The second session of the AHDR Webinar Series 2020 took place on July 1, 2020 and focused on the political economy of COVID-19 in the Arab States region. Participants discussed government deficits, fiscal and monetary policies, rising inequalities, and the pandemic’s impact on tourism, services, the manufacturing and agricultural sectors, informal workers, and the implications for resilient economies.
Moderator: Bessma Momani, Professor of Political Science at the University of Waterloo and the Balsillie School of International Affairs
Panelists:
- Maha Yahya, Director, Carnegie Middle East Center
- Tarik M. Yousef, Director and Senior Fellow, Brookings Doha Center
- Melani Cammett, Professor of International Affairs, Government Department, and Chair of the Academy of International and Area Studies, Harvard University
Key messages
The role of state capacity and political will:
- Both state and societal factors shape the ability of countries to address the pandemic. State capacity is multidimensional (taxation, infrastructure, conscription, regime type, degree of aid dependency). Societal factors include inequality and poverty rates. Inequality, which is likely underreported across the region, is associated with poor social safety nets.
- There are examples of poor places around the world that have provided good social safety nets. It’s about more than money – it’s about political will and capacity.
- Politics hinder implementation at every juncture. In places where the health system has crumbled and there’s no good sense of the scope of the issue, decisions around handling the crisis become political.
- Forms of capacity such as information-gathering, infrastructure, ability of technical ministries to deliver are essential in addressing the pandemic. Research shows that countries that either had a plan or even conveyed the impression of a plan have done better.
The effects of social cohesion and inequality on responses to COVID-19:
- Responding to the pandemic needs more than states announcing measures and enforcing them. It also requires the compliance of people, which becomes harder as economic crises intensify. Part of it is political trust in government, but social solidarity also helps. Indeed, social compliance becomes harder when there are cleavages around identity and places with politicized ethnoreligious systems have found it harder to deliver services and maintain compliance. Over time compliance fatigue sets in, as well as a tendency to put the blame on specific groups.
- Research shows that in places that have done a good job at managing the crisis, trust and willingness to comply for the sake of public good at the expense of one’s own private interest played crucial roles.
- In Gulf countries, there was a strong sectarian overlay in the attempt to find Patient Zero. In a region with the highest percentage of refugees and IDPs, we may see a similar dynamic of re-stigmatization of these groups, as they are in conditions where the virus can flourish.
- Lebanon is going through a quadruple crisis: economic, banking, financial, and health – and political. Four out of five pillars that held country together are falling apart. The political power-sharing system is in question. The middle class of professionals has crumbled. The Lebanese pound has lost 80 percent of its value in recent months. It’s no longer an emerging economy based on tourism and banking. There are questions around fundamental freedoms of expression, movement, gathering – increasing clampdowns. What’s left is the fifth pillar – security, the Lebanese army – and even this is under strain as they’re exhausted and seeing their purchasing power disappear. 200,000 jobs have been lost as of December 19. An estimated 55 to 60 percent of the population could fall below the poverty line if the Lebanese pound continues to fall beyond initial projections.
Channeling efforts and resources to achieve better systemic outcomes:
- Data such as that provided by the rapid impact assessment documents prepared by UNDP are important to refine our understanding of what’s really happening on the ground.
- There is a need for big public spending packages and to ensure that social assistance gets to those who need it most. To cover any aid or financing gap requires thinking quickly outside the normal channels, because the rest of the world is also facing challenges.
- Conditionality is a bad word, harking back to the heyday of the Washington Consensus. Perhaps it can be reframed from the other end of the ideological spectrum, to ensure that development resources get funneled in good ways to build better systems with better results.
- Pandemic responses need cross-government cooperation, yet the track record in the region is very mixed with some governments doing better than others, having invested in coordination.
- Five accelerators proposed by UNDP Jordan for the government to consider in all new stimulus packages, loans, and interventions:
- Equity and inclusiveness: how do your new investments or interventions address vulnerabilities?
- Gender sensitivity and responsiveness: is gender mainstreamed in your new response measures?
- Digital transformation: are you addressing fundamentals of technology?
- Environmental sustainability: are you considering green economy stimulus?
- Preparedness: how are you preparing better for future shocks?
- International organizations can exert a positive influence. UNDP can help push for dialogue and support coordination across interventions.
