 Hello, everyone. Welcome to the inaugural webinar to the wider webinar series of this COVID-19 changing development. Are you any wider? We are doing our best to respond and adapt to the coronavirus epidemic. This is meant reorienting our research focus, changing how we facilitate knowledge exchange. We are pleased to launch this new online webinar series which features a lineup of feminine researchers and then the specialists working on this on this issue. We will present new research on the implications they foresee of COVID-19 for global development efforts and economic, political, and social impacts for the global south. Our first speaker in the wider webinar series is Professor Annie Sumner, a world-leading scholar on global poverty and inequality. Officer Sumner will be speaking on COVID-19, a long crisis of the new normal in developing countries. In particular, he will be speaking on the implications of the pandemic of global poverty. Professor Annie Sumner is a professor of international development at King's College, London. He is the director of the Economic and Social Research Council's global challenges strategic research network on global poverty and inequality dynamics. He is a non-resident senior research fellow of UNI wider. He also holds associate positions at the University Oxford, the Center for Global Development, and at Bhattacharn University in Indonesia. We also have a distinguished discussant for the webinar today, Professor Arif Yusuf. Arif Yusuf will speak on the Indonesian experience of what poverty is in the wake of the pandemic. Arif Yusuf is a professor of economics at the Department of Economics, Bhattacharn University in Indonesia, visiting professor of the Department of International Development at King's College, London, honorary senior lecturer at the Crawford School of Public Policy, Oxford National University, and also a non-resident senior research fellow at the UNI wider. Now in 2015, all UN member states adopted a 2030 agenda for sustainable development, which provided a shared blueprint for peace and prosperity for people on the planet now and into the future. At its heart with the 17 sustainable development goals, the SDGs, which were an urgent call for action by all countries developing in a global partnership. The first of the SDGs, SDG1, was to end poverty in all its forms everywhere. Even before the onset of the pandemic, the world was not on track to end poverty by 2030. Now the global poverty rate had fallen from 36% in 1990 to 8.6% in 2018. Poverty was expected to be 6% in 2030, but the global poverty would not have been breached. Professors will provide an assessment of how much of an impact the pandemic will have on global poverty and SDG1 in stock. Not to a few non-sterile issues. First, you should type in your questions using the Q&A feature that you see in front of your screen, but Khalid Mubi Richardson will ask these questions on your behalf to Ani Sumner and Ari Yusuf at the end of their presentations. Please keep on sending these questions as you think of them and we'll collate them and ask them at the end of the presentations. Also time permitting, you may also use the raise hand feature and ask a question live when asked to do so by us. I should also note that the webinar will be recorded and shared later on our YouTube channel afterwards. I'm now pleased to invite Ani Sumner to present the webinar. Ani Sumner will speak for 30 minutes, honored by a discussion by Ari Yusuf for 15 minutes, which leaves about 20 minutes for Q&A at the end. Ani, over to you. Thank you very much. Well, good morning or good afternoon or good evening wherever you are. Thank you for joining us with the first ever UNU wide webinar. Thank you. So I'm going to be talking about the research that we've been doing published by WIDA on the potential poverty impact of the crisis. And then I'll talk a little bit about some of the wider implications about what COVID could mean for development and how we need to think through some of these bigger questions looking ahead. So in terms of an introduction, I think the first thing to say is there's a lot of attention on one pandemic, the COVID pandemic, but potentially there's a second pandemic, a poverty pandemic, that's getting much less attention to date, but I think that attention is now going to be rising. Here's some of the headlines that we've come to so far, and then I'll talk through a bit of the research. First of all, our estimate is that somewhere between 100 million and 500 million people, half a billion people, could fall into poverty due to the poverty pandemic following COVID. So why is that? That's because a lot of people live just above the poverty line. Every 10 cents is 100 million people moving up from 190 upwards. So this could mean the reversal of 10 years of global poverty reduction and 30 years of poverty reduction in Sub-Saharan Africa, but crucially it depends on what the income shock is and it depends what governments do. So what we're going to do now is introduce the webinar poll. Ruby's going to put the poll up, I think, next. There you go. So you have one minute, obviously a very big question to answer in one minute. Basically in one minute you have to decide whether COVID will be over in five years, less than five years. When do you think the COVID-19 crisis will end in developing countries? Less