The coronavirus demands immediate social and economic action

02/04/2020 10:28 PM

Editorial by Marcelo Abi-Ramia Caetano, Secretary General, International Social Security Association

This is a moment of urgency. Governments and authorities are taking robust measures to stop the coronavirus. Immediate action is also needed to avoid a social and economic crisis. Social security will make a difference.


Towards the end of the First World War in 1918, when soldiers went on summer leave, they brought back home a dangerous guest. A flu virus. What was to become known as the Spanish flu spread quickly and became a global pandemic. Without appropriate prevention measures and access to affordable health care, 500 million people fell ill, a third of the world’s population, and over 50 million people died.


In 2008, 90 years later, a financial crisis led to a global economic meltdown with severe social and economic consequences. Bankruptcies and unemployment soared. Youth unemployment doubled and even tripled. In Greece and Spain, more than one in two young job seeker was unable to find work.


Important lessons can be drawn from these and many other crises to tackle today’s coronavirus outbreak, and its health, economic and psychological impact. The Spanish flu demonstrated that a virus hits indiscriminately across all levels of society, and that universal access to health care is indispensable to tackle such an outbreak.


During the financial crisis, after a first focus on financial institutions, governments were quick to realize the dramatic hardship and reduction in purchasing power people experienced due to job cuts, mortgage foreclosures and income losses. A second wave of crisis response consisted of measures to help people through education, training, active labour market policies, targeted social benefits and job creation. Social security proved to be of crucial importance in maintaining economic demand, reducing the economic downturn, to mitigate its social impact and to accelerate the “return to normal”.


Countries that have a well-developed system of social security were best able to navigate the difficult times, as they had the necessary instruments to react dynamically. A key lesson from the financial crisis is that these reactions must happen as early as possible.


We have come a long way since the Spanish flu. In line with the gravity of the situation, international, national and regional authorities have acted rapidly to curb the spread of the new coronavirus. Wide-reaching measures are being implemented, not only in the health system, but also with restrictions on movements and social gatherings.


Based on the lessons of the past, governments need to act immediately and decisively to mitigate the economic and social impact of the pandemic on our societies. Sectors like travel, tourism, transportation, restauration, retail and entertainment are heavily affected, and so are free-lancers and contract workers. With city centres, airports, music halls, shops and cafés empty, businesses are already laying off people and going bankrupt.


Hand in hand with  actions to fight the virus, powerful and targeted measures are needed to support employers, workers, freelancers, and those who are sick or potentially sick and in quarantine, as well as  those who need to care for children or relatives, and other vulnerable persons who need extra help and support. A number of governments have taken actions, such as economic stimulus to the economy, delaying or exempting tax payments or social contributions, relaxing rules on part-time or short-term contracts, strengthening rights to unemployment benefits or sick leave pay, introducing new care benefits, and expanding social benefit schemes.


Still, more needs to be done.


Dynamic implementation of social security will soften the impact of the coronavirus on society. Social security institutions focus on finding innovative solutions to reach to more vulnerable and facilitate access for contributors and beneficiaries.


In France, the National Sickness Insurance Fund has established an online service for employers to declare workers that have to stay home because of closed schools and nurseries. The Social Insurance Institution of Finland (Kansaneläkelaitos) will concentrate on benefits that are intended to secure people’s income. The Norwegian Labour and Welfare Administration (NAV) temporarily accepts sick leave certificates acquired through phone or online consultation with a doctor.


Now is our window of opportunity. Governments must assess the vulnerability of their economies, people and social security systems. Appropriate measures to ensure that employers, workers and beneficiaries are supported, can help them get through the crisis. The International Social Security Association actively supports its 321 social security member institutions in 159 countries, as well as governments and international partners, in these efforts. The centre of our short-term efforts is our corona monitor, including analysis and a media monitor. For the longer term, a number of activities are being developed to overcome the lasting impact of this crisis and be better prepared for a potential next one.