Socioeconomic impacts of COVID-19

Socioeconomic impacts of COVID-19 September 2020

Asia(Cambodia, Laos PDR, Myanmar, Philippines and Vietnam)

SOCIOECONOMIC IMPACTS OF COVID-19 1

By Sara Awad and Alexandra Konn

Central Highlands of Vietnam

CESO gratefully acknowledges financial contributions from Global Affairs Canada

Foreword

The COVID-19 pandemic currently represents the greatest challenge our world has faced since the Second World War. In less than a year, the pandemic has profoundly changed daily lives across the world, forcing the majority of people to adopt a new way of life both physically and mentally. The global spread of the virus has overwhelmed health systems and caused widespread social and economic disruption that will leave deep scars. This crisis is expected to hit developing countries disproportionately in the longer term.

In May 2020, CESO’s Program Development and Learning team initiated this research to document the social and economic impacts of COVID-19 across a number of countries where CESO has ongoing initiatives. While the key goal of this report is to contribute to informed strategy development in CESO’s project AWE (Accelerating Women’s Empowerment) funded by Global Affairs Canada. The study may also provide useful insights to the general public, particularly students, researchers, practitioners, business leaders and policy makers who are engaged or could potentially become more engaged in the area of international development.

This is one of five reports published to encapsulate the key findings of the research. In this report, we provide an analysis of the social and economic impact of COVID-19 in Cambodia, Laos PDR, Myanmar, the Philippines and Vietnam. Here, we explore the impact of the pandemic on gender equality, environment, agribusiness, tourism and hospitality. These are key sectors and thematic areas where CESO aims to support people, businesses and other institutions to adapt, innovate and recover.

An in-depth review and analysis of news, articles and journals published in international, regional and national publications forms the key pillar of this research. These findings have been triangulated and further elaborated with insights from AWE staff members and partners from across different countries.

This research has involved the collection and application of a depth of primary data with support of CESO staff members and partners from across different countries. The guidance from the management of CESO’s International Services team and technical specialists enabled the researchers to identify high priority practical areas to explore during the study. CESO appreciates the valuable advice from its expert volunteers who have supported the research in its critical milestones. Special thanks goes to the internship program of the Munk School of Global Affairs and Public Policy at the University of Toronto, which provided key support in research design, coordination and compilation.


Introduction

Because of the high population density, many Asian countries were initially hit hard by the virus. The International Monetary Fund (IMF) has estimated a drastic slowdown in the economic growth that developing countries in Asia have experienced in the past decade –a fivefold decrease from 2019 to 2020. The COVID-19 pandemic has primarily affected Asian countries through its negative impact on the manufacturing, retail (textiles), trade, construction, and tourism sectors. Micro, Small and Medium Enterprises (MSMEs) in particular are heavily affected due to their prevalence in these sectors. As they represent considerable sources of employment, job loss has been significant.

Women in Asia are particularly vulnerable to the socio-economic impacts of COVID-19 due to their prevalence in the informal sector and in MSMEs in the most affected sectors. Within the informal sector, women typically work as street vendors, migrant domestic workers, homeworkers, or in the entertainment industry – this type of work relies on person-to-person interactions and is therefore severely impacted by social distancing requirements.

Agribusiness will be hit hard as labour shortages, supply chain bottlenecks, and decreased demand make it so that farmers and all those involved in the food supply chain are no longer able to sustain livelihoods. Women make up significant parts of production, processing and the selling of products in the agribusiness sector in these countries and are therefore vulnerable to the impacts of the pandemic. Travel restrictions and regulations have also created problems in accessing field labour and transporting produce from farms to markets.

Tourism, a major source of revenue and jobs according to the International Labour Organization, is a critical piece of the IMF predictions of stalled economic growth in the Asia-Pacific region. Laos, Vietnam, Cambodia, the Philippines and Myanmar all experienced significant losses in the tourism sector. In Cambodia, Angkor Wat, the country's largest tourism draw, experienced a 99.6% decrease in tourists in the month of April, and a 45.6% decline in the first four months of 2020. Women are more represented in the tourism and hospitality sector than men and are therefore more likely to feel the negative impacts of COVID-19. In Laos, for example, women make up 63% of the sector's workers. Furthermore, 40% of employees who were laid off were women, compared to the 34% of laid of employees who are male.

If the pandemic is adequately contained within a year, the IMF expects growth in Asian developing countries to rebound up to 8.5% in 2021. The response by Asian countries has included shutting down travel; surveillance, monitoring, tracing and isolation of those with the coronavirus; as well as lockdowns. Additionally, measures to address the socio-economic impacts have been implemented. In Laos, the government introduced a ten-measure economic stimulus package and established a task force with the purpose of identifying and addressing these impacts. In Cambodia, a ‘cash for work’ program was implemented to provide income for employees who lost their jobs. Vietnam, praised for its handling of the virus, focused on economic mitigation packages but also on innovation, funding national research institutions, swiftly approving test kit applications, and enabling domestic firms to repurpose and produce personal protective and medical equipment that meet quality and quantity standards.


Cambodia

The impacts of COVID-19 on Cambodia’s economy have been significant – incomes are falling, and poverty is rising according to the UNDP. The main drivers of these impacts are

external demand shocks to some of Cambodia’s most critical sectors such as tourism and textiles. As more than 80% of garment workers are women, the reduced demand from northern countries is affecting this group more severely. These women are at risk of losing their jobs or subsisting off government subsidies or half of their wages if factories operate at half capacity, increasing the likelihood of them not being able to meet their financial responsibilities such as rent or repaying their microfinance loans. Cambodia’s large poor population and limited social safety net amplify its economic vulnerabilities to the COVID-19 pandemic.

Agribusiness

According to the World Bank’s Cambodia Economic Update, the agribusiness sector provides livelihoods for most of the poor and has only recently begun to expand again after an extended two year drought that drastically reduced rice production, the majority of agricultural activity in Cambodia. The government has put considerable efforts in diversifying and expanding the agricultural sector. Yet, the outbreak of COVID-19 has shown that more needs to be done in order to address the heightened risk of poverty facing particularly migrant workers returning from Thailand and the laid-off workers in the tourism and garment sectors. Efforts towards developing the agribusiness sector would reduce the amount of rural poor, provide alternative sources of livelihoods, and reduce the reliance on imported food commodities that may be disrupted as a result of travel restrictions.

According to the World Bank, around 75% of the women in Cambodia are employed in the agribusiness sector, in production, processing, and trade of agri-products. This representation is primarily due to the high amount of male migration outside of Cambodia to find employment, leaving women with the majority of the farming responsibility. The impact on agribusiness then, will fall heavily on women. The Food and Agriculture Organization (FAO)


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reports that the production of crops may be affected by travel restrictions, citing inadequate agricultural inputs for next season. This could result in reduced income and may force households to take out microloans, putting them at risk of falling into a debt trap. In addition to decreases in sales and thus income, a decrease in production could cause women to reduce their consumption and increase the food insecurity of their households.

The fisheries sub-sector is hit hard by the COVID-19 pandemic. Reduced demand for fish resulting from movement restrictions and supply chain disruptions are creating challenges for those employed in the sector. One women, Huon, reports making approximately half the daily income she made before the pandemic arrived in Cambodia. Storing fish is not an option for many as ice and refrigeration are expensive and excess water is not available amid an impending water crisis. According to the United Nations Environment Programme, cost-effective renewable energy could provide a lifeline for fish sellers like Huon by allowing them to recover from the pandemic in a way that also prepares them for future climate events.