than five years, five to ten years, or never it's the new normal. And I'll return to that poll later on. So let me tell you a bit about the research we've been doing. So first of all let me set a bit of context. I mentioned two pandemics and let's compare them a little bit at the outset. First of all you can think about the global attention, the impact, the critical cases, how to reduce the transmission and the policy. So if you think of COVID there's a lot of attention, enormous amounts of global attention on COVID, yet on poverty there's initially very little and actually now I think that's rising as it becomes clear that there will be a poverty impact. In terms of COVID the impact is really about the numbers versus coping capacity of health systems as one of the most important factors. In terms of poverty the impact is really about very small losses have a very high impact near the poverty line. Losses of even 10 or 20 cents can make a very big difference to people's livelihoods. So when you think about the critical cases if we think four million infections so far are rising from COVID that's a lot. If you assume a 50% hospitalisation of two million then you still have a lot of people that's rising and yet if you think about the poverty impact our estimates of the potential poverty impact could be anywhere between 100 million and 600 million people. So clearly there's an important part of the discussion we need to be having and then that points us towards the real tension here. One of the ways that the quickest way to control COVID is a lockdown whereas the quickest way to address the poverty impact is really to open up and to think about other social safety nets to accompany that. So the policy into as a vaccine hopefully and obviously the vaccine is going to be the big question over the next few years is either a lockdown test trace or when we think about poverty we need to think about global funds global solidarity funds and national safety nets. I'll say a bit about the research we've been doing and then I'll turn to some of the broader issues I think COVID raises for development. So we estimated the poverty impact of COVID. What we did was we looked at different income contractions to household income. Some of its income some of its consumption depending what data is available for each country. We used the World Bank's POVConnet dataset. We modelled three scenarios of 5%, 10% and a 20% income hit. We captured this by increasing the value of the poverty line. So you take the poverty line and then you add 5 or 10 or 20% to see how many people are vulnerable or falling back into poverty and how that differs in each country. At the moment we've done global and regional estimates and we're currently working on national estimates and so we're expecting a follow-up paper in June. We used the World Bank's three poverty lines for developing countries 190, 325, 50. These are the average for low income countries, lower middle income countries and upper middle income countries. So what did we find? So here's some of the headlines. If you take a 5% income contraction that would imply an additional number of people living in poverty of almost 85 million at the 190 global poverty line. If you take the higher lines it implies larger numbers. At the other end of the spectrum, if you look at a 20% income contraction you have of course much higher numbers of people who could potentially fall into poverty, somewhere between 400 million and perhaps as close as 600 million, depending on the poverty line you take. Then the graphs at the bottom show the 5% hits, the 10% hits and the 20% hits and how it affects the different poverty lines over time and what you can see is we've plotted poverty based on the official data from 1990 up to just before the crisis and then we've modelled our different hits for the crisis up to 2020 and there's a few things that are probably just worth noting. I mean one is I think we don't really realise that actually when you take higher poverty lines much more of the global population are living in day-to-day poverty. If you take a poverty line of $5.50 which is close to many Latin American national poverty lines then you might even have half the population of the planet living in poverty. I think in a way we focus a lot on the $1.90 and we forget actually that beyond that poverty doesn't suddenly disappear at $1.91. People move out probably very slowly and it's not one big jump into a prosperous lifestyle. So where would those new people or those new poor people live? Actually if you take the lower poverty lines you tend to find the new poor would be concentrated in South Asia and Sub-Saharan Africa. Within those there's very large populous countries of course India's numbers dominate South Asia and in Africa Nigeria is a very important part of the Sub-Saharan African poverty numbers amongst other countries. But then as you move up poverty line because of the different consumption structure in different parts of the world if you were to take higher poverty lines there's a much larger proportion in East Asia particularly at the $5.50 line. So I think that's worth emphasizing that the poverty line you take tends to tell the picture depending on different parts of the world. And if you look at the regions of the world here we have the poverty headcount from 1990 onwards and then