UN trade, development agency contends services sectors dealt heavier blow than in past economic crises
Compared to other recent economic crises, the COVID-19 pandemic has dealt a bigger blow to personal services sectors, especially tourism, hospitality and retail, the UN trade and development agency said Tuesday.
“The situation is expected to worsen due to the drastic but necessary social distancing and lockdown measures adopted in the eurozone in the last month,” said Director of UNCTAD’s international trade division Pamela Coke-Hamilton.
“If the crisis persists, the whole tourism industry as we know it in developing countries may collapse,” she warned, while noting women represent more than half of workers in the industry worldwide with 54% in 2019.
Her observation came as some European nations and the United States were considering easing lockdown restrictions, while World Health Organization (WHO) officials pleads for such steps to follow guidelines that do not cause the deadly coronavirus to resurface after a seeming lull.
“Countries must strike a balance between measures that address the mortality caused by COVID-19, and by other diseases due to overwhelmed health systems, as well as the social-economic impacts,” WHO Director-General Tedros Adhanom said at a news conference Monday.
The International Air Transport Association (IATA) released an updated analysis Tuesday showing the COVID-19 crisis will see passenger revenue drop $314 billion in 2020, a 55% decline compared to 2019.
IATA figures showed a considerable jump in estimated loss figures March 24 that projected $252 billion in lost revenues 44% verses 2019 in a scenario with severe travel restrictions lasting three months.
The updated figures reflect a significant deepening of the crisis, with longer bans taking effect and foreseen into the future.
“The industry’s outlook grows darker by the day. We could see more than half of passenger revenues disappear,” said IATA’s Director General and CEO Alexandre de Juniac. “That puts at risk 25 million jobs dependent on aviation. And without urgent relief, many airlines will not survive to lead the economic recovery.”
Coke-Hamilton said the massive disruption of tourism, hospitality and retail contrasts with resilience witnessed during the 2008 Great Recession and the 2011-2013 eurozone sovereign debt crisis, particularly in comparison to trading in goods.
She said health policies should be devised and applied in tandem with macroeconomic, trade, and finance strategies in a “holistic approach” looking at policies in trade, investment, competition, industrial, social and other areas.
“Given that strict mitigation measures remain in place as countries battle the pandemic, government programs to support furloughed or unemployed people through direct payments can help protect vulnerable workers from services sectors,” Coke-Hamilton said.
She said governments should cast their nets wider to support the 164 million migrant workers worldwide working in personal services sectors.