Working with Cambodian Ministry partners, the International Fund for Agriculture Development (IFAD) is responding to these needs with a two-fold approach. The objectives are to address the economic needs of rural households and returning migrant workers while providing support for enhanced production and value chain connection to ensure diversified nutritious options and efficient food production. The latter objective includes supporting commodities with short production cycles by providing seeds, fertilizer and irrigation support to ensure that supply shortages can be addressed. Additionally, the Agricultural Services Program for Innovative, Resilience, and Extension (ASPIRE) project, supported by IFAD, is working to ensure a sustained nutritious diet for Cambodia through maintained production of nutritious diet components like chicken eggs and green vegetables. IFAD is working to develop digital tools, including online farmer diaries and interactive maps, to ensure that value chains are not disrupted. These measures will work to reduce the potential food insecurity that may arise from food import disruptions and expand the agribusiness sector’s capacity to absorb some of the newly unemployed.

Tourism & Hospitality

The tourism sector in Cambodia is a significant part of national Gross Domestic Product (GDP) – contributing approximately 18.7% to growth in 2019. However, since the COVID-19 pandemic started in March 2020, Cambodia’s tourism and hospitality industry have been struggling. Angkor Wat, the largest tourism draw, experienced a 99.6% decline in tourists in the month of April, and a


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45.6% decline in the first quarter of 2020, according to the World Bank. The tourism and hospitality sector directly employs approximately 600 000 to 800 000 people. Hotel, restaurant, and shop owners in Siem Reap, a resort city near Angkor Wat, have had to close their businesses, and almost everyone in the industry is facing uncertainty about their economic future. Women are hit hardest when clubs, bars, and restaurants close as they make up the majority of the entertainment and hospitality industries. Women are already reporting to be facing food insecurity and are experiencing evictions as they are no longer able to afford their rent without an income.

For the entertainment sector, there was no compensation given to employees who suddenly lost their jobs and they have no guarantee of a job when the sector reopens. The tourism sector received tax breaks from the government along with a small wage subsidy for those who lost their income. However, many within the industry are unsure if their businesses will survive much longer without any tourists.

In a survey of experts by the United Nations World Tourism Organization (UNWTO), domestic tourism was widely agreed upon to start its recovery by September, while recovery for international tourism may not take place until 2021. When these industries begin to recover will determine how many businesses remain afloat in the tourism and hospitality industry, and how many will be forced to abandon this source of livelihood and search for another.

National Response

At the national level, Cambodia is responding to the COVID-19 pandemic through a number of measures intended to alleviate the socio-economic impacts. According to the IMF, the government is providing income support and a ‘cash for work’ program to garment workers and other employees who lost their jobs. The government is also providing grants and subsidies for wages and health/employment insurance to households as well as tax concessions, and credit and expenditure support for impacted businesses. Additionally, the Cambodian government is dispensing low-interest loans for small and medium sized enterprises and those involved in the agricultural sector.

International Response

The international response to the COVID-19 pandemic in Cambodia is extensive. Assistance is being delivered through the UNESCO, UN, UNDP, and the World Bank.

In Cambodia, UNESCO is contributing to the five pillars of the ‘United Nations Framework for the immediate socio-economic response to COVID-19: Shared responsibility, global solidarity and urgent action for people in need.’ These pillars are: 1) health first; 2) protecting people; 3) economic response and recovery; 4) macroeconomic response and multilateral collaboration; and 5) social cohesion and community resilience. The third pillar involves protecting jobs and small and medium as well as informal sector workers. UNESCO is working with the United Nations Country Team in Cambodia to assess the impact on those employed in the tourism sector; to provide support to


young entrepreneurs in the development of innovative solutions; to produce rapid gender-responsive assessments on the Cambodia labor force; and to strengthen business linkages, specifically in the tourism sector. To accomplish this, UNESCO is partnering with the Royal Government of Cambodia, NGOs, civil society, the private sector, and other relevant developing partners.

The UNDP is responding to the pandemic is Cambodia with its own support package with the goal of creating a foundation for a recovery that creates a better and stronger Cambodia. This response includes models of the socio-economic impact and survey tools to create a more inclusive stimulus package; the widening of social insurance to cover informal workers; and the expansion of online marketplaces, online linkages, and more effective and sanitary trade through technical support.


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References

“Cambodia Economic Update: Cambodia in the Time of COVID-19.” World Bank. May 2020. http://documents1.worldbank.org/curated/en/165091590723843418/pdf/Cambodia-Economic-Update-Cambodia-in-the-Time-of-COVID-19-Special-Focus-Teacher-Accountability-and-Student-Learning-Outcomes.pdf

“Cambodia: UNAIDs & other UN agencies will provide social protection & humanitarian assistance to 90, 000 returning migrant workers; while businesses close due to COVID-19.” Khmer Times. Business & Human Rights Resource Centre. April 28, 2020. https://www.business-humanrights.org/en/cambodia-unaids-other-un-agencies-will-provide-social-protection-humanitarian-assistance-to-90000-returning-migrant-workers-while-businesses-close-due-to-covid-19

“COVID-19 and employment in the tourism sector: Impact and response in Asia and the Pacific.” International Labor Organization. Thematic brief. April 24, 2020.

“COVID-19 begins to exact toll on Cambodian farming.” Medical Press. June 23, 2020. https://medicalxpress.com/news/2020-06-covid-exact-toll-cambodian-farming.html

“COVID-19 opens a can of worms for fisherwomen in Cambodia.” United Nations Environment Programme. July 14, 2020. https://www.unenvironment.org/news-and-stories/story/covid-19-opens-can-worms-fisherwomen-cambodia

“Policy Responses to COVID-19.” International Monetary Fund. June 18, 2020. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#C

“Support to the National Response to contain the impact of COVID-19: Situational Analysis.” UNDP. https://www.la.undp.org/content/lao_pdr/en/home/covid-19-pandemic-response/support-to-national-response.html

“UNESCO’s Response to the COVID-19 Crisis in Cambodia.” United Nations Educational, Scientific and Cultural Organization. https://en.unesco.org/sites/default/files/unesco_covid-19_response_in_cambodia.pdf

Amina Mendez Acosta, David Evans. “The Economic Impact of COVID-19 around the World: A Round-Up of the Most Recent Analysis.”

Amy Searight. “Strengths and Vulnerabilities in Southeast Asia’s response to the Covid-19 Pandemic.” CSIS. April 20, 2020. https://www.csis.org/analysis/strengths-and-vulnerabilities-southeast-asias-response-covid-19-pandemic.

Hean Socheata. “Empowering Women in Cambodia’s Farming Sector.” VOA Cambodia. March 12, 2016. https://www.voacambodia.com/a/empowering-women-in-cambodia-farming-sector/3232287.html#:~:text=Cambodian%20women%20play%20an%20important,according%20to%20the%20World%20Bank.

