Dignity not Destitution – why COVID-19 demands an economic rescue package for all

Dignity not Destitution – why COVID-19 demands an economic rescue package for all

In the face of an unprecedented global crisis, we need to look to the poorest among us who will be hardest hit by the virus, both medically and economically. COVID-19 is shining a grim light on existing inequalities between rich and poor, where the richest people across the globe have access to healthcare and enough money and resources to get by, while most of humanity faces this crisis with neither – and stand to lose much more. In the words of Micah Olywangu, a taxi driver in Nairobi, “This virus will starve us before it makes us sick.”

Oxfam’s new report Dignity Not Destitution presents fresh analysis which suggests that over half the global population could be living in poverty in the aftermath of the pandemic. The report states that between 6 and 8 per cent of the global population could be forced into poverty as governments shut down entire economies to manage the spread of the virus. This could set back the fight against poverty by a decade, and as much as 30 years in some places such as Africa.

Existing inequalities dictate the economic impact of this crisis. The poorest workers in rich and poor nations are less likely to be in formal employment, enjoy labour protections such as sick pay, or be able to work from home. Globally, just one out of every five unemployed people have access to unemployment benefits. Two billion people work in the informal sector with no access to sick pay —the majority in poor countries where 90 per cent of jobs are informal compared to just 18 per cent in rich nations. Women are on the front line of the coronavirus response and are likely to be hardest hit financially. Women make up 70 per cent of health workers globally and provide 75 per cent of unpaid care, looking after children, the sick and the elderly. Women are also more likely to be employed in poorly paid precarious jobs that are most at risk.

Many wealthy nations have introduced multi-billion-dollar economic stimulus packages to support business and workers, but most developing nations lack the financial firepower to follow suit. The UN estimates that nearly half of all jobs in Africa could be lost.

The Irish Government has announced €10million in funding to the UN’s Global Humanitarian Response Plan to the coronavirus. While we believe that Ireland’s growing support of the World Health Organisations battle against COVID-19 is a phenomenal showing of global solidarity, these are important first steps to addressing this crisis that must run parallel to an overarching Emergency Rescue Package for all.

An ‘Emergency Rescue Package for All’ would enable poor countries to provide cash grants to those who have lost their income and to bail out vulnerable small businesses. This would require governments and international institutions to take four key actions. These would include the immediate cancellation of US$1 trillion worth of developing country debt payments in 2020, the creation of at least US$1 trillion in new international reserves, known as Special Drawing Rights, to dramatically increase the funds available to countries, the increase of aid through wealthy countries meeting their ODA commitments of 0.7 per cent of GDP, and the adoption of emergency progressive taxes and a massive mobilisation of international aid.

This final step, the mobilisation of international aid would need to inject new money to combat the crisis, be used to help countries strengthen their health systems and cash grants, and serve as the foundation of a new just and effective aid system which will better prepare countries in the future.

History has shown that crises like the one we are living through, can create opportunities for growth and change. The destruction and death seen in the Second World War triggered the creation of international aid as we know it. At this defining moment for our world, we must put inequality and women’s rights at the heart of aid work. We must work to make the aid system inclusive and legitimate and move away from what rich countries are willing to “give” and look to recognised methods of redistribution from the wealthiest to the poorest. This unprecedented crisis may finally allow us to move from dispensing charity to living in a more just world.

Read Dignity not Destitution - An Economic Rescue Package for All

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