Chart of the day: The UN's 5-point framework for a socio-economic recovery

The COVID-19 pandemic is much more than just a health crisis, and may have erased all progress in human development from the past six years by increasing inequality around the world, according to a new report from the United Nations.

In COVID-19 and Human Development: Assessing the Crisis, Envisioning the Recovery the UN Development Programme (UNDP) says that, in some aspects of human development, the pandemic has created levels of deprivation not seen for 40 years.

The report uses statistical modelling simulations to forecast the impact of the pandemic on the UN’s Human Development Index (HDI). It says the simulations predict a steep decline in 2020, led by “a massive setback” to education from school closures: “The decline in the index – reflecting the narrowing of capabilities – would be equivalent to erasing all the progress in human development of the past six years.”

This year could see the first overall decline in the HDI since it was first created in 1990 to study changes in education, health and living standards, the UN warns. Developing nations will be the hardest hit.

“The world has seen many crises over the past 30 years,” said UNDP chief Achim Steiner. “Each has hit human development hard but, overall, development gains accrued globally year-on-year. COVID-19 may change this trend.”

Incomes have plummeted as measures to contain the virus have brought about the greatest reduction in economic activity since the Great Depression of the 1930s. The focus on treating the virus could lead to an extra 6,000 preventable childhood deaths every day over the next six months.

School closures mean fewer children are being educated than in the 1980s and, in lockdowns, people without internet access are excluded from society. The pandemic has increased inequality by excluding people from the necessities of 21st century life.

Building a fairer future

But the UN says the crisis presents the world with an opportunity to build a better future in which everyone can be whatever they aspire to be in life. Some effects can be quickly reversed. Reopening schools would mean education would “immediately bounce back”.

Other impacts will take longer to reverse but if the right policies are put in place, the UN says we can reduce inequality and build the capacity to cope with future crises without harming human development.

For example, closing the gap in internet access in low- and middle-income nations would halve the reduction in human development in those countries caused by COVID-19 at a cost of just 1% of the amount already pledged to mitigate the effects of coronavirus globally.

The voluntary cooperation of billions of people in maintaining social distancing shows we can work together to bring about change. “If we needed proof that humanity can respond collectively to a shared global challenge, we are now living through it,” the UN says.

The UN’s five priorities for a socio-economic recovery from the virus are:

1. Protecting health systems and services.

2. Ramping up social protection.

3. Protecting jobs, small- and medium-sized businesses and informal sector workers.

4. Making macroeconomic policies work for everyone.

5. Promoting peace, good governance and trust to build social cohesion.

The Great Reset

The UN’s declaration that the crisis is an opportunity to create a better world mirrors the World Economic Forum’s call for “The Great Reset” after the pandemic. The initiative aims to chart a route to a fairer, greener future.

Supporters have likened the opportunity to create change on this scale to the situation at the end of the Second World War and have called on world leaders to eradicate inequality, halt climate change and create an environment in which everyone can achieve their potential.

Launching The Great Reset, Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said tragedy need not be the only legacy of COVID-19.

“On the contrary, the pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future,” he said.