Kaushik Barua. “Supporting Cambodian farmers during the COVID-19 pandemic.” April 17, 2020. https://www.ifad.org/en/web/latest/blog/asset/41875817

Shaun Turton, Bopha Phorn. “Coronavirus deals heavy blow to Cambodia’s shaky tourism industry.” Nikkei Asian Review. June 2, 2020. https://asia.nikkei.com/Business/Travel-Leisure/Coronavirus-deals-heavy-blow-to-Cambodia-s-shaky-tourism-industry2

Sokunthy Ros. “Women workers in Cambodia under the COVID-19 pandemic.” Focus on the Global South. May 27, 2020. https://focusweb.org/women-workers-in-cambodia-under-the-covid-pandemic/


Laos PDR

The COVID-19 pandemic has had an impact on Laos’ economy through its effects on trade, construction and tourism. These negative impacts are expected to be amplified given the

loss of livelihoods, unemployment, and malnutrition that are already present as a result of recent natural disasters like the 2018/2019 drought and floods. Agribusiness employs approximately 70% of the population and its fragile state before the pandemic may make it more vulnerable to the impacts of COVID-19. According to the UNDP, the projections for the tourism sector in 2020 show significant losses as compared to 2019, with an estimated loss of US$250 to 300 million. Additionally, incomes are affected for the 1.3 million migrant workers whose job prospects are limited due to border closures and the resulting remittances that make up 25-50% of rural households income. These income losses reduce the purchasing power of households and may result in a higher risk of food insecurity.

Agribusiness

In April, the World Food Programme conducted a rapid assessment of food security and agriculture in Laos to identify the impacts of COVID-19 on the agribusiness sector and food security. The findings differed by province, but the most affected was Luangnamtha, likely due to its borders with Myanmar, China and Thailand, indirectly through the Bokeo province. These are critical trade borders for Laos and they saw a significant decrease in mobile traders as a result of travel restrictions. Farmers in Luangnamtha saw a negative impact on the sales, particularly those of horticultural and cash crops, as traders, middlemen, and farmers movements were restricted. Many also experienced challenges accessing agricultural inputs such as fertilizer, animal feed, and equipment either due to reduced supply or increased prices.

Travel restrictions also impacted sugarcane harvesters, who typically rely on migrant workers. As a result of daily labor being affected and a reduction in sales, unemployment increased and income decreased for farming households, with the poorer families less secure in their ability to purchase food. Many rural households do depend on their own food production and what they gather from nature however about a third of them surveyed reported that the nutrition in their diets had been negatively impacted. Across Laos, this assessment by the World Food Programme did not identify any average significant reductions in agricultural activity however, the region of Luangnamtha and a few select other provinces did experience negative impacts that resulted in decreased income, reduced purchasing power, and increased risk of food insecurity.


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The impact of COVID-19 on the tourism and hospitality sector in Laos was assessed by the Asian Development Bank (ABD) in a survey of 327 tourism enterprises. The assessment found differing impacts based on provinces that accommodated more international tourists than domestic, with the larger negative impact being in the areas that focused on international tourism. According to the ADB, international arrivals decreased by 17% in the first three months of 2020 – in contrast to the 14.4% increase in international tourists Laos saw in 2019. Tourism is a growing contributor to national GDP, adding 4.6% in 2019, and employs approximately 54 000 employees. The ADB reports that increasing linkages between tourism and other sectors indicate that the indirect contribution of tourism to GDP is actually much higher. Given that 63% of the workers in the sector are women, women are more likely to feel the impacts of COVID-19 on the Lao economy. In 2020, around 70% of the tourism enterprises surveyed reported reducing their workforce by 38% - with 40% of female employees laid off compared to 34% of male employees. Without employment, these workers will lose the security that an income provides and will at greater risk of falling below the poverty line. For the tourism businesses, only around half of the ones surveyed reported that they could sustain themselves for four to five months with their savings, and it is likely that many will have to close their doors permanently if the pandemic travel restrictions continue. When separating enterprises that target international and domestic tourists, the international ones laid off significantly more employees (46.3%) than the domestic ones (26.5%). Therefore, it is fair to assume that in order to build a tourism sector that is more resilient to global shocks, domestic tourism should become a priority.

National Response

The IMF reports the national r e s p o n s e o f t h e L a o government to the COVID-19 pandemic include a 10-measure economic stimulus package that involves the establishment of a task force whose purpose is to ident i fy and address the economic impact o f the pandemic. The government has also implemented a credit policy that enables businesses affected by the pandemic to access restructured and/or new loans from national banks. The Bank of Laos, for example, has set aside approximately $US22 million for low-interest loans to small and medium sized enterprises. The Laos government has introduced numerous tax policies to mitigate the economic effects of COVID-19 as well. Some of these policies include: profit tax exemption for enterprises with reduced income, income tax exemption for private sector employees and civil


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servants, duty tax exemption for pandemic-related imports, a temporary deferral of social security contribution for impacted businesses, and a temporary deferral of tax collections from tourism enterprises.


The UNDP is assisting the national response with an assessment conducted by the United Nations Country Team of the short and long-term economic impacts of COVID-19. The UNDP will intervene in three main areas: socio-economic impact and response planning; inclusive and integrated crisis management; and health systems and communication support. The first intervention, socio-economic impact and response planning, involves an assessment focusing on the agribusiness and tourism sectors where the majority of the poor and women are employed, and the potential impacts on labor markets, SMEs, and the informal sector. Additionally, the UNDP will work towards promoting a gender-responsive approach to COVID-19 by giving opportunities and market access to women producers of personal protective equipment.

References

“Rapid Assessment of Food Security and Agriculture in Lao PDR.” World Food Programme. May 2020. https://docs.wfp.org/api/documents/WFP-0000116698/download/?_ga=2.35516321.184445800.1593794449-662071857.1593179803

“Lao PDR: Emergency Financing for COVID-19 Response Project.” World Bank. April 8, 2020. https://www.worldbank.org/en/news/press-release/2020/04/08/lao-pdr-emergency-financing-for-covid-19-response-project

“Policy Responses to COVID-19.” International Monetary Fund. July 1, 2020. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#L

“The Impact of COVID-19 on Tourism Enterprises in the Lao People’s Democratic Republic: An Initial Assessment.” Asian Development Bank (ADS). June 2020. https://www.adb.org/sites/default/files/publication/613466/adb-brief-141-impact-covid-19-tourism-lao-pdr.pdf


Myanmar

Myanmar is expected to significantly feel the socio-economic impacts of COVID-19 due to its frequent conflict in certain regions, high rate of poverty, high number of returning

migrants, displaced people and slum dwellers, and high proportion of informal sector workers. According to the United Nations, the effects will include poor outcomes in health and education as a result of challenges to delivery systems; decreased trade and tourism levels; disruptions to the supply chain and reduced consumption resulting in thousands of lost jobs, particularly for women and informal workers; reduced remittances creating macroeconomic stress; and increased political tensions and insecurity as the pandemic exacerbates social grievances.

To prevent the spread of the virus, many restaurants have closed and construction, manufacturing and trading activities have ceased. These changes are affecting micro, small, and medium sized enterprises first. Since March 2020, over 80 000 migrant workers have returned to Myanmar and there have been reports of reduced food security and threatened livelihoods in urban areas as a result of restrictions on movement. The loss of livelihoods for those working in the informal sector represents a significant portion of Myanmar’s poor and near-poor, putting them at risk of falling deeper into poverty. This vulnerability to COVID-19 is further exacerbated by the advent of Myanmar’s monsoon season and the conflict occurring in the country.

According to CESO’s Country Representative in Myanmar, due to the economic shocks of COVID-19, 5.3 million non-farm jobs were lost during lockdown. The hardest hit were those who make a living on the street at vendors and food hawkers as well as people with disabilities, and internal migrants from rural areas who can no longer make a living due to the closures of factories and mills. The Country Representive also reports that MSMEs have been negatively affected by COVID-19, with many forced to close from lack of income during the lockdown.

