisis levels.
Good policies can mitigate some of these impacts. In the short-run monetary and financial sector policies will need to remain flexible to ensure abundant liquidity to keep market rates and bond yields low, easing the debt burden on households, firms, and governments. Declining inflation creates ample room for keeping monetary policy accommodative without triggering inflation risks and/or capital outflows. While ensuring that the flow of credit to the real sector is not impeded, financial risks would need to be managed carefully and policy makers will need to prepare to resume their focus on deleveraging and de-risking the economy once activity has normalized and confidence has been restored.
Given the risks and limitations of a credit-fueled recovery, fiscal policies will need to play a bigger role in supporting the recovery than in past cycles. But fiscal stimulus measures should be designed in a way that contributes to achieving more inclusive and greener growth over the medium-term. Specifically, policy makers should aim at closing the gaps in China’s social protection coverage, building on the expansion of the system in response to the pandemic. This would not only help protect workers and households from the distress caused by job and income losses but also mitigate lasting weakness in private consumption. Meanwhile, public investment programs should be designed so that they accelerate the transition towards a carbon-neutral, cleaner, and greener economy.
Structural policies should focus on enabling the reallocation of resources and facilitating adjustments to post-pandemic economic realities. Businesses may require continued support to prevent a surge in pandemic-induced bankruptcies and job losses. However, as the economy recovers, financial lifelines to firms will need to be unwound. Especially if corporate distress reflects deeper underlying solvency rather than temporary liquidity issues, including over-leveraged balance sheets, bankruptcy proceedings may be the appropriate strategy. Further market reforms in areas such as land, capital and labor markets as well as steps to improve the business environment would help create conditions for a stronger, more job-intensive recovery. Reforms to address barriers to labor mobility and to equitable access to social services, including further liberalization of the hukou system, and job search and upskilling support for the unemployed would facilitate movement of labor from firms and sectors suffering more persistent damage to expanding sectors, firms, and locations.
Finally, the pandemic has revealed shortcomings in disease surveillance and control. The crisis has increased the urgency of closing these gaps by moving decisively towards stronger multi-sectoral cooperation in mapping and reducing public health risks, active case-based surveillance and timely reporting, improved surge capacity, and strengthened international collaboration.
In sum, China’s recovery strategy needs to be forward-looking. The pandemic shock has exposed deeply connected economic, social, and environmental fragilities, making China’s objective of rebalancing the economy toward more inclusive, sustainable, and greener growth more urgent than ever. The recovery offers an opportunity to accelerate China’s progress towards these goals.
(Sebastian Eckardt is the World Bank lead economist for China, Ekaterine Vashakmadze and Luan Zhao are senior economists of the World Bank.)
“Pink Tariffs” and Other Trade Barriers Are Obstacles to Better Jobs, Wage Equality
WASHINGTON, July 30, 2020 — Trade increases women’s wages and helps close the wage gap between men and women while creating better jobs for women, a new World Bank Group report concludes. Countries that are open to international trade tend to grow faster, innovate, improve productivity, and provide higher income and more opportunities to their people. Countries that are more open to trade, as measured by the trade-to-GDP ratio, have higher levels of gender equality.
The report, produced in collaboration with the World Trade Organization, marks the first major effort to quantify how women are affected by trade using a new gender-disaggregated dataset. The dataset, developed by the World Bank Group, allows researchers to understand how women are employed, in which industries they work, how much they earn, and whether or not they are involved in global trade. This analysis helps governments see how trade policies can affect women and men differently.
“Over the past 30 years trade has been the engine of poverty reduction. This report shows that, provided the right policies are in place, it can also provide an engine to reduce the gender gap,” said World Bank Managing Director Mari Pangestu.
“Trade can expand women’s role in the economy and decrease disparities with men by giving women more and better employment opportunities. Seizing these opportunities will be even more important in a post-COVID-19 world.”
The report, Women and Trade: The Role of Trade in Promoting Women’s Equality, offers several key findings. Firms that are part of global value chains (GVCs) employ a greater percentage of women (33 percent) relative to non-GVC firms (24 percent). When countries open themselves to trade, women’s share of wages in the manufacturing sector increase by 5.8 percentage points on average. When women are employed in sectors with high exports, they are more likely to be formally employed. Formal employment means better job benefits, training, and job security.
