Economic recovery from Covid-19 - Lessons from South Africa

Four billion lives and livelihoods at stake The COVID-19 pandemic is “by far the worst modern economic crisis”,  said International Labour Organization’s director-general Guy Rider at a conference on Covid-19 and social inequalities, co-hosted with Geneva’s SDG Lab on Tuesday. While the rich will surely recover, what about the 4 billion people without social protection, including 1.6 billion living off the informal economy?

“It’s not so much about having a job...It has to be a future where there are jobs with rights, and jobs that are paid. This is what we are looking for. We need to build back better with quality and sustainability...We need a new paradigm,” said Alicia Bárcena Ibarra, executive secretary of the Economic Commission for Latin America and the Caribbean.

Covid-19 recovery through transformation of the informal economy When governments offer formal work opportunities to people dependent on insecure day labour jobs, this can help families make a big leap out of poverty, said Kate Philip, of South Africa’s Presidential Youth Employment Initiative, one member of the panel that also included speakers from Europe, Latin America and the Middle East.

How South Africa hit a few birds with one stone - public employment

Ever since the HIV epidemic, public employment programmes in South Africa became ‘really important”, said Philip. By formalizing sectors such as nursery schools and home-based care, more and more people have gained access to employment contracts, minimum wages, and decent working conditions.

“Public employment was one of the social and economic instruments that was used to support vulnerable communities...”

Given the pre-existing networks of public employment programmes, it was comparatively easier to hire more community health workers as the Covid-19 pandemic spread to South Africa, said Philip. Workers were quickly mobilized to support testing, tracing and isolation efforts. Despite having the highest number of reported infections on the continent (55,421 to date), South Africa has had only about 1,200 deaths, below the mortality rates seen in China and many European countries. Although South Africa also has a younger population, the data reflects the nimble health system response.

Bold, people-oriented policies ward off poverty

As with other historic shocks, such as the Great Depression of the 1930s, public employment schemes can be a centerpiece of bolder, more people-oriented labour policies, forging new economic opportunities out of the Covid-19 crisis. Says Philip:

“What is really alarming about the world today is the lack of universal social protection. If your job simply stops because of a lockdown if you get sick, you've got nowhere to go. You have no recourse...We [need] a ‘new normal’, where people are at the center of that better normal.”

Stories from Latin America and Portugal

In 2010, austerity measures ‘severely retarded’ recovery from the worldwide crash of 2008 , said the ILO’s Ryder. Political will is “obviously necessary” to adopt smarter alternatives today.

Since the pandemic began, some ‎‎US $ 9 trillion has been invested in fiscal and monetary stimulus, said Ryder, but “very little” has been funneled where it is most needed - mainly social protection and health. Before COVID-19 hit, almost 60% of Latin American employees had no health insurance and only 1.3% of GDP was earmarked for social protection in the region, said Alicia Bárcena Ibarra, executive secretary of the Economic Commission for Latin America and the Caribbean.

Social inclusion is also critical, said Henrique Barros, Portugal’s National Health Council head…Governments can learn from Portugal’s experience, where “all immigrants and migrant workers” have access to the same rights as everyone else - health, social support, employment and housing.