Gender Equality

Approximately 90.7% of working women are operating in the informal sector and thus are especially vulnerable to the economic impacts of COVID-19. This vulnerability is magnified given their prevalence in the sectors directly affected by the crisis: in the garment industry, women represent 88% of the labor force, 69% in the retail and trade industry, and 23% of the tourism industry. Of the 700 000 workers in the garment sector, 50% are reported to be at risk of suspension without pay or to lose their source of income entirely as a result of reduced demand and


supply chain disruptions. Since women are more likely to lose their jobs, the COVID-19 pandemic could result in a diminished labor force participation rate for women, potentially increasing the gender pay gap, unemployment, and their share of unpaid domestic work, thus reversing progress in achieving women’s economic empowerment. Additionally, as women dominate the teaching profession, schools reopening while the virus circulates puts them at greater risk of contracting COVID-19.

The reduction is remittances is also expected to result in a greater increase in women’s poverty as women-headed households are 69% more likely than male-headed households to receive remittances. Young women and girls in poor households that are more likely to lose income sources face a greater risk of being forced to drop out of school or enter marriage early.

Since many women are no longer able or willing to visit crowded markets in town and buyers’ orders have been reduced, some producers have begun using online marketplaces to sell their products. In Myanmar, informal, social-media-driven e-commerce is a growing source of revenue for women. Although there are no gender-disaggregated statistics on formal or informal commerce, many of the sellers on social media appear to be women. Social media e-commerce can generate significant sales given the country’s many mobile connections, 80% smartphone penetration, and the prevalence of Facebook, which is about 85% of Myanmar’s internet traffic. Social media is popular for sellers in part because it does not require stocks of inventory while customers prefer it to formal e-commerce because of the convenience, variety, and the human aspect that comes with interactions over Facebook Messenger. Thus, while formal e-commerce is only estimated to generate US$6 million out of a US$10-12 billion retail market, the informal e-commerce on social-media has the potential to generate much more. Due to COVID-19, many more women business owners have moved their sales online, and some are looking to expand their operations further with online workshops, tutorials, and consultations.

In a survey conducted by the World Bank on the impact of COVID-19 on firms in Myanmar, female-owned firms are reported more likely than male-owned firms to experience reduced sales, cashflow shortages, and diminished credit access.


Agribusiness

Agriculture in Myanmar provides more than 50% of work in the employment sector and contributes more than 30% to GDP. However, its growth forecast in the fiscal year 2019/2020 was negative, creating concerns about its ability to absorb newly unemployed people from sectors hit hard by COVID-19. The agribusiness sector has not escaped the impacts of the pandemic either – it has been affected by export reductions, transportation challenges, and market access restrictions, and movement limitations on workers and consumers. Rural workers in both formal and informal markets depend on agricultural trading for much of their day labor opportunities will be severely affected. Additionally, affected will be urban informal sector and self-employed workers who rely on markets for food. These agribusiness disruptions, along with Myanmar’s ongoing conflicts, poor population, and vulnerability to crises such as severe weather events and pests, puts Myanmar at risk of becoming a hot spot for food insecurity.

Logistical issues during the lockdown resulted in many smallholder farmers losing their produce because they did not have access to postharvest operations and storage. CESO’s Country Representative in Myanmar reports that many vegetable farmers, unable to trade due to restrictions, were forced to abandon their perishable products at the Chinese border. Food loss is high in the perishable crops sub sector due to lack of a seed management system and postharvest, dry, and cold storage technologies. Therefore, because of the pandemic restrictions, perishable food loss is from 25 – 40%. The impacts on the agribusiness sector are predominantly external and so the recovery of this sector is more dependent on when agri-exports will resume.

In a May assessment of the economic impacts of COVID-19 on Myanmar’s economy, the International Food Policy Research Institute (IFPRI) found that the agri-food sector has been negatively affected by reduced demand both from local consumers and for exports. Despite exemptions provided under the lockdown, the agribusiness sector is still significantly impacted due to strong linkages with other sectors. For example, sales to hotels and restaurants are drastically reduced as these businesses cut back their operations.


To understand the impact on the agricultural retail sector, the IFPRI conducted a phone survey of agricultural input retailers in Myanmar between May 21 and May 23. Approximately 90% of all respondents reported experiencing disruptions as a result of COVID-19, with the most common being demand disruptions, difficulty collecting payments on credit lending, and supply disruptions. About 55% of retailers expressed challenges collecting payments from farmers for inputs they had provided on credit. As a result, many retailers themselves are unable to pay back the providers of the input stocks they received on credit. Because of the increased rate of default, 27% of retailers surveyed reported a reduction in the credit offered to farmers.

Within the agribusiness sector in Myanmar, agricultural mechanization service providers (MSPs) are critical for allowing smallholder farmers to increase their food production and income through power-intensive farming and post-harvest operations. Operating MSPs however, is highly dependent on movement and trade to transport machinery, equipment parts, and access work opportunities. Therefore, MSPs have been highly vulnerable to restrictions on movement and trade resulting in higher costs for equipment and imported spare parts and worker shortages. Additionally, many farmers have been significantly delayed in making payments to MSPs due to the impact of COVID-19 on their own operations. These challenges have made it difficult for MSPs to repay the loans they acquired to purchase their machinery. As the majority of MSPs are small and medium sized enterprises, they face challenges accessing capital and paying their employees. According to the IFPRI, many are trying to stay afloat by selling off assets and borrowing more money from private individuals or, for 20% of MSPs, taking loans from the government.

The fisheries and aquaculture sub-sector of Myanmar has also experienced the negative impacts of COVID-19. Between March and August 2020, the Myanmar Fisheries Products Processors and Exporters Association (MPEA) has estimated that the sector will experience its largest loss in history. In April, export demand for fish fell so low that many cold storage facilities were forced to close due to a lack of revenue, and eventually remained closed due to the lockdown measures imposed to prevent viral spread. Some businesses have reportedly been forced to suspend their activities due to this reduction in demand and income and could face the loss of their livelihoods if factory reopening are delayed further. While government measures to relieve private sector businesses represent hope for these businesses, some are uncertain they will receive aid in time.

In a June report on Myanmar, the World Bank reports that the agribusiness sector is being supported by favorably weather conditions and an increased demand for staple crop products. However, livestock and fishery sub-sectors continue to be negatively affected by volatile prices and weakened demand due to trade network disruptions both domestically and internationally.


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The tourism sector in Myanmar has been one of the key engines of growth since the country opened up in the 2000s. Representing 6.8% of GDP in 2019 and 4% of total employment, the effect on the tourism sector is likely to have a lasting impact on the economy. In the tourism sector, women represent 23% of the workforce, and make up 60% of all employees in food and accommodation services. Within the sector, women are among the more vulnerable employees. The Ministry of Hotels and Tourism has estimated a 50% drop in international arrivals and revenues for 2020, resulting in many lost jobs. According to the UN, even in the best-case growth scenario, the tourism sector will feel deep impacts particularly among vulnerable groups including women. In tourism-dependent regions, job losses have been greater and the effects will be deeper. In Yangon region, for example, 3 out of 10 people belong to households where members rely on tourism activities for over 50% of their income. Like many of its South-East Asian neighbours, Myanmar may need to increase its efforts towards generating domestic tourism to preserve some of the jobs in this sector. The World Bank reports that the tourism and hospitality industry is likely to recover much slower than other sectors once all restrictions are lifted as a result of increased cautionary behavior.

According to CESO’s Country Representative in Myanmar, the tourism sector recovery will take place in three stages. The first stage took place from April to June and involved fee reductions, payment deferrals, and tax exemptions as well as online training and market assessments. The second phase, to be undertaken from July to August, includes Standard Operation Procedures for businesses to follow that will allow them to reopen safely. This second phase promotes domestic tourism to local destinations. The third phase will last for up to a year and is focused on reimagining tourism in Myanmar with creative new marketing campaigns. As of August, Myanmar is still in phase 2 of its tourism recovery roadmap.


