COVID-19: lockdown may lead unemployment to rise to 21.6% (UNDP study)
17/06/2020 16:38, TUNIS/Tunisia
(TAP) - "The lockdown decided to limit the spread of the COVID-19 pandemic is likely to bring about an increase in the unemployment rate to 21.6% against 15% currently, according to a study on the economic impact of the COVID-19 pandemic on the Tunisian economy for the year 2020 conducted by the Ministry of Development, Investment and International Cooperation and the United Nations Development Programme (UNDP).

The study, presented by Asma Bouraoui Khouja, team leader of the Inclusive Growth and Human Development Department at UNDP, at a press conference held Wednesday in Tunis, shows that the number of unemployed will went up by 274,500 in 2020 alone.

As a result, the poverty rate would rise to 19.2% from the current 15.2 per cent.

"Although all measures were fundamental to protect the population from the COVID-19 pandemic, they had an impact on the economic situation, as this was the biggest crisis after the Second World War.

With a poverty rate of 19%, which may worsen further, Tunisia is going back 15 years, with 470 thousand more people falling below the poverty line (loss of income)," she explained.

The number of people below the poverty line would therefore be expected to rise from the current 1.6 million to 2 million.

This income poverty affects women much more than men, who were much more exposed than men to the risks of impoverishment, and in terms of domestic and economic violence, as they were on the front line of redundancies.

The loss of income will also have an impact on household living conditions and standards of living, in terms of food, health and education expenditures. Thus, multidimensional poverty would rise from the current 13.2% to 15.6%.

The shock of COVID-19 would accentuate the financial fragility of certain sectors of activity

The simulations carried out show that the COVID-19 shock would accentuate the financial fragility of certain sectors of activity, namely non-manufacturing industries (-29%), tourism (-23%), transport (-19.6%) and textiles (-17.7%).

In addition, the study pointed out that micro and very small enterprises (MVSEs) are more vulnerable with strong regional and sectoral disparities.

Therefore, the MVSEs operating in the textile-clothing, leather and footwear sectors located in the North-East are the most impacted as well as the MVSEs operating in the accommodation and catering sector and located in the South-West and North-West.
Short- and long-term recommendations

In the short term, this study advocates mitigating the impacts and relieving the burden on populations and businesses through income transfers, as carried out by the government.

In the long term, the government must think in terms of resilience, i.e. preparing the economy to better withstand shocks, by strengthening the population's capacity to withstand shocks, through the integration of aspects of the social and solidarity economy, financial inclusion and digitalisation.

UNDP Resident Representative Steve Utterwulghe said Tunisia must focus on five priorities in order to cope with the impacts of the COVID-19 pandemic.

In his view, these priorities should include strengthening health service systems, guaranteeing social protection for the most vulnerable, supporting and strengthening jobs and SMEs, and ensuring that the macroeconomic measures currently being taken by the government benefit all stakeholders, especially the most disadvantaged.

There is also need to consolidate good governance and combat corruption, in addition to restoring confidence between citizens and the authorities.

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