The COVID-19 pandemic has countries around the Europe and Central Asia region battling severe health, social, and economic impacts on an unprecedented scale. Lives and livelihoods have been thrown into upheaval as the pandemic claims lives, overwhelms health systems, and brings economic activity around the globe to a virtual standstill.
Alisher, 35, is a trader in a local market in Bukhara, Uzbekistan.
After spending five years in Russia working as a labor migrant on construction sites, he returned home and started a small business.
He rented a small corner in the local market, and together with his wife started selling cheap clothes and shoes. Just when life started getting better for his family, the first COVID-19 case was registered in Uzbekistan in the middle of March. Soon after, the authorities had to shut down all markets to prevent the spread of the pandemic, leaving Alisher - and thousands of small business owners like him - jobless in an instant.
In Uzbekistan, as in the rest of the world, the COVID-19 pandemic has now unleashed an unprecedented health, economic, and social crisis. Millions of people like Alisher have lost their jobs, as economies are being ravaged by business closures, falling commodity prices, drops in tourism revenues, reduced remittances from abroad, and a rapid outflow of foreign and domestic investment.
Remittances alone are estimated to fall by about 28 percent in Europe and Central Asia, due to the combined effect of the global coronavirus pandemic and lower oil prices. The region is expected to enter a recession in 2020, with growth forecast to contract by 4.7 percent.
To meet this unprecedented crisis, the World Bank is taking unprecedented action.
Between March and June, the World Bank mobilized around $1.5 billion to support countries during this difficult time - providing rapid response support through project financing, technical assistance, and policy advice. This support is designed to help countries boost health care systems, deliver support to small businesses, protect jobs and provide social protection for the most vulnerable, including the large aging population in the region.
Emergency COVID-19 Response
Many countries in the region are underequipped to respond to the rapid spread of the pandemic. Albania, and Turkey, for instance, have a hospital bed rate of around 3 beds per 1,000 people—less than half the regional average. Testing capacities across the region are also low.
Given the intersection of these challenges and the rapid nature of this crisis, the World Bank is using a fast-track approach to expedite its loan process with countries to assist with emergency health programs.
This support is helping countries like Belarus, Bosnia and Herzegovina, Georgia, Kyrgyz Republic, Moldova, Tajikistan, Turkey, and Uzbekistan obtain new intensive care beds and ventilators, strengthen testing laboratories, and procure other life-saving medical equipment and materials.
In Georgia, this support is helping the Ministry of Health purchase some 147,0000 rapid COVID-19 test kits by July - more than tripling the country’s testing capacity. Medical staff there is will be able to conduct over 3000 tests every day, compared to less than 1000 before.
In Bosnia and Herzegovina, the World Bank is helping the country increase its isolation capacities in hospitals, procure new intensive care beds with ventilators, and purchase other medical equipment and material.
Hundreds of ventilators and other life-saving equipment has already been purchased in Armenia, Kazakhstan, and Uzbekistan.
Protecting the Poorest
The pandemic’s social and economic consequences are disproportionately affecting the poorest and most at-risk populations around Europe and Central Asia. Thousands of families are losing income while prices for housing, utility, food, and healthcare are growing. In the Western Balkans, up to ten percent of employment is generated by the retail, hospitality, and entertainment sectors – all of which have had to close because of the epidemic – while in Uzbekistan, the share of households with at least one member actively working dropped from 85 to 43 percent between March and April 2020, when the lockdown measures were introduced.
A decline in remittances – the backbone of many economies in the Western Balkans, Eastern Europe and Central Asia – is also compounding the economic difficulties for millions of migrants and their families across the region. In countries like Tajikistan, where more than half of households rely on remittances to buy food and other basic necessities, this will have dire consequences on food security and human capital development.
Using the World Bank’s emergency funding, countries like Bosnia and Herzegovina, Georgia, Moldova, Tajikistan, and Uzbekistan are rolling out safety-nets programs and other measures to support the livelihoods of those who hit hardest.
The World Bank is leveraging countries’ existing social protection systems to help families and businesses restore income, preserve livelihoods, and compensate for increasing prices and unexpected medical expenses. The emergency funds are helping governments provide temporary cash transfers, health care subsidies, targeted social payments and one-off unemployment benefits.
In Uzbekistan, the funding is helping the Government of Uzbekistan to reach additional 135,000 low-income households with social protection programs and over 70,000 people who lost their jobs with one-off unemployment benefits.
In Bosnia and Herzegovina, some 48,000 people most affected by the pandemic will receive social assistance benefits, while financing in Ukraine is supporting the government there in launching targeted social payment systems designed to support vulnerable communities – including pensioners and low-income families.
In Tajikistan, 56,000 food-insecure households with young children across all 68 districts are set to receive cash transfers to help families cope with the rising food prices and other shocks brought by COVID-19.
Support to Businesses
The onset of the COVID-19 pandemic brought global economic activity to a virtual standstill overnight – forcing businesses to close, limiting travel, and halting operations across virtually every sector of the economy. In response to this situation, new funding and restructuring efforts have focused on helping businesses and employees alike weather this economic storm.
Government restrictions forced nonessential businesses and companies that cannot meet social distancing requirements to close or scale back operations to mitigate the outbreak. While some businesses can continue to operate through online sales or telework, for most, the prospects are desolate.
World Bank financing is helping to support viable micro, small and medium businesses that are facing challenges due to limited commercial activities across Europe and Central Asia. This funding will enable companies to pay salaries to thousands of their employees in the next two months and introduce other support measures to help keep the companies afloat.
For example, in Ukraine, a start-up company, called “A Helping Hand,” is using financing from the World Bank to launch a new initiative aimed at helping poor people learn new skills - enabling them to find new jobs or open their own businesses.
In Russia, the World Bank has compiled analysis and recommendations spanning a large range of topics from supporting jobs and firms to health, education and food security. These new series provide guidance on the short-term measures needed in affected sectors and risks to avoid.
Mitigating Long-term Economic Impacts
The breadth and scope of the health and social challenges brought on by the pandemic are devastating – threatening the health and safety of every person living in Europe and Central Asia. And the economic consequences are just as bad.
Over the past three months, the World Bank Group has mounted the fastest crisis response in its history. While this fight is challenging, we are committed to support countries in Europe and Central Asia to ensure that people like Alisher have the chance to withstand the crisis and get back on their feet – the sooner the better.
Read more about the World Bank’s COVID response here.