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National Response

Initially, the national government’s socio-economic response to COVID-19 consisted of a US$70 million stimulus package to provide cashflow loans with an interest rate of 1% to SMEs and businesses in the tourism and manufacturing sectors. However, on April 28, Myanmar’s government unveiled a much more ambitious and comprehensive COVID-19 Economic Relief Plan (CERP) amounting to US$2-3 billion. The CERP is not a recovery plan, according to the UN, it is too early for Myanmar to have a recovery plan. Instead, CERP proposes policies regarding monetary stimulus, private and financial sector support, SME investment, worker protection, trade promotion, healthcare strengthening, and social assistance. The new plan aims to lower utility bills and help renegotiate loans for those who need it, thereby easing the financial burden the pandemic has on households. Additionally, the plan entails a public-funded, labor-intensive public works project to absorb the increasing number of unemployed people and returning migrants. The capacity of the CERP to provide timely economic relief to the most vulnerable, such as daily wage earners, displaced persons, and people in rural and ethnic minority areas, has been questioned. Additionally, the UN reports that there are concerns that the CERP does not adequately address many parts of the social impact including gender equality, food security, and access to education.

Though the government has been successful in engaging the community in combatting the pandemic, CESO’s Country Representative reports that some communities enforce stricter restrictions than others, creating inconsistency between them.

National support for MSMEs comes from a relief fund which disbursement loans at an interest rate of 1% for one year. Additionally, while the government is providing food assistance, the IFPRI points out that this assistance is more urgently needed by households with children under five, a woman-head, or pregnant women.


The UN’s response to the COVID-19 pandemic in Myanmar was initially prioritized towards prevention and control, the procurement of personal protective equipment (PPE), specialized medical equipment, and expanding the capacity of health systems. However, the response has evolved and now includes health, humanitarian, and socio-economic and recovery. The United Nations Development Programme (UNDP), along with the Ministry of Planning, Finance, and Industry, has assisted eligible SMEs in the preparation of applications for the emergency loan fund. Through all these areas of support, the UN has prioritized women, particularly women garment workers, MSME owners, and street food vendors who are eligible for LIFT fund micro-loans. To further understand the impact of the crisis on women entrepreneurs and employees and to guide the development of initiatives intended to address the needs of private sector women, UN Women has implemented two survey initiatives. Alongside these gendered socio-economic response studies, the UNCT will conduct several impact assessments on the socio-economic impact of COVID-19 on a broad spectrum of areas.


References

“Fish and Aquatic Food Systems COVID-19 Updates for May: Myanmar.” CGIAR Research Program on Fish. May 19, 2020. https://fish.cgiar.org/news-and-updates/news/fish-and-aquatic-food-systems-covid-19-updates-may-myanmar

“Monitoring the Impact of COVID-19 in Myanmar: Agricultural Input Retailers.” IFPRI Myanmar. May 2020.

“Myanmar Economic Monitor: Myanmar In The Time Of COVID-19.” The World Bank. June 2020.

“Policy Responses to COVID-19.” International Monetary Fund. July 1, 2020. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#L

“Rapid Assessment of Food Security and Agriculture in Lao PDR.” World Food Programme. May 2020. https://docs.wfp.org/api/documents/WFP-0000116698/download/?_ga=2.35516321.184445800.1593794449-662071857.1593179803 “Support to the National Response to contain the impact of COVID-19: Situational Analysis.”

“The Impact of COVID-19 on Tourism Enterprises in the Lao People’s Democratic Republic: An Initial Assessment.” Asian Development Bank (ADS). June 2020. https://www.adb.org/sites/default/files/publication/613466/adb-brief-141-impact-covid-19-tourism-lao-pdr.pdf

“A UN framework for the immediate socio-economic response to COVID-19 in Myanmar.” United Nations Myanmar. June 2020. https://reliefweb.int/sites/reliefweb.int/files/resources/MMR_Socioeconomic-Response-Plan_2020.pdf

“Assessing the Impacts of COVID-19 on Myanmar’s Economy: A Social Accounting Matrix (SAM) Multiplier Approach.” IFPRI Myanmar. May 2020.

“CARE Rapid Gender Analysis of COVID-19 in Myanmar.” Care. June 7, 2020. http://www.careevaluations.org/wp-content/uploads/Myanmar-RGA_Covid-19_Report_FINAL.pdf

“In Myanmar, women work to protect small businesses during COVID-19.” UN Women. May 22, 2020. https://www.unwomen.org/en/news/stories/2020/5/feature-myanmar-women-work-to-protect-small-businesses-during-covid-19

Hiroyuki Takeshima, Myat Thida Win, and Ian Masias. “Monitoring the Impact of COVID-19 in Myanmar.” International Food Policy Research Institute. June 2020. http://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/133754/filename/133964.pdf

Yosha Gupta. “How Social Media is Fueling Women’s Entrepreneurship in Myanmar.” CGAP. May 14, 2020. https://www.cgap.org/blog/how-social-media-fueling-womens-entrepreneurship-myanmar


Philippines

The impact of the COVID-19 pandemic on the Philippines is severe – already consumption, a major economic growth driver, is significantly reduced and visible impacts can be seen in

the tourism sector, trade, and remittances. The socio-economic impacts are estimated to reduce national GDP in 2020 by three to four percentage points. While the whole economy will likely be affected to some degree, inequalities will potentially be deepened for the most vulnerable groups: women-headed households, the poor, ethnic minorities, informal workers, displaced persons, and those who live in post-conflict regions. Additionally, regions affected by natural disasters will be more susceptible to the negative economic impacts of the pandemic.

In a COVID-19 Pulse Survey commissioned by Zero Extreme Poverty Philippines 2030 (ZEP PH 2030) and the United Nations Development Programme (UNDP), data was collected via messenger chatbox on the experiences of households. Of the survey respondents, around 75% were female, 70% were living below the poverty line, and another 25% were on the margin and at risk of falling into poverty. The chatbox survey tool effectively reached the poor who were able to access it with free mobile data. The survey revealed that the pandemic had increased the number of households in income poverty – with 83% of respondents experiencing a decline in household income and 34% reporting a complete loss of income. According to the survey results, informal workers, those who rely on unreliable income sources, suffered the worst: 42% of informal or temporary workers lost their source of income compared to 35% of permanent job holders. According to the UNDP and ZEP, the data gathered by the survey confirms the fears of many actors in the development sphere: that recent progress made in reducing income poverty is being reversed in a very short span of time.

According to CESO’s Country Representative in the Philippines, the country has fallen into a deep recession as more than 3000 businesses closed and more than 100 000 families were left without work as a result of the economic impacts of COVID-19. While the government has a program to support these families, it is often not enough for those who lost their income in the long-term. After the lockdown was lifted on May 31, some individuals were allowed to return to work but not everyone. Public Utility Vehicle (PUV) drivers for example, were without work for many months until June, when only a handful were allowed to resume driving their vehicles.

A particularly vulnerable group is the Overseas Filipino Workers (OFWs) who previously contributed billions of dollars in remittances to the Philippines annually. As a result of COVID-19, approximately 85 000 of OFWs returned to the Philippines, and another 300 000 had lost their job.


