Countries eligible for support from International Development Association (IDA), the part of the World Bank that supports the world’s poorest countries, faced severe adversities even before the COVID-19 pandemic. New data from the World Bank has found that now, in the midst of the pandemic, many IDA countries are bearing the brunt of the impact—with monetary and non-monetary effects that are likely to have been worse in the poorest countries than in the rest of the developing world.
For an early analysis of the socioeconomic impacts of the coronavirus pandemic in IDA countries, we draw on harmonized data from the World Bank’s COVID-19 High Frequency Phone Surveys (HFPS) that are being conducted across the developing world. The globally harmonized data, now available on the COVID-19 High Frequency Monitoring Dashboard, allows comparisons across countries and over time for a range of socioeconomic indicators. Earlier analyses with the data have suggested widespread impacts on incomes, jobs and human capital that are likely to amplify pre-existing inequalities, between rich and poor countries and between the privileged and underprivileged within countries.
Our findings are based on data from the first wave of HFPS (as of December 7, 2020), which includes 24 IDA countries that are home to almost half of the total population of the 74 countries currently eligible for IDA support. The comparator group includes 20 countries that account for 12% of the total population of non-IDA developing countries. Since the sample of countries is not designed to be representative of each group, one should avoid generalizing the findings to all IDA and non-IDA countries.
How are the households in IDA countries faring during COVID-19?
Figure 1 shows the differences between IDA and non-IDA countries in our sample after the onset of COVID-19. All numbers are simple averages for the set of countries in each group (IDA/non-IDA) for which the indicator is available. A few patterns are worth highlighting.
- Income losses in IDA countries are more prevalent than in non-IDA countries.
While our surveys find large income losses among households everywhere, those in IDA countries are more likely to experience income losses since the start of the pandemic. On average, income losses are reported by about two-thirds of all households in an IDA country compared to 59% of households in non-IDA countries, but with considerable variation within each group (Figure 2).
- However, households in IDA countries are less likely to suffer job stoppages during COVID-19 than those in non-IDA countries.
An average of 29% of respondents who were working pre-COVID stopped working in the last week before the survey in IDA countries, compared to 39% for non-IDA countries. This is probably because many workers in low-income countries are in the informal sector or self-employed and not covered by safety nets like unemployment insurance. Thus, they cannot afford to stop working even when their earnings are low.
Household income losses are also linked to a decline in remittances, usually from family members working in a different region or country. An average of 60% of households across all countries in the database report lower remittances since the onset of COVID, with a higher average for IDA countries than for non-IDA countries.
- Food insecurity tends to be more severe in IDA countries.
An average of 51% of households in IDA countries report an adult skipping at least one meal due to lack of resources in the last 30 days, compared to 34% of households in non-IDA countries. In four of the IDA countries, more than 60% of households report skipping meals. Even though this deprivation cannot be attributed entirely to COVID-19, lower food security in the poorest countries of the world during a pandemic is a cause for serious concern.
- Access to education is severely restricted in IDA countries.
Access to education during the pandemic strongly declines with per capita GDP of countries and is very low for most IDA countries (Figure 3). In all but two of the IDA countries, less than 30% of households with children who attended school prior to the pandemic completed an educational assignment since the outbreak. The severe loss of learning has far-reaching consequences for human capital and future social mobility.
- Female respondents appear to be more likely to stop working.
In both IDA and non-IDA countries, female respondents to the surveys are more likely to stop working than male respondents. These numbers hint at important gender differences in labor market impacts, with the caveat that survey respondents may not represent all women of working-age in some countries.
How have households and social assistance programs in IDA countries responded to the crisis?
Figure 4 shows averages for IDA and non-IDA countries along two dimensions: strategies that households adopt to cope with their income losses, and the social assistance they have received from public and non-public (including religious) sources. A few differences between IDA and non-IDA countries stand out.
- To cope with income losses, households in IDA countries are more likely to dip into emergency savings or sell assets than households in non-IDA countries.
The coping strategies adopted by households in poorer countries may affect their future ability to weather economic shocks and generate income.
- Social assistance is more limited in IDA countries than in non-IDA countries.
The average coverage of social assistance among households in IDA countries is 14%, compared to 30% in non-IDA countries. There are large gaps in coverage – many of those reporting food insecurity in IDA countries do not receive social assistance. The differences between countries likely reflect gaps in resources, institutional capacity, and the coverage of the pre-existing public safety net system. The data also reflect the early months of the crisis, which might have been too early to capture the effects of expansion in safety net programs in some countries.
Our preliminary findings suggest that the effects of the pandemic on both monetary and non-monetary well-being are likely to have been worse, on the average, in IDA countries than in the rest of the developing world. In the first three months after the crisis, people in IDA countries faced a higher risk of income loss, greater disruptions to their children’s learning, and undernourishment compared to those in other countries. They were also more likely to adopt coping strategies with damaging consequences for poverty and social mobility in the longer term, and less likely to receive the social assistance that would reduce the need to adopt such measures in the first place. In mitigating the effects of the crisis and supporting the recovery, the needs of the poorest countries must be prioritized by the development community for the world to have any chance of fulfilling the commitment to end extreme poverty by 2030.