our projection to 2020 based on those different scenarios 5%, 10%, 20% income contraction and again $1.90, $3.20, $5.50 poverty lines. You can see first of all that there's a very clear impact in terms of the kind of poverty boomerang in South Asia and Sub-Saharan Africa as people who have moved above the poverty line may well pull back under it because of COVID. If there's income shocks 5%, 10% or 20%. We also see quite a significant impact in Middle East and North Africa and so I think one issue that will be important over the coming years is the social unrest that this may unleash and probably the impact on politics of having a very large number of people suddenly facing an income shock and how that might affect different political settlements around the world. Let me say a little bit about comparing our study to two other studies that exist for comparison. There's a study by Nick Lee at DFID, a DFID internal paper and there's also a World Bank blog by Amala et al. Those use different methodologies and they come out with slightly different findings but not hugely different to what we found and I can explain why they're different and I'd also like to say a few words about their methodology and why I'm cautious about using IMF growth forecasts. So the Lee paper uses the growth semi-elasticity of poverty, that's the relationship between GDP and the percentage point change in poverty historically and then applies the GDP rates from the IMF growth forecast. The Mahler paper is somewhat similar, it uses the IMF forecast but it simply uses the contraction to interplay from household surveys and so you end up with estimates that are almost 62 million or 72 million close to 85 million. The reason I think ours is slightly higher, unfortunately they didn't make estimates for the higher poverty lines for just the 190. First of all I think there's slightly different starting points in terms of the baseline assumed for poverty prior to the crisis. Secondly I think IMF growth forecasts are really still rather optimistic. So in the 10 countries that dominate global poverty, 2,000 of global poverty in 10 countries, the forecast there is for a GDP contraction per capita of minus 2. I think 2 or 3 months of lockdown and minus 2 GDP contraction is probably over optimistic and also we'd expect the household consumption contraction to be higher amongst the poor and near poor than the GDP contraction on the average population. I think there's also 2 or 3 other reasons why I'm very cautious about IMF growth forecasts. I mean first of all there's seven or more recent studies trying to assess the accuracy after the event of IMF forecasts. The IMF tends to be optimistic that's partly because understandably the IMF doesn't want to create a sense that things are going to be really bad I think. I think there's also an issue that in fact the IMF's own impact evaluation department found that the forecasts tend to be very optimistic about shallow recessions rather than deep recessions and the IMF forecasts around the global financial crisis were very very out. So I think the IMF growth forecasts are good if you're looking at sort of five years which is usually what they're made for but to estimate poverty on the next year on GDP forecast makes me a little bit a little bit cautious. So I'm not saying studies are wrong of course no one knows at this stage but I'm saying we considered the option and we decided to go for the the contractions that we used. Let me turn next to some broader issues first whether we're talking about a health or an economic crisis and the impact of COVID and then to talk a little bit about some of the issues beyond that. I mean first of all I think it's fair to say developing countries generally have a lower proportion of people over the age of 70. So one would think and I think this is a fair argument that the economic shock may be more significant than the health shock. However developing countries often have weaker health systems. There's evidence that COVID mortality and morbidity rates are linked to poverty, ethnicity, pollution, malnutrition. All of these things are prevalent in some developing countries. There's also very strong links to hypertension and diabetes of course that's an issue for some middle-income countries in particular. There's also unknown links to tuberculosis, HIV, chronic malaria and respiratory problems. Almost a billion people cook indoors and that creates respiratory issues and I think those are some of the things that COVID will interact with and we'll see that over the next few years. All of this raises a question for me which is whether a lockdown is the only option and also whether it's even feasible in high-density areas or in areas where there's no income or no social safety, how people are going to be faced with this choice of do I go hungry or do I run the risk? It's fine for people with higher up to the income distribution to work at home and work on the internet but that's not possible for many people who work in the informal sector or in the poorer parts of society in developing countries and in rich countries. And there's a very interesting study by Dingle and Newman that finds only 5% of people in Mozambique could work at home, 25% in Mexico where it's 40% in the US or Finland. So clearly there's an issue here, I think about whether the lockdown is feasible and