Along with OFWs, MSMEs have been negatively impacted, particularly those in the manufacturing and retailing subsectors. Representing more than 99% of all businesses in the Philippines, MSMEs employ about 70% of Filipino workers. Of all the MSMEs in the country, 90% of micro-enterprises with total assets less than US$61 800, according to CESO’s Country Representative in the Philippines. These low savings make it a challenge for MSMEs to stay afloat with reduced operations for an extended period of time and many will be forced to close if the pandemic is prolonged for two years, as some experts estimate. Women are the majority of MSME owners and are acutely feeling the impact of COVID-19 through reduced demand for their products and reduced sales. As many had to close their businesses, livelihoods were lost. MSMEs are essential for economic recovery and many may need to shift their product focus towards basic commodities or health products to account for many consumers lower buying capacity. Some tentative AWE partners have switched their operations to continue generating income. For example, one partner began manufacturing face masks instead of her usual bags and shoes while another is operating a small variety store.

A survey conducted by PricewaterhouseCoopers on the impact of COVID-19 on businesses in quarantine revealed that 44% of MSMEs required better working capital management and 39% of MSMEs felt that access to financing was one of the more critical needs. As a result of lockdown restrictions, many MSMEs were forced to close and although rent and loan payments were temporarily suspended by the government, MSMEs were still responsible for expenses and other payables. As the restrictions relaxed and businesses began to slowly reopen, the pressure on their working capitals is unlikely to ease up as activities remain limited. Throughout the lockdown, more than 70% of MSMEs did not make layoffs or reduce their employment force. Therefore, these small businesses were absorbing losses and sustaining themselves through loans or delayed tax and debt payments.

For the environment, the COVID-19 pandemic has produced a silver lining in the Philippines. With less vehicles on the roads, the air quality in Metro Manilla has drastically improved, prompting the government to implement a program to replace old, inefficient vehicles with environmentally friendly PUVs.

Gender Equality

Filipino women are overrepresented in the informal economy and are therefore more vulnerable to the economic impacts of COVID-19. The 6.6 million Filipino women in the informal sector have a lower earning capacity, lower savings, reduced safety nets, and little access to labor protections such as sick leave or severance. Since many of their livelihoods rely on social interactions in public spaces, the COVID-19 restrictions have made them unable to work and unable to earn an income and support themselves.

Filipino women in the formal sector are also vulnerable due to their prevalence in the service industries such as retail, tourism, and hospitality. These sectors were the first to be impacted by COVID-19 and many businesses were forced into partial or complete closures. For those that stayed


open, they suffered a drastic decrease in revenue. As many of the women-led MSMEs in these sectors are small businesses, most of them will not be able to continue to pay their employees and suppliers. Travel restrictions have also impacted the mobility of these businesses and prevented them from buying and selling at the level required to sustain a profit. According to UN Women, these challenges may be the tipping point for women and families that were struggling economically pre-COVID-19.

The COVID-19 pandemic also presents challenges for women at home. Filipino women typically perform the majority of unpaid care work and in the context of COVID-19, this burden is likely to increase as family members require more in-home attention. Women in the formal and informal sectors who retain their jobs may have a much higher amount of unpaid care work than they did previously. Additionally, taking care of ill family members can put women at greater risk of catching the virus.

Agribusiness

Agribusiness represents a significant portion of the Philippines GDP: agriculture alone contributes 10%, food manufacturing contributes another 10%, and agro-services such as packaging, transporting, trade warehousing, and trading contribute approximately 15%. Therefore, the impact of COVID-19 on agribusiness will affect more than one third of the Philippine economy. The lockdowns and travel restrictions imposed in the Philippines and around the world affected the transport of produce from farms to markets; the supply of agricultural labor; and demand, both locally and for exports. In some areas, deliveries of vegetables and other produce to urban areas have been affected. While some farmers’ harvests are being purchased by the regional governments or organizations to distribute as food relief, other farmers are not as fortunate, and have produce left in the fields to rot. The reduction in local demand is a reflection of the reduced purchasing power resulting from the loss of jobs and livelihoods. Additionally, world prices for crops such as coffee, rubber, and coconut will likely affect these sub-sectors as well.

The COVID-19 Pulse Philippines Survey conducted by the UNDP and ZEP revealed that many households, at least a third of respondents, experienced skipping meals with 33% having skipped one meal in a week and 10% having skipped two or more. The survey indicated a relationship between skipping meals and income, showing that the poor and those working in the informal sector were more likely to experience food insecurity. To cope, 35% of households reported seeking out other income sources; 31 % reported purchasing cheaper food; and 24% reported borrowing


money or food. Additionally, the majority of households surveyed (94%) had received some kind of assistance either cash or in-kind in the form of food relief packs from the Philippines government.

According to CESO’s Philippines Country Representative, the least affected MSMEs have been producers of basic commodities and health products, such as canned fish or ginger tea. Some partners have switched their operations to agribusiness by selling farm produce. Despite challenges, the agriculture sector has actually experienced a positive, albeit small, growth in contrast to other industries in the Philippines which can be attributed to people’s basic need for agricultural products.


Although the Philippines closed its airports on March 20, the country has been feeling the impacts of COVID-19 on its tourism sector since January, when other countries began to impose travel restrictions. Even domestically, tourism has decreased as many are fearful that they will contract the virus by travelling. In the first quarter of 2020, international tourism receipts declined by 36% from the same time in 2019. Since tourism represented 12.7% of national GDP in 2019 and provided jobs for 5.71 million people, the negative impact that COVID-19 has on tourism has the potential to devastate millions of people’s livelihoods. To assess the impact on the tourism sector, Price waterhouse Coopers (PwC) and the Philippine Department of Tourism conducted a survey of 247 decision makers in the tourism services sector and the accommodations sector. The low demand for tourism activities and accommodation have caused the majority of survey respondents to temporarily suspend or reduce operations as well as reduce the number of their employees. 88% of the respondents estimate they will lose more than 50% of their 2020 revenues as a result of travel restrictions and 78% have said they need funding up to US$101 366 to bring their business back on track. 73% of these businesses plan to rely on government subsidies and grants to keep themselves afloat.


While the World Travel and Tourism Council initially estimated a 10-month recovery for the tourism industry, some forecasts do not place complete recovery for another five years. In June 2020, the Philippines House of Representatives has approved a house bill for an economic stimulus act that will amount to over US$26 billion and be directed to wage subsidies and MSME assistance. Of this amount, US$11.8 billion is intended to provide interest free loans, marketing and product development promotions, information technology, training grants, and infrastructure to mitigate the economic effects.

National Response

As part of the national response to the COVID-19 pandemic, the Philippines government implemented a fiscal package targeting vulnerable groups which includes a cash aid program for low-income households; social protection measures for displaced, overseas, migrant, and other vulnerable workers; credit guarantees for small businesses; and agricultural sector support. Additionally, specialized microfinance loans will provide financial assistance to impacted MSMEs. The government response, while quick and decisive, has been criticized for being gender-blind and not considering the disproportionate affect the pandemic has on women. For example, the closures of businesses has threatened women who are highly visible in the retail, tourism and hospitality, and manufacturing sectors. In many cases, business in these sectors have resorted to furloughs and layoffs that initially target contract and part-time workers who are typically women.

The government has extended assistance to MSMEs to help them recover. This includes an interest free loan of approximately US$4 million minimum and a reduction of corporate income tax by 5%. In total, this MSME program is allocated about US$4 billion of government funds. Because women are the majority of micro and small enterprise owners, they will benefit from this program as recipients.


