When a Pandemic Strikes: Balancing Health and Economy toward Sustainable and Inclusive Recovery

Balisacan, Arsenio M. and dela Cruz, Russel Matthew M. (2021): When a Pandemic Strikes: Balancing Health and Economy toward Sustainable and Inclusive Recovery. Forthcoming in: Transactions of National Academy of Science and Technology, Philippines (NAST PHL)

Abstract

COVID-19 has made it undeniably clear that governance and policy choices in the health sector have come at very high costs to lives and the economy. The pandemic plunged the Philippine economy in 2020 into its most severe contraction in the postwar era, pushing about five million workers out of jobs, eroding three to five years of gains in poverty reduction, and inflicting scars that threaten the economy’s long-term potential for inclusive growth. The pandemic has exacerbated existing inequalities and created new ones. The burden of employment contraction has fallen disproportionately on lower-skilled and less-educated workers. The gaps in access to health care, education, and mobility services—already present during normal times—have further widened between the haves and the have-nots. The health crisis has also hastened workplace digitization and artificial intelligence, but the benefits have been limited for workers with little or no education and those without access to reliable and affordable internet services, particularly the poor. The resulting loss of organizational and information capital, lost years of schooling and hunger impairing human capital, investment foregone due to heightened uncertainty, and rising inequality have scarred the economy. Such scarring weakens the prospects for long-term productivity growth and inclusive economic development. The road to sustained and inclusive recovery demands a strategic and timely deployment of policy tools that will strengthen the public health system and protect livelihoods and the most vulnerable population groups. The goal is to quickly recover to the pre-pandemic levels of employment and income to avoid deeper economic scarring and steer back the economy to its previous high-growth trajectory. Beyond recovery, the policy imperative must be to strengthen the resilience of the health-economy system, enabling it to withstand future health shocks and other challenges, such as those related to climate change.

• Item Type: MPRA Paper
• Language: English
• Keywords: COVID-19, Health, Inequality, Poverty, Government Policy, Economic Development, Philippines
• Subjects: I - Health, Education, and Welfare > I1 - Health > I14 - Health and Inequality; I - Health, Education, and Welfare > I1 - Health > I15 - Health and Economic Development; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East

References

Aschwanden, Christie. 2021. "Five Reasons Why COVID Herd Immunity is Probably Impossible." Nature. 18 March 2021. https://www.nature.com/articles/d41586-021-00728-2.

ADB (Asian Development Bank). n.d. ADB COVID-19 Policy Database. https://covid19policy.adb.org/ (accessed 15 June 2021).

ADB. 2021a. Asian Development Outlook (ADO) 2021 Update: Transforming Agriculture in Asia. September. https://dx.doi.org/10.22617/FLS210352-3.

ADB. 2021b. Asian Development Outlook (ADO) 2021: Financing a Green and Inclusive Recovery. https://www.adb.org/publications/asian-development-outlook-2021.

ADB. 2021c. Learning and Earning Losses from COVID-19 School Closures in Developing Asia. April 2021. https://www.adb.org/sites/default/files/publication/692111/ado2021-special-topic.pdf.

Bird, Kelly, Cristina Lozano, and Teresa Mendoza. 2021. "Philippines’ COVID-19 Employment Challenge: Labor Market Programs to the Rescue." ADB Blogs, 4 June 2021. https://blogs.adb.org/blog/philippines-covid-19-employment-challenge-labor-market-programs-to-rescue.

Balisacan, Arsenio M. 2019. "Toward a fairer society: inequality and competition policy in developing Asia." Philippine Review of Economics 59, no. 1 and 2: 127-146.

Balisacan, Arsenio M. 2003. “Poverty and Inequality,” in The Philippine Economy: Development, Policies, and Challenges, ed. A.M. Balisacan and H. Hill. New York: Oxford University Press. 2003

Bloomberg. 2021. The Covid Resilience Ranking: The Best and Worst Places to Be as We Learn to Live with Delta. 28 September. https://www.bloomberg.com/graphics/covid-resilience-ranking/ (accessed 7 October 2021).

Cerra, Valerie, Antonio Fatás, and Sweta C. Saxena. 2020. "The Persistence of a COVID-Induced Global Recession." Prod. Vox EU, 14 May 2020. https://voxeu.org/article/persistence-covid-induced-global-recession.

Christiansen, Lone Engbo, Ashique Habib, Margaux MacDonald, and Davide Malacrino. 2021. "Getting Back to Growth." IMFBlog, 10 June 2021. https://blogs.imf.org/2021/06/10/getting-back-to-growth/?utm_medium=email&utm_source=govdelivery.

Curran, Enda, and Simon Kennedy. 2021. "Covid will Leave Deep Scars in World Economy Even after Recovery." Bloomberg, April 2021. https://www.bloomberg.com/news/articles/2021-04-17/economic-recovery-after-covid-scars-will-remain-after-the-rebound.

Das, Sonali, and Philippe Wingender. 2021. "Slow-Healing Scars: The Pandemic’s Legacy." IMFBlog, 31 March 2021. https://blogs.imf.org/2021/03/31/slow-healing-scars-the-pandemics-legacy/.

De Dios, Emmanuel S., and Katrina Dinglasan. 2015. "Just how good is unemployment as a measure of welfare? A note." Philippine Review of Economics 52, no. 2(2015).

De Vera, Ben O. 2021. "P169-B COVID funds Unspent Due to Red Tape." Philippine Daily Inquirer, 2 July 2021. https://newsinfo.inquirer.net/1454392/p-169-b-covid-funds-unspent-due-to-red-tape.

DOF (Department of Finance). 2020. "Gov’t Economic Team Rolls Out P27.1 B Package vs COVID-19 Pandemic." 16 March 2021. https://www.dof.gov.ph/govt-economic-team-rolls-out-p27-1-b-package-vs-covid-19-pandemic/.

