Publication: Impacts of COVID-19 on the Private Sector in Fragile and Conflict-Affected Situations
International Development Association
International Finance Corporation
The Coronavirus (COVID-19) pandemic is having a significant negative impact on the private sector in developing economies, and businesses and individuals in fragile and conflict-affected situations are among the most severely affected. The pandemic has evolved rapidly from a health emergency to a global economic crisis, spreading through the real sector and posing growing risks to financial systems. Notable sector-level impacts include supply and demand-based shocks to infrastructure and private healthcare; disruptions to imports, exports, and global and local value chains; and declining agribusiness activity that threatens food insecurity, all leading to financial sector instability. This note examines these sector-level impacts and provides recommendations for how the development community can address them. It advocates, among other things, for balancing short-term, sector-level relief and restructuring efforts with planning for a medium-term to long-term recovery, leveraging upstream interventions to “Build Back Better,” and collaborating with governments and development partners. As fragile and conflict-affected situations face further pandemic-related setbacks on top of already substantial hardships, it is critical that the global development community prioritize support to these vulnerable populations.
“International Development Association; International Finance Corporation. 2020. Impacts of COVID-19 on the Private Sector in Fragile and Conflict-Affected Situations. EMCompass;Note 93. © International Finance Corporation, Washington, DC. http://openknowledge.worldbank.org/handle/10986/34857 License: CC BY-NC-ND 3.0 IGO.”
Other publications in this report series
PublicationAI Investments Allow Emerging Markets to Develop and Expand Sophisticated Manufacturing Capabilities(International Finance Corporation, Washington, DC, 2020-07)As advances in machine learning, computer vision, and robotics help manufacturers around the world improve their processes and produce new and more complex products, artificial intelligence (AI) is becoming an integral tool of modern manufacturing, and one that is increasingly important to the industry’s future. By combining large volumes of data with the computing power to simulate human thinking, AI is increasing the efficiency, capacity, and complexity of factory floors, and is introducing robotics, the Internet of Things, and other cutting-edge innovations to manufacturing value chains across the globe. Artificial intelligence is a critical enabler of manufacturing complexity that is essential for companies to produce an expansive range of sophisticated products and dynamically engage with regional and global value chains. Firms and economies can increase both their manufacturing complexity and their market competitiveness by developing the foundational capabilities and know-how needed to adopt AI and other advanced technologies.
PublicationDeep Tech Solutions for Emerging Markets(International Finance Corporation, Washington, DC, 2020-11)Deep tech companies aim to address the world’s biggest challenges. These include providing Internet access to the unconnected, reducing greenhouse gas emissions, significantly increasing productivity gains across industries, and helping to solve many other intractable problems, particularly in emerging market and developing economies. A deep tech company brings transformative technology from the lab to the market, and democratized research infrastructure and increased available funding has led to the rise of deep tech companies globally, including in emerging markets. Yet commercialization is critical to realizing the benefits of deep tech solutions, and deep tech firms often struggle to successfully commercialize their breakthroughs. Strengthening local ecosystems and investing in deep technologies are critical to overcoming this common obstacle. As development finance institutions, institutional investors, and private equity and venture capital investors explore longer-term investment strategies, deep tech commercialization offers not a tech-enabled silver bullet but a holistic approach to investing in technology solutions.
PublicationHow the Tourism Sector in Emerging Markets is Recovering from COVID-19(International Finance Corporation, Washington, DC, 2020-12)Summary of Note 95, how the Tourism Sector in Emerging Markets is Recovering from COVID-19 Tourism is an important sector that accounts for 10 percent of global gross domestic product and one in every 10 jobs. As a result of COVID-19-related travel restrictions, the United Nations World Tourism Organization (UNWTO) has estimated that international tourist arrivals in 2020 will drop between 58 and 78 percent, which puts 100 to 120 million direct tourism jobs at risk. The effects of COVID-19 are felt throughout the extensive tourism value chain, including airlines, hotels, restaurants, tour operators, food suppliers, farmers, retailers, and a wide range of other small and medium enterprises. Although all tourist destinations strongly feel the impact from the pandemic-related crisis, not all have the same vulnerabilities or capacity to recover. This note explores the factors in specific tourism destinations that contribute to pandemic-related vulnerability, as well as the factors that support the resilience of the tourism sector. Examining all these factors together provides a snapshot of the countries as well as the subsectors that are most likely to recover first, as well as those that will require greater support to weather and recover from the crisis.
PublicationWhat Gets Measured Gets Done: Using a Corporate Scorecard to Drive Greater Investment Impact(International Finance Corporation, Washington, DC, 2021-12)In 2018, International Finance Corporation’s (IFC’s) shareholders authorized a capital increase of 5.5 billion dollars, the largest increase in its history. The capital increase was based on a strategy that emphasizes creating markets and mobilizing private capital and came with ambitious operational undertakings designed to ensure IFC’s place at the forefront of development finance, and to reinvigorate development in the world’s most challenging environments. To help implement these hefty undertakings, measure progress, and motivate staff, IFC took a fresh look at how the Corporation uses operational targets to achieve strategic goals and overhauled its corporate scorecard. Institutions seeking to implement a transformational strategy, as well as impact investors and development finance institutions balancing financial and impact objectives, can learn from how the revamped scorecard balances risk-taking with prudence, innovation with traditional business priorities, and speed with governance, to drive greater investment impact.
PublicationLessons for Electric Utilities from COVID-19 Responses in Emerging Markets(International Finance Corporation, Washington, DC, 2020-09)The Coronavirus (COVID-19) pandemic and the resulting economic shutdown have severely depressed electricity demand across the globe, with acute consequences for the revenues and financial health of utilities, as well as smaller providers of utility services and off-grid companies. In many places, utility service providers also must manage the inability of consumers to pay for their services. Government support has been forthcoming, but utilities need to work closely with policymakers to ensure that programs are carefully designed in order to maintain ongoing system reforms, competitiveness, and affordability, and avoid long-lasting market disruptions. These support measures should avoid redundancy among sectors and ensure that resources are efficiently allocated and that welfare improvements are fairly distributed across the country in a sustainable manner. Investors must also understand changes to utilities’ finances and should work to support further reforms.