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The UNDP is supporting the national government’s response to COVID-19 as the lead of the UN socio-economic response. Areas of intervention include strengthening health systems, inclusive and integrated crisis management and response, and socio-economic impact and recovery. Within the latter area, UNDP is establishing a warehouse of private and public sector data to help assist the government’s policy planning and implementation. Additionally, the UNDP is using data scraping and several online surveys to understand the full extent of the socio-economic impact. The COVID-19 Pulse Philippines Survey conducted with ZEP showed how effective technology can be for gathering effective information in an efficient and timely manner. Additionally, the use of messenger chatbot proved that digital divides can be bridged across different classes and acted as a safe space where the poorest can share their experiences.

References

“#TawidCOVID – A Pulse of Poverty: Application of Citizen-Centered Innovation.” UNDP Philippines. 2020. https://www.ph.undp.org/content/philippines/en/home/library/poverty/technical-report-on-covid-pulse-phase-1.html

“Policy Responses to COVID-19.” IMF. July 15, 2020. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#P

“Support to the National Response to contain the impact of COVID-19: Situational Analysis and Strategy.” UNDP Philippines. https://www.ph.undp.org/content/philippines/en/home/covid-19-pandemic-response/support-to-national-response.html

“COVID-19 in Philippines: Police deployed to implement fresh lockdowns.” DW. July 20, 2020. https://www.dw.com/en/covid-19-in-philippines-police-deployed-to-implement-fresh-lockdowns/a-54243337

“Gender Snapshot: COVID-19 in the Philippines.” UN Women. April 2020. https://www2.unwomen.org/-/media/field%20office%20eseasia/docs/publications/2020/04/phl-covid%20gender%20snapshot%20april%202020.pdf?la=en&vs=3508

“Impact of COVID-19 on the Philippine Tourism Industry.” PwC | Philippines. July 2020. https://www.pwc.com/ph/en/publications/tourism-pwc-philippines/tourism-covid-19.html

Dynah Basuil, KG Lobo, and Christine Marie Faustino. “The Philippines’ gender-blind COVID-19 response.” East Asia Forum. June 29, 2020. https://www.eastasiaforum.org/2020/06/29/the-philippines-gender-blind-covid-19-response/

Janesse Galicia-Dorado. “Towards resilience: A practicl guide for MSMEs.” PwC Philippines. June 15, 2020. https://www.pwc.com/ph/en/business-unusual/towards-resilience-a-practical-guide-for-msmes.html

Rolando T. Dy. “Philippine agriculture and COVID-19 impact.” BW World Online. June 15, 2020. https://www.bworldonline.com/philippine-agriculture-and-covid-19-impact/


Vietnam

V ietnam’s response to COVID-19 has been praised internationally for its zero deaths, reportedly accomplished by strict contact tracing, mobilization of the country’s military

forces and health system, and an effective education campaign on prevention. However, the country has not escaped the negative economic impacts of the pandemic. Vietnamese government statistics report that the GDP growth in Q1 of 2020 was the lowest growth recorded since 2011, with negative growth being felt in the tourism and hospitality, transportation, and warehouses sectors. According to the UNDP, almost five million workers were affected by April with 13% who had lost jobs, 28% who are taking turns working, and 59% who were temporarily out of work. The largest impact falls on those who work in the informal sector – up to 57.2% of employees in non-agricultural sectors – and lower-income households. MSMEs make up 90% of Vietnam’s business sector. According to the World Bank Group, 90% of all firms are household businesses with three or fewer employees that have limited working capital and are too small to benefit from scale economies and easy access to technology and finance. These are the businesses that are most at risk from COVID-19 closures, particularly as they typically concentrate in traditional sectors like retail, tourism, and hospitality. The Vietnam Chamber of Commerce and Industry (VCCI) conducted a survey which revealed that 60% of businesses have cash flow problems and 50% of businesses reported being able to stay afloat for six months.

According to CESO’s Country Representative in Vietnam, COVID-19 has primarily affected Vietnam through its impact on the country’s export partners, who have a reduced demand for Vietnamese products, and the impact on Vietnam’s import partners – primarily China, Japan, and Korea from which Vietnam imports materials for its manufacturing sector. As a result, unemployment has risen and in the last six months, almost 30 000 businesses have closed, negatively affecting the livelihoods of laborers in all industries but particularly tourism, transportation, retail, industrial and construction, agriculture and seafood. Thus, while the country has been successful at containing the pandemic inside its borders, it is largely dependent on other economies and a significant part of its recovery will be dictated by when its main exporters’ economies begin to reopen. International agencies like the Asian Development Bank, the World Bank, and the International Monetary Fund, expect the global economy to begin a slow recovery towards the end of 2020 that will pick up speed in 2021. However, domestic spending in Vietnam is also a driver of growth, according to McKinsey & Company, and represents an opportunity for a quicker recovery.


Gender Equality

Many of the challenges that COVID-19 poses to the Vietnamese economy disproportionately impact women. A d d i t i o n a l l y, g i v e n t h e i r l o w representation in public decision-making processes, women also have little input on the national response to the pandemic. One of the hardest hit sectors, garment and textile, have a female participation rate of over 80%, making them more likely to experience job loss. As well as export sectors, the majority of women work as unpaid family workers or as informal workers such as street vendors, migrant domestic workers, homeworkers, or in the entertainment industry. This broad category of informal workers are more vulnerable to economic downturns due to their lack of employment contracts and insurance and limited savings. Members of informal working groups in Vietnam have been reporting reductions in income from 50-60%, while some domestic workers have lost their income completely due to reduced demand for their services. Street vendors, many of them women, have experienced reductions in sales as people avoid street shopping in favour of online shopping. Although the lockdown and closures in Vietnam are lifted, these vendors have expressed concerns that consumers will continue the trend of online shopping even after the pandemic has been controlled.

Additionally, women’s safety has been disproportionately impacted by the crisis: CESO’s Country Representative in Vietnam reports that the Vietnam Women’ Union has experienced a 50% increase in domestic violence calls and a 80% increase in women at the Binh Yen House, a home for victims of trafficking and domestic violence.

Agribusiness

The risks to agribusiness and food security stem from price rises, demand reductions, market access, and transportation disruptions. According to experts from the International Finance Corporation (IFC), anticipating difficulty accessing inputs, the Vietnamese government had imported a lot of fertilizer and certain commodities for poultry and pork feed production but there is an additional issue with crop production and market access. Restrictions and regulations have created problems with accessing labor for the fields and transporting crops from the fields to the market. Additionally, border closings and tight controls are disrupting trade – border checks between Vietnam and Cambodia had reportedly caused problems with the poultry sector. Higher-value perishable crops are negatively impacted by the impact on air travel; fishery sector exports for example have


decreased by 40%, and agriculture exports to the European Union decreased by 28%. Technology, however, has the potential to help address some of these issues by helping to monitor crops with remote sensing technology, water or livestock meters; online remote training to ensure farmers are aware of the disease and pricing information; and agri-service platforms to enable machinery and transport access across the supply chain.

The disruptions to the agribusiness sector are particularly hard on vulnerable groups, such as ethnic minorities and women. Movement restrictions in ethnic minority areas prevent migrant workers from finding daily work and prevent farmers from selling their crops and wholesalers from traveling to areas to collect products. Women farmers and wholesalers without access to a vehicle or a driving license were impacted the most. The lack of tourists and local traffic also contributed to lowering sales and purchasing power of these groups. While food security in these ethnic minority areas may not be an issue because people mainly grow food for their own household’s consumption, the poor households without cultivated land may face food insecurity. High food prices created a challenge for the urban poor as well, with some expressing concern that the rising prices of pork and beef could result in inadequate protein intake for children.