The report also highlights the importance of addressing discrimination against women in trade policy. Although no country overtly imposes tariffs according to gender, implicit biases can amount to “pink tariffs” that put women at an economic disadvantage. The report shows that products specifically consumed by women face a higher tariff burden than men’s products. In the textile sector, for instance, tariffs on women’s apparel are US$2.77 billion higher than on men’s clothing, a consumption gap that grew about 11 percent in real terms between 2006 and 2016. Disparities like this can hurt women consumers all over the world.
Targeted policies can help women maximize the benefits of trade. These include removing trade barriers that impede women’s access to international markets and improving women’s access to education, financial services, and digital technologies. Governments can design trade facilitation measures that remove gender-specific barriers to trade. These measures could address burdensome customs requirements, limited access to trade finance, and exposure to extortion or physical harassment at borders.
WASHINGTON, July 27, 2020—The African Continental Free Trade Area (AfCFTA) represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion, a new World Bank report has found. If implemented fully, the trade pact could boost regional income by 7% or $450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035.
The report suggests that achieving these gains will be particularly important given the economic damage caused by the COVID-19 (coronavirus) pandemic, which is expected to cause up to $79 billion in output losses in Africa in 2020. The pandemic has already caused major disruptions to trade across the continent, including in critical goods such as medical supplies and food.
Most of AfCFTA’s income gains are likely to come from measures that cut red tape and simplify customs procedures. Tariff liberalization accompanied by a reduction in non-tariff barriers—such as quotas and rules of origin—would boost income by 2.4 percent, or about $153 billion. The remainder—$292 billion—would come from trade-facilitation measures that reduce red tape, lower compliance costs for businesses engaged in trade, and make it easier for African businesses to integrate into global supply chains.
Successful implementation of AfCFTA would help cushion the negative effects of COVID-19 on economic growth by supporting regional trade and value chains through the reduction of trade costs. In the longer term, AfCFTA would provide a path for integration and growth-enhancing reforms for African countries.
By replacing the patchwork of regional agreements, streamlining border procedures, and prioritizing trade reforms, AfCFTA could help African countries increase their resiliency in the face of future economic shocks.
“The African Continental Free Trade Area has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans,” said Albert Zeufack, the World Bank’s Chief Economist for Africa. “The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers –women and men, skilled and unskilled—across all countries and sectors, ensuring the agreement’s full benefit.”
According to the report, the agreement would reshape markets and economies across the region, leading to the creation of new industries and the expansion of key sectors. Overall economic gains would vary, with the largest gains going to countries that currently have high trade costs. Côte d’Ivoire and Zimbabwe—where trade costs are among the region’s highest—would see the biggest gains, with each increasing income by 14 percent. AfCFTA would also significantly boost African trade, particularly intraregional trade in manufacturing. Intra-continental exports would increase by 81 percent while the increase to non-African countries would be 19 percent.
Implementation of the agreement would also spur larger wage gains for women (an increase of 10.5 percent by 2035) than for men (9.9 percent). It would also boost wages for skilled and unskilled workers alike—10.3 percent for unskilled workers, and 9.8 percent for skilled workers.
This report is designed to help countries implement policies that can maximize the agreement’s potential gains while minimizing risks. Creating a continent-wide market will require a determined effort to reduce all trade costs. This will require legislation to enable goods, capital, and information to flow freely and at easily across borders. Countries that do so will be able to attract foreign investment and increase competition that can increase productivity and innovation by domestic firms. Governments will also need to prepare their workforces to take advantage of new opportunities with new policies designed to reduce the costs of job-switching.
World Bank Group COVID-19 Response
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.
The EU supports Member States in organizing the repatriation of EU citizens from across the world, wherever they may be.
Once a Member State activates the EU Civil Protection Mechanism, the Commission’s Emergency Response Coordination Centre coordinates repatriations closely with Member States. The Commission can co-finance up to 75% of the transport costs. Non-EU citizens can also benefit from this assistance.
Click here for a detailed list of past repatriation flights under the Mechanism.
Click here for more information on our Crisis Management and Solidarity.
This morning an EU Humanitarian Air bridge flight landed in Beirut, Lebanon, delivering over 17 tonnes of humanitarian supplies, medicines and medical equipment.
