UNDP's Development Futures Series Briefs and Working Papers

This paper reconstructs the full welfare distributions from household surveys of 160 countries, covering 96.5 percent of the global population, to estimate the pandemic-induced increases in global poverty and provide information on the potential short-term effects of income-support programmes on mitigating such increases. Crucially, the analysis performs a large-scale simulation by combining the welfare distributions with the database of social protection measures of Gentilini et al. (2021) and estimates such effects from 72 actual income-support programmes planned or implemented across 41 countries.

The COVID-19 pandemic has affected the Philippine economy in unprecedented ways. The country suffered a 9.6 percent contraction of its GDP in 2020, the worst on record in the post-World War II period. With the second highest cases in Southeast Asia, the country continues to struggle to contain the disease and remains under various degrees of community quarantine. This policy brief examines the socioeconomic impact of the pandemic across Philippine households using non-traditional datasets, particularly market research data showing fast-moving consumer goods (FMCG) spending and mobility data. The paper observes differences in pandemic restrictions and recovery across different geographical areas in the country and in the pace of recovery across households belonging to different socioeconomic groups.

The direct impacts (loss of life) of COVID-19 have been global and well documented. Extreme poverty has risen for the first time in two decades and the impacts on livelihoods and vulnerable or marginalized populations have been distressing and often disproportionate. Most concerningly, countries with poor infrastructure, poor health and education services, and weak democratic institutions have been, arguably, the most vulnerable to both primary and secondary impacts of COVID-19. Within this framework, this brief explores the impact of COVID-19 on civic space in fragile contexts. Information from the UNDP Crisis Bureau’s Crisis Risk Dashboard (CRD) has been used to conduct the data analysis and visualizations presented below.

The IMF’s upcoming Special Drawing Rights (SDR) allocation will provide urgently needed liquidity for countries struggling to meet their crisis-related spending needs and boost resilience against global financial volatility. But, under current quotas and with severe fiscal and financial constraints in many countries, it will not be enough. A voluntary channeling of SDRs to the benefit of vulnerable countries is needed. The potential large size of such also presents an opportunity to move beyond the urgent provision of liquidity toward dealing more systematically and effectively with interlinked debt and development challenges. This will be necessary to safeguard development prospects in the large number of countries that are highly debt-vulnerable, face huge future spending gaps, and are heavily exposed to external shocks, such as from climate change. To deal more effectively with future liquidity risk, an SDR-funded or backed mechanism could offer a range of state-contingent debt instruments that automatically reduce the debt-service burden and refinancing risk based on pre-determined “triggers” tied to external factors or key economic variables. To deal more effectively with solvency problems, SDRs could be channeled toward concessional funding support for countries coming out of debt-restructuring conditional on sufficient treatment of debt, full transparency, and fair burden sharing between creditors. Finally, as a development objective, SDRs could be channeled to target climate vulnerabilities. This would make sense not only because it would adhere to a global fairness principle, but also because debt and climate-vulnerabilities are highly correlated, climate change will intensify in the future, and because of the transmission channels from climate risk to financial and economic stability risk.

The paper analyzes sovereign debt vulnerabilities across 120 developing economies. Country results are summarized and ranked using five vulnerability indicators; credit-ratings, liquidity-risk indicator, solvency-risk indicator, growth in external debt-service burden, and share of external debt owed to private creditors. In total 72 countries are identified as vulnerable, 19 of which severely so. Total external debt service at risk is estimated at a minimum of $598 billion for 2021-2025, $87 billion of which in 2021. One-third of vulnerable countries holding two-thirds of total external debt service at risk are not eligible for the Debt Service Suspension initiative (DSSI) nor for debt treatment under the Common Framework (CF).

In a post-COVID-19 Iraq, it will be impossible to achieve the Sustainable Development Goals (SDGs) or an inclusive development trajectory without tackling the multiple dimensions of fragility in the country. The fragility landscape in Iraq is challenging at best with all dimensions scoring on the high end of the scale. There is a strong imperative to work across the humanitarian, development and peace (HDP) nexus with UNDP as Fragility Integrator, together with all stakeholders, to sustainably address priority drivers and their effects on the social contract and ensure no one is left behind. This policy brief provides recommendation of how to create the enabling environment towards a fragility-based post-COVID-19 recovery.

This study assesses the relationships between foreign direct investment (FDI), growth, natural resources, and UN peacekeeping operations (PKOs) in fragile and conflict-affected countries (FCAs). An unbalanced panel-dataset on conflict and peacekeeping covering 127 countries from 1989-2018 was created to estimate how FDI and growth are associated with periods of peace, conflict, and post-conflict, including the significance of having a PKO in the last. In conclusion, the study finds that fragility is not a major deterrent of resource-seeking FDI, largely explained by its set of unique investment determinants. Furthermore, that peacekeeping and natural resources are important overlooked factors in understanding the large country heterogeneity regarding the economic impact of conflicts and post-conflict economic recovery, and that peacekeeping could be an important measure in closing conflict-attributable GDP losses.

As the rate of new COVID-19 cases accelerates across the developing world, it exposes the potentially devastating costs of job losses and income reversals. Unconditional emergency cash transfers can mitigate the worst immediate effects of the COVID-19 crisis on poor and near-poor households that do not currently have access to social assistance or insurance protection. This paper provides estimates for a Temporary Basic Income (TBI), a minimum guaranteed income above the poverty line, for vulnerable people in 132 developing countries.