what it will actually achieve. Then there's the question of whether this is a long crisis or a new normal. Clearly the most important thing and this seems to be very widely accepted is until there's a vaccine it's very difficult to see how the future is going to unravel. So at the moment there are no vaccines for any coronaviruses and there's no guarantee of immunity after infection, although the recent evidence from South Korea is more positive about that. It raises the question of what if there's no vaccine or a vaccine that's less than 100% effective. Most vaccines we have are not 100% effective. We know that the pandemic will proceed in waves, WHO talks about 6 to 10 waves. Even if a vaccine is discovered rolling out to an entire population of almost 8 billion is likely to take 5 or 10 years based on other vaccination rollouts. And of course there's no guarantee that every government is going to fund this publicly and whether sometimes people might have to pay or might not get the vaccination at all. Underlying this I think is COVID could act as a super accelerator of existing changes. One issue is many people working remotely amongst white collar jobs, particularly in OECD countries. It'll become clear to private companies in particular that those jobs could be done in places like India perhaps at a much lower labour cost. This is where Richard Baldwin talks about tele-migrating and tradeable services as the new future for developing countries. I think it's also possible some of the resistance to automation around politics and people's concerns may be overridden by health concerns. I think that's an issue as well. So let me say some policy questions that are rising and then I'll turn to conclusions and hand over to Arif. So I think there's a set of policy questions, global, national, all of these depend on the length of the crisis. And then something that no one's really discussing yet is new public and private debt. Many of the world's largest companies are borrowing billions of dollars and so even very large companies are going to have to think about how the money will be paid back eventually. On the global question side there's issues about the global solidarity funds, ODA, but also technical assistance may be very fundamental in the world's poorest countries. There's obviously questions about the role of public goods around health, vaccinations, a global solidarity fund for the vaccine perhaps. There's even questions about a new Bretton words. Is this an opportunity to rethink the global system to be fairer and more equitable? The IMF already has requests for funds from over 100 developing countries that shows you the extent of what's unfolding as we speak. At the national level the good news is a lot of social safety nets are already being initiated or expanded. Ugo Gentilini at the World Bank is doing very good work tracking on a weekly basis. I think 171 developing countries, sorry 171 countries now have COVID related safety net programs. I think we also need to think about pay to stay at home, universal basic income perhaps, pay to test, pay to get people tested. The good news is global oil prices are rather low at the moment which might mean that some of the large enormous trillion dollar fossil fuel regressive fossil fuel subsidies that go into these cheap petrol at the pump in many countries could actually be transferred to poverty transfers given that oil prices are relatively low. I mean all of these questions really depend on how long the crisis is and when the vaccine appears. I think potentially there's an opportunity to rethink the global architecture. Maybe we need a new global development architecture where everyone pays in all countries and then countries are paid according to need. There's a paper by Glenny myself and others that discusses this in a wider working paper recently and then I mentioned briefly the public debt of course it's the private debt of not only individuals but companies but also the private debt. I think developing countries will lose export income, remittance income, extractive income, tourism income, capital flows and be faced by higher spending. Does that mean the future's austerity or does it mean higher taxes and then on whom? Is it taxed on the rich? Is it taxed on capital? I think many of these policy questions are only starting to be put on the table and the social safety net one seems to be moving quite quickly whether it's enough is another question but certainly governments are starting to move because of the consequences of not putting place safety nets. Let me make some conclusions. I think first of all the poverty impact of the crisis is likely to be substantial. It's difficult to see how it wouldn't be even in our lowest case scenario and the other studies it may be around a hundred million or something like that. Then clearly it comes down to questions of if and when a vaccine is available, how effective it is, who gets it, who doesn't, who pays, that will decide how global poverty evolves over the next ten years. I think there's three scenarios, at least three scenarios. One is a kind of best case. There's a hundred percent effective vaccine in the next two years. Governments around the world commit to publicly funded rollout even then it could take five or ten years to vaccinate. So clearly what appears to be a temporary poverty