Sunday 25 July 2021

Economic shocks call for greater social justice: S&P

DUBAI, November 11, 2020

Economic shocks from the pandemic have widened existing inequities around the world, leading to calls for greater social justice in dealing with this health threat, said S&P Global Ratings in a new report.

Funding social projects

Interest in social justice issues by investors, and companies and nations issuing debt, has until recently been relatively slim, with social bond issuance totalling only 5% of the sustainable debt market in 2019. But that is changing rapidly because of the pandemic. S&P Global Ratings sees growing investor interest in funding social projects that address rising unemployment, income inequality, and strains on housing, health care, and education systems.

Issuance of sustainable investments (including social bonds) to finance both public and private responses and create positive social outcomes, have accelerated. As of October, social bond issuance stood at $71.9 billion, nearly four times greater than in 2019.

The report projects that social bond issuance could approach $100 billion this year, while total sustainable debt could hit a record $500 billion up from $341 billion in 2019.

Health and other social inequities are inextricably linked

The pandemic has put into stark relief the relationship between poor health outcomes and other social inequities. The conditions in which people are born, grow, live, work, and age act as "social determinants" linked to a lack of opportunity and a lack of resources to protect, improve, and maintain health. When taken together, social determinants are largely responsible for health inequities within populations, according to the World Health Organization (WHO).

Vulnerable populations, which include low- and middle-income individuals, people living in crowded housing conditions, ethnic minorities, and senior citizens, are often prone to poor health outcomes given higher rates of existing, chronic illnesses and poor access to high-quality medical care. Each year, WHO says 15 million people in the world between the ages of 30 and 69 die from a noncommunicable disease, with more than 85% of these "premature" deaths occurring in low- and middle-income countries (LMICs).

One reason is that hospitals and clinics in many LMICs often lack necessities like handwashing stations, sanitation, or proper hygienic equipment and supplies. The consequences of these health inequalities have become particularly pronounced during the pandemic, which has overburdened health systems, reducing access to already limited healthcare in many countries. The poorest populations have a much greater chance of dying fromCovid-19 than the richest.

According to an Imperial College and WHO study published in May2020, the poorest quintile of the population in LMICs has a 32% higher probability of dying fromCovid-19 then the richest quintile due to handwashing access, occupation, and hospital access. Unequal access to health care in countries around the world also massively increases the cost of getting sick.

Many people often seek out medical care only if they can pay for it, meaning they wait longer before getting treatment because of the possibility that health care costs could push them into poverty. In the U.S., for example, the Urban Institute has predicted that between April and December 2020, 10 million people will lose employer-sponsored health insurance due to the pandemic.

Covid-19 deepens disparities In housing

Inequities in housing markets worldwide have deepened as well. Lockdown measures assume people have access to safe and secure housing to offer some protection against the pandemic. That leaves the homeless or those living in inadequate conditions woefully exposed. Therefore, it is unsurprising that densely populated urban areas have experienced 90% of global Covid-19 cases, according to the UN.

These issues are particularly acute in developing countries. According to the World Bank, currently over 1 billion people worldwide living in slums and other informal settlements--where sheltering in place and social distancing is nearly impossible—face heightened infection risk. This is due to overcrowding and lack of access to public services including electricity, running water, and adequate sewage and sanitation systems.

The risks are concentrated in Sub-Saharan Africa and East and Southeast Asia, which accounted for 23% and 36% of the global urban population living in slums in 2018, the UN says. Furthermore, poverty and marginalization intersect in slums and poor neighbourhoods, perpetuating already existent forms of socioeconomic, political, and cultural inequality and making the virus more harmful in a “self-perpetuating negative spiral." The issues are not only limited to LMICs, however.

Income inequality grows

Lower-income and women workers are being disproportionately hit by the huge economic shock related to the pandemic. The speed and severity at which the pandemic has spread around the world has plunged the global economy into a sudden state of recession. S&P Global forecasts the global economy will shrink by 4.1% this year, which would represent the deepest contraction since World War II. – TradeArabia News Service


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