Tuesday, October 20 2020

VietNamNews

Who should benefit from government COVID relief packages?

Update: September, 21/2020 - 08:28

 

Babeth Ngoc Han Lefur

by Babeth Ngoc Han Lefur*

Nearly eight months since the World Health Organization declared COVID-19 a global pandemic, more than 950,000 people have died from the disease. An estimated 400 million people, and disproportionately women, have lost their jobs.

COVID-19 is one of the most severe global health crises of our time – and has brought on one of its most severe economic shocks. Millions of workers and their families around the world have lost their incomes as markets contracted, companies shut down and supplier contracts were cancelled. Up to half a billion people could be pushed into poverty before the pandemic is over. By the end of the year more people could die from hunger linked to COVID-19 than from the disease itself. The global crisis is hitting the most vulnerable the hardest – from workers in meat processing plants in the United States, Brazil and Europe, to small-scale farmers in West Africa, garment workers in South East Asia, and informal urban workers in Lagos, New Delhi and Sao Paolo. Many of the most vulnerable workers are women, racial and ethnic minorities, and migrants.

Oxfam proposed ‘An Economic Rescue Plan for All’ and two major learning from past crises should inform governments’ actions:

- The world must learn from the 2008 financial crisis, when governments bailed out banks and polluting big businesses, but ordinary people paid with a decade of self-defeating economic austerity, with cuts to public services like health and education. The stimulus packages announced in response to the pandemic must not make the same mistakes. Instead, bailout money must go into the hands of the most vulnerable people – workers and small businesses who are the least prepared to cope. It must also be recognised from the beginning that no bailout is gender-neutral, and that the way in which bailouts are organised must aim to close the gap between women and men. These bailouts represent a huge opportunity to change incentives and business models permanently to help build a more human economy.

- Cash grants and other forms of universal social protection can play a huge role in tackling inequality and protecting vulnerable people, and they are critical in response to this crisis. All workers suffering a loss of income must have access to some form of income replacement, be it a wage subsidy, unemployment benefit, sick pay or other benefits. Today only one in five of all unemployed workers has access to unemployment benefits. Governments need to enrol the maximum number of workers under existing schemes by relaxing eligibility criteria, making access easier for freelancers, self-employed workers, those on zero-hours contracts, the newly employed, young workers, part-timers and workers in other forms of precarious employment. Where no adequate social protection schemes exist, governments must provide income support by way of new cash transfers, seeking to include those not yet covered and expanding such schemes to all residents, including migrants and refugees.

Việt Nam has done remarkably well in regard to controlling the COVID-19 pandemic saving many lives; and mitigated the damage on macroeconomics level. Furthermore, the Government of Việt Nam has issued the Resolution No. 42/NQ-CP dated 09 April 2020 and Decision No. 15/2020/QD-TTg dated April 24, 2020 to implement appropriate measures to support people affected by COVID-19 pandemic – the VNĐ62 trillion bailout package

However, Government relief efforts for COVID-19-affected workers need to target better those most in need, with speedier and more efficient implementation.

By the end of July 2020, VNĐ11.9 trillion has been disbursed, equivalent to 12 per cent of the total value of the bailout package, reaching nearly 12 million people and nearly 13,000 household businesses. This disbursement rate is considered to be low and ineffective. The main reason is that most workers still have not received the money. Only 402,466 workers received the money with a total amount of VNĐ403,425 billion, accounting for about 5 per cent of the total disbursed amount. Among those, only 355,227 informal workers received the support with a total amount of VNĐ348,520 million, accounting for about 0.02 per cent of the number of informal workers nationwide.

In order to assist the Government in effectively implementing this policy, The Network of Action for Migrant Workers and Oxfam have been collecting feedbacks from targeted beneficiaries on the implementation of this bailout package. The key findings from beneficiaries’ feedbacks and policy analysis show that the lack of effective policy implementation is due to the following reason: the eligibility criteria to be a beneficiary of the bailout package are complicated and not feasible, posing difficulties and barriers for workers to access this fund.

Việt Nam Government could consider:

- Incorporating the total expected budget of the two support packages (62 trillion and 18 trillion) in a comprehensive and consistent policy, taking into account the lessons learnt from the implementation of the first package.

- Ensure that eligible beneficiaries of the first package receive timely supports. At the same time, the new package should extend its coverage to all types of employment for both formal and informal workers in rural and urban areas.

- The policy implementation duration needs to be longer to support those who are affected in case of new COVID outbreaks. The new duration should be expanded to cover the period from January 2020 to December 2020 and the number of months supported should be calculated on a pro-rated basis based on the actual number of months of income loss or reduction.

- Simplify registration procedures for eligible beneficiaries to receive support and mobilise social organisations to support people in applying for support from the bailout package. The requirement of “having permanent or temporary residence registration” for informal workers should be removed.

*Babeth Ngoc Han Lefur is the Country Director of Oxfam in Vietnam

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