Generalized school closures due to pandemic will have serious consequences in emerging countries, IMF says

The Covid-19 pandemic is increasing global economic inequality, says the World Economic Outlook which will be presented by the IMF at its virtual spring meeting this month. The agency put forward part of the report today, in which it gives as an example of this growing gap the case of education.

“Our analysis estimates that, With widespread school closures, education losses in 2020 are equivalent to a quarter of the school year in advanced economies and double in emerging and developing countries. Children from poorer families have been disproportionately affected. We estimate that up to 6 million children in emerging and developing countries could drop out of school in 2021, with negative consequences for their lives ”says a passage.

The report refers to the increase in poverty and pre-existing inequalities and underlines the importance of social safety nets. The pandemic, he notes, “has also exposed inequalities in access to basic services – healthcare, quality education and digital infrastructure – which, in turn, can lead to income gaps that persist. generation after generation “.

Looking ahead, the IMF notes that “In the coming months, universal access to vaccines and progress in immunization will be decisive. In times of recovery and beyond, economic policies should aim to give everyone the possibility of having opportunities throughout their life, for which the differences in access to quality public services should be reduced ”.

This will require, he continues, “mobilizing additional income and improving service delivery, while fostering inclusive growth.”

Also healthy

In health, growing inequalities between developed and underdeveloped countries mean, the document explains, that countries with better access to health care have experienced lower death rates, given age. population and number of cases ”. On the contrary, the poorest countries have reported “a greater number of infections, especially where urbanization is more widespread”.

Also in this case, the agency warns that “the effects on labor markets will be long-lasting”.

In the specific case of education, the report notes that “the unprecedented scale of school closures has resulted in education losses equivalent to about a quarter of the school year in advanced economies and half in advanced economies. emerging and developing market economies. The greatest losses fell on children from poorer families with lower education levels. In addition, in 2021, net enrollment rates in emerging and developing countries could drop by 1 percentage point (around 6 million children would drop out of school). Children who drop out of school will suffer significant learning losses ”.

recommendations

To avoid the deepening and inertia of the “vicious circle” of education and health in terms of wealth, income and employment opportunities, the Fund indicates that public policy “interventions” must combine “Predistributive policies (which affect income before taxes and transfers). and redistributive policies (which reduce market income inequalities, mainly through transfers and, to a lesser extent, taxes ”and gives a series of tips in this regard:

-Invest more and better in education, health and early childhood development. For example, he says, additional spending on education should be aimed at reducing the education gap between children in rich and poor households and< remédier aux inefficacités >> for which he states only in emerging market economies and developing countries in the United States. income, the difference between the spending efficiency of a country and that of the best performing countries varies between 8% and 11% for health care and between 25% and 50% for education.

-Strengthen social safety nets by expanding the coverage of the most vulnerable householdsand improve the adequacy of benefits. This means not only allocating more resources, he says, but also reallocating spending towards the most effective programs and better targeting benefits and beneficiaries.

-In developed countries, increase the progressivity of income taxes and increase taxes on inheritance and gifts and real estate. And he admits to having considered “contributions for COVID-19 recovery and” excessive “corporate income taxes and even considering wealth taxes if the above measures are not enough.

-Fiscal transparency, by strengthening public finance management and improving transparency and accountability, especially in the case of pandemic response measures, to build confidence in the government.

In 2020, Argentina went the other way. A report by “Red Ruido” which revealed the public expenditure devoted to the pandemic in 14 Argentine provinces which On the basis of decree 260/2020 of President Alberto Fernández, which instituted the health emergency and allowed the procurement of goods and services, 92% of public purchases in this context were carried out directly, preventing control. Provinces such as Salta and Tierra del Fuego have made 100% of their purchases using this method and with extraordinary price differences. For example, the province of Buenos Aires bought ambulances up to three times the price of other districts, Chaco paid for the most expensive N95 chinstrap in the country, Córdoba concentrated the highest turnover in a single supplier and Santa Cruz bought up to a liter of ethyl alcohol. 11 times more expensive than the Chaco.

The pandemic, the report concludes, has increased attention to the capacity of governments to respond to the crisis and will generate popular support for better public services, “already important before the pandemic, and likely to increase.”

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