The transport cost was fully covered by the European Commission while the cargo was procured by the EU’s humanitarian partners, UNICEF and Médecins du Monde.
The urgently needed materials will help ensure health access for the most vulnerable following the explosion at Beirut port and the coronavirus pandemic.
The European Union continues to deliver emergency support to the Lebanese people. This Air Bridge flight will boost medical supplies to support the local healthcare system, bringing aid to those most in need
Janez Lenarčič, Commissioner for Crisis Management
This humanitarian support comes on top of the EU’s emergency response following the devastating explosions in the capital Beirut on 4 August that put an additional strain on the Lebanese health system, which was already stretched due to the coronavirus pandemic.
In the immediate aftermath of the blasts, 19 countries offered specialised search and rescue, chemical assessment and medical teams as well as medical equipment and other assistance through the EU Civil Protection Mechanism.
The coronavirus pandemic has taken a drastic human toll, with close to 15 million confirmed cases of COVID-19 and over 600,000 deaths around the world by mid July.
As the geography of the outbreak continues to shift, new hot spots are emerging in developing countries – including in Latin America and South Asia – as well as worrying trends in parts of Africa.
Second-wave outbreaks are also appearing in areas that had seen progress.
On all these fronts, the World Bank Group is committed to doing all we can to help. We recognize that the massive scale of the COVID-19 pandemic demands a truly exceptional response. Already we are working with over 100 low- and middle-income countries to bolster their health systems and broad-scale pandemic response as well as lay the groundwork for recovery.
“We plan to provide up to $160 billion in financing from April 2020-June 2021, for mitigating the health emergency as well as dealing with the economic and social impact of the crisis.”
This effort involves all the Bank Group’s financing arms, with about 2/3 of this financing from the public sector arm – IBRD/IDA – and the rest from the private sector arm, IFC and MIGA.
As I outlined in a recent blog, there are four priorities for the broad, fast action that the World Bank Group has underway: saving lives threatened by the pandemic; protecting the poor and vulnerable; helping save jobs and businesses; and working to build a more resilient recovery. These priorities are outlined in our operational approach to the COVID-19 crisis, entitled Saving Lives, Scaling-up Impact and Getting Back on Track. I encourage everyone to explore this paper in depth, and I’d like to highlight a few key points here.
At the international conference on assistance and support to Beirut and the Lebanese people, the European Commission has pledged a new funding worth €30 million to help address the immediate needs of those affected by the deadly explosion in Beirut on 4 August. This comes on top of the €33 million already announced by President von der Leyen in her phone call on Thursday with the Lebanese President.
Representing the European Commission at the conference today, Commissioner for Crisis Management Janez Lenarčič said: “The EU has been helping Lebanon since immediately after the explosion, mobilising hundreds of search and rescue experts and sending medical aid to Beirut. I thank all European countries that have put solidarity into action. As needs rise we are providing humanitarian support to hundreds of thousands of the most vulnerable people. In these critical hours, the EU is providing shelter, emergency healthcare, water and sanitation, and food assistance. We are committed to stand by the people of Lebanon today and in the long term to help them recover.”
The new EU humanitarian funding will be channelled to UN agencies, NGOs and international organisations, and be strictly monitored. This assistance will benefit hundreds of thousands of the most affected people to cover essential needs.
The EU is a leading supporter of Lebanon, providing over €2.3 billion of assistance since 2011, including over €660 million in humanitarian aid.
EU emergency response in Beirut, Lebanon
Today’s funding comes on top of ongoing EU emergency operations, which include:
Some 300 highly trained experts from the EU and its Member States were deployed through the EU Civil Protection Mechanism, including search and rescue, chemical assessment and medical teams
in-kind assistance consisting of urgently medical equipment and supplies, chemical protection suits
a military vessel with helicopter capacity for medical evacuation, and medical and protective equipment
the activation of the Copernicus Satellite mapping system to help assess the extent of the damage
The new EU support announced today follows the letter of the President of the European Council Michel and President of the Commission von der Leyen to EU Member States where they encouraged them to intensify support to Lebanon, in short term emergency and humanitarian aid but also in the longer-term reconstruction of the country.
The EU institutions stand ready to ensure the synergy of the aid that the EU and Member States are going to provide through a coordination mechanism that the EU institutions will put in place.