DTI (Department of Trade and Industry). 2019. MSME Statistics. https://www.dti.gov.ph/resources/msme-statistics/.

Ferreira, Francisco H.G. 2021. "Inequality in the Time of COVID-19." Finance & Development 20-23. https://www.imf.org/external/pubs/ft/fandd/2021/06/inequality-and-covid-19-ferreira.htm.

Ferreira, Francisco, Olivier Sterck, Daniel Mahler, and Benoît Decerf. 2021. "Death and Destitution: The Global Distribution of Welfare Losses from the COVID-19 Pandemic." London School of Economics Inequalities Institute no.65 (May 2021). http://eprints.lse.ac.uk/110480/2/Ferreira_death_and_destitution_published.pdf.

Ferrer, Alice Joan G. 2021. "Health vs Economy: How to Strike the Balance?" National Academy of Science and Technology, Philippines: Visayas Regional Scientific Meeting. 14 April 2021.

Georgieva, Kristalina, Federico Díez, Romain Duval, and Daniel Schwarz. 2021. "Rising Market Power—A Threat to the Recovery?" IMFBlog, 15 March 2021. https://blogs.imf.org/2021/03/15/rising-market-power-a-threat-to-the-recovery/?utm_medium=email&utm_source=govdelivery.

Hill, Hal, Arsenio M. Balisacan, and Russel Matthew M. dela Cruz. 2021. "Philippine Economic Development, Looking Backwards and Forward: An Interpretative Essay." Australian National University: Working Papers in Trade and Development. October 2021. https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2021-10/acde_td_hill_et_al_2021_24.pdf.

IMF (International Monetary Fund). 2021. World Economic Outlook Database. April 2021. https://www.imf.org/en/Publications/WEO/weo-database/2021/April (accessed July 2021). International Telecommunication Union. 2019. ICT Statistics. https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx (accessed July 2021).

Mendoza, Ronald U. 2021. "Health vs. Economy: How to Strike the Balance?" National Academy of Science and Technology, Philippines: Luzon Regional Scientific Meeting. 28 April 2021.

Mendoza, Ronald U. 2021. "The Philippine economy under the pandemic: From Asian tiger to sick man again?" Brookings, 2 August 2021. https://www.brookings.edu/blog/order-from-chaos/2021/08/02/the-philippine-economy-under-the-pandemic-from-asian-tiger-to-sick-man-again/.

Monsod, Toby Melissa C., and Maria Socorro Gochoco-Bautista. 2021. "Rethinking 'Economic Fundamentals' in an Era of Global Physical Shocks: Insights from the Philippines Experience with COVID-19." Asian Economic Papers 20 (1): 109-140. https://doi.org/10.1162/asep_a_00802.

NEDA (National Economic and Development Authority). 2021a. "DBCC reviews growth assumptions for FY 2021." 18 August 2021. https://neda.gov.ph/dbcc-reviews-growth-assumptions-for-fy-2021/.

NEDA. 2021b. "The Total Cost of COVID-19 and Quarantines on the Present and future Generations." Presentation.

NEDA. 2021c. "President Duterte Lauds Implementation of National ID Program. 5 May 2021. https://www.neda.gov.ph/president-duterte-lauds-implementation-of-national-id-program/.

Our World in Data. n.d. COVID-19 Data Explorer. https://ourworldindata.org/explorers/coronavirus-data-explorer (accessed August 2021).

Philippine Statistics Authority. 2019-2021. Labor Force Surveys. https://psa.gov.ph/statistics/survey/labor-force/lfs-index (accessed November 2021)

Shinozaki, Shigehiro, and Lakshman Nagraj Rao. 2021. "COVID-19 Impact on Micro, Small, and Medium-Sized Enterprises under the Lockdown: Evidence from a Rapid Survey in the Philippines." ADBI Working Paper Series, February 2021. https://www.adb.org/publications/covid-19-impact-msme-under-lockdown-evidence-rapid-survey-philippines.

Social Weather Stations. 2021. "Second Quarter 2021 Social Weather Report." https://www.sws.org.ph/swsmain/artcldisppage/?artcsyscode=ART-20210728100035.

Speedtest by Ookla. 2021. Speedtest Global Index. June 2021. https://www.speedtest.net/global-index (accessed July 2021).

Ulep, Valerie Gilbert, Anton Paterno, Jhanna Uy, Vanessa Siy Van, Lyle Casas, and Justin Tan. 2021. " The Impact of the COVID-19 Pandemic on Social Health Insurance Claims for High-Burden Diseases in the Philippines." Center for Global Development no. 580 (May 2021). https://www.cgdev.org/sites/default/files/impact-covid-19-pandemic-social-health-insurance-claims-high-burden-diseases-philippines.pdf

US CDC (Centers for Disease Control and Prevention). 2021. "Delta Variant: What We Know About the Science." 26 August 2021. https://www.cdc.gov/coronavirus/2019-ncov/variants/delta-variant.html.

World Bank. n.d. World Development Indicators. https://data.worldbank.org/ (accessed July 2021).

World Bank. 2020. "From Containment to Recovery: Economic Update for East Asia and the Pacific." October 2020. World Bank. https://www.worldbank.org/en/region/eap/publication/east-asia-pacific-economic-update.

World Bank. 2021. "Uneven Recovery: East Asia and Pacific Economic Update." April 2021. World Bank. https://www.worldbank.org/en/region/eap/publication/uneven-recovery-east-asia-and-pacific-economic-update-april-2021.

World Health Organization. 2021. "Vaccine Efficacy, Effectiveness and Protection." 14 July 2021. https://www.who.int/news-room/feature-stories/detail/vaccine-efficacy-effectiveness-and-protection.