Some street vendors have been able to successfully sell their agricultural products online using Facebook and Zalo, but many people do not have the technological understanding or access to use these virtual marketplaces.


With international travel restrictions, tourism and hospitality has been one of the most negatively impacted sectors by the COVID-19 pandemic. In Vietnam, March 2020 tourists were 68% lower than they were in March 2019, according to the UNDP. 18.5% of Vietnamese women are involved in this sector compared to only 9% of men, so these negative impacts can be expected to be felt more acutely by women. The owner of the Hidden Saigon tour company, Linh Phan, reports that although life appeared to be back to normal, there are entire streets of shops and restaurants that have not survived the restrictions and lockdowns. In order to keep her business afloat, Linh Phan is considering a shift away from her company’s international tourism focus to workshop programming, domestic tourism, or corporate incentives and conferences.


When the first wave of COVID-19 passed in Vietnam, only 75% of accommodation businesses reopened, with a significantly reduced occupancy rate. CESO’s Country Representative reports that the second wave of COVID-19 arrived in late July, interrupting the summer season for domestic tourism and closing the sector again with no indication of when it will reopen.

Given the unpredictable nature of COVID-19, and the waves of opening and contracting that is expected to occur in many countries, the recovery of the tourism sector is challenging to predict. However, McKinsey & Company estimates that for Vietnam, the opening of ASEAN borders will help restart domestic tourism. Additionally, when international tourism becomes viable, Vietnam will be at an advantage and likely to receive more tourists given its virus-free status and its reputation for controlling the pandemic.

National Response

The government’s response to COVID-19 was quick with the first version of the national response plan issued on January 20, three days before the first cases were recorded. In early April, the government released its policies to address the socio-economic impacts of the crisis. These policies included a US$ 8 billion support package for impacted enterprises that addressed tax deferrals, rent and social insurance payments; a US$12.7 billion credit package that included US$2.6 billion in short-term cash transfers to poor households, as well as affected formal and informal workers.

Additionally, the government focused on innovation, funding national research institutions, providing swift approvals for test kit applications, and enabling domestic firms to repurpose and produce masks, test kits, and ventilators that met quality and quantity standards. The government also acted quickly to ensure that the population received critical and accurate information with the availability of mobile apps that provide alerts on positive cases and potential sites of exposure in cities.

The UNDP Representative in Vietnam points out that Vietnam’s response was one of the most promising examples of timely and decisive leadership that enabled innovations across the government, the private sector, and think tanks while simultaneously engaging citizens and harnessing their creativity and solidarity. She calls the pandemic a ‘microcosm of how swift action can have immense impact down the road’ and points to Vietnam’s handling of COVID-19 as an example of the type of leadership that is needed to fight the climate crisis so that Vietnam can


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‘build back build back better in a way that protects both our people and our planet from COVID-19 and the existential threat of climate change.’


UNICEF is supporting Vietnam in numerous areas, including risk communication and community engagement, sanitation and hygiene supplies, provision of continued access to healthcare and nutrition services, access to continuous education, social and child protection, and gender based violence services, and data collection and research on the social impacts of COVID-19. This last area involves identifying the socio-economic impacts on children and families to help inform government recovery policies.

The United Nations Development Programme (UNDP) is also supporting the national government’s response to the COVID-19 pandemic. This support incudes the donation of 20 000 surgical masks, the production of risk communication videos targeted at ethnic minorities and people with disabilities, and a socio-economic impact assessment of poor households and micro- and small enterprises. Additionally, the UNDP is assessing the impact of COVID-19, along with the drought and saltwater intrusion, on vulnerable groups in the Mekong Delta.

The UNDP’s response is divided into multiple pillars. As part of the ‘health systems support procurement’ pillar of the UNDP response, robotic technology is being trialed in healthcare facilities. The ‘socio-economic assessment’ pillar consists of follow-up assessments and the use of a real-time tracker of the impacts on poverty. In the ‘leaving no one behind’ pillar, the UNDP is leading cash transfers to ethnic minority households and microbusinesses, and enabling the safe return to workplaces. Lastly, the ‘accelerating inclusive innovation’ pillar includes an online hackathon, “Hack CoVy”, that had 4220 participants, 63 teams, and three top teams that entered incubation programs to scale up their innovations in order to benefit the most people.


References

George Black. “Vietnam May Have the Most Effective Response to COVID-19.” The Nation. April 24, 2020. https://www.thenation.com/article/world/coronavirus-vietnam-quarantine-mobilization/

“Anticipatory, Adaptive and Agile Governance is key to the response to COVID-19.” Q&A with Caitlin Wisen, UNDP Resident Representative in Viet Nam. UNDP Asia and the Pacific. May 14, 2020. https://www.asia-pacific.undp.org/content/rbap/en/home/presscenter/articles/2020/anticipatory--adaptive-and-agile-governance-is-key-to-the-respon.html

“COVID-19 Impact Assessment: Analysis of the Potential Impacts of COVID-19 on Vietnamese Economy.” PWC | Vietnam. 2020. https://www.pwc.com/vn/en/publications/vietnam-publications/economy-covid19.htmlBruce Delteil, Matthieu Francois, and Nga Nguyen. “Emerging from the pandemic, Vietnam must position itself for recovery.” McKinsey & Company. July 1, 2020. https://www.mckinsey.com/featured-insights/asia-pacific/emerging-from-the-pandemic-vietnam-must-position-itself-for-recovery

“COVID-19 Situation Report No. 4.” UNICEF Vietnam Country Office. May 14 – June 4. https://reliefweb.int/sites/reliefweb.int/files/resources/UNICEF%20Viet%20Nam%20COVID-19%20Situation%20Report%20No.%204%20-%2014%20May-4%20June%202020.pdf

“Situation Update #10: UNDP Response to Coronavirus in Viet Nam.” UNDP. May 29, 2020. https://reliefweb.int/sites/reliefweb.int/files/resources/Viet_Nam_SitRep10_May29_final.pdf

“CARE Rapid Gender Analysis for COVID-19 VIETNAM.” Care. May 2020. http://www.careevaluations.org/wp-content/uploads/Viet-Nam-RGA-report_final.pdf

“Vibrant Vietnam: Forging the Foundation of a High-Income Economy.” World Bank Group. May 2020.

Bruce Delteil, Matthieu Francois, and Nga Nguyen. “Emerging from the pandemic, Vietnam must position itself for recovery.”

Caitlin Wiesen (resident representative for UNDP Vietnam) “Swift climate action paves the way for Vietnam’s sustainable future.” Vietnam Investment Review. April 22, 2020. https://www.vir.com.vn/swift-climate-action-paves-the-way-for-vietnams-sustainable-future-75776.html

Linh Phan. “Hidden Saigon tour company’s ownwer on the impact of COVID in Vietnam.” Eat North. June 4, 2020. https://eatnorth.com/linh-phan/hidden-saigon-tour-companys-owner-impact-covid-vietnam

Policy Responses to COVID-19. IMF. July 1, 2020. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#V

Responses to COVID-19 disruptions in agribusiness supply chains in Vietnam. Webinar. International Finance Corporation: World Bank Group. April 29, 2020. https://www.ifc.org/wps/wcm/connect/industry_ext_content/ifc_external_corporate_site/agribusiness/events/webinar_responses%20to%20covid-19%20disruptions%20in%20agribusiness%20supply%20chains%20in%20vietnam


Documents

Socioeconomic impacts of COVID-19