impact may be long even in the best case scenario. There's a kind of new normal case that's worrying in the sense that there might be a vaccine but then some people get it, some people won't. There might be a separation of the vaccinated and unvaccinated, a kind of new apartheid between those who have immunity passports and those who don't have that. That might mean different labour markets. It might mean freedom of movement for those who have the vaccine or can afford it and those who can't would have different citizen rights. And then of course there's the long crisis which is a bit like where we are now which is maybe there's no vaccine. There's no vaccine for other coronaviruses. Maybe there'll be a partially affected one that will be not that much different from where we are now. Maybe there'll be better drug treatments. Maybe we're going waves and each country will go in waves of COVID until immunity levels rise sufficiently to prevent future transmission. That would be a very stark future for global poverty and so I think these are some of the questions we need to start thinking about over the next few months. Thank you. Just before we hand over to Arif, I just wanted to also share with you Andy, the results here of the poll as well. So I think at the beginning of your talk we can see that about half of the people actually thought that the crisis would end in the next five years so I think you've really given us something to think about there definitely. That's really interesting. What I noticed when the poll was happening is a lot of people clicked less than five years first of all and that went up to 90% and it suddenly dropped down. It made me think whether people can people shift their vote or once you voted you voted? I think people can shift but I think it was also people maybe who were early on quite confident with themselves and then thought about it a bit more. Maybe this is a trick question. Okay thank you very much. Thank you. Over to you Arif. Thank you very much. Thank you. I hope that the country case of Indonesia may compliment what Andy has just presented. So basically I'm going to talk about three things. The first is a brief headline about what's happening in Indonesia in terms of the COVID-19 pandemic and then I'm going to talk about its impact on some economic indicators and also some government policy responses and then I also would like to share my thought into something slightly methodological which is translating the economic growth into poverty impact but also talking a little bit more about how the distribution is of the impact. I mean within country distribution is of the impact. Also acknowledging that there are some kind of non-natural distributional impact that may affect some sort of the magnitude of how the crisis can turn into poverty. So in Indonesia today we already reported around 14,000 something cases and a hundred more already more than 1,000 deaths. So this is between the numbers between India and Thailand in terms of the cases. However the number also needs to be cautious about it because Indonesian testing rate and its underreporting is actually among the world world was quite very low. You can see that we are low compared to our neighbors in terms of the number of tests per thousand people there and also I just would like to share some worrying scenarios that was published by the now famous center in Imperial College which actually still give us a risk of catastrophic number of deaths simply because we have quite large number of population too and there is a bit worry too because compared to other countries in the region our containment measure is a little bit softer version of what have been other countries doing. For example India they are more strict compared to Indonesia or even most of the Indonesian case. Jakarta is a bit okay but it's a really it's actually a softer version of lockdown so still not there. Now let me talk about economic impact so the growth economic growth this year is projected between the worst scenario minus 3.5 this from coming from the World Bank and then as you may expect the most optimistic scenario is the one coming from the Ministry of Finance is 2.3% even though Ministry of Finance still has open this possibility of minus 0.4 and also it's quite heterogeneous the forecast but what is interesting is how is the profile of the recovery so it's also fair is some institution like Oxford Economic or IMF is very pessimistic about the V-Shift but some other not economic intelligence unit for example the profile will look like you said which is the economy growth in 2021 and beyond will still be normal 5% like we used to be which is which is not enough to rebound and we actually have responded the government has responded with some kind of fiscal stimulus it's a budget that is so it's increased budget deficit from what is allowed normally in the old institution which is 2.5% now can be up to 5 or more than 5% and then with that money we allocate around 27 billion dollar 2.5% for the GDP which can be spent for various items like various spending like such as social assistance and then health spending and also industry support in order to avoid one of them is in order to avoid massive layoff and then of course the most important one is I think social assistance and here is where where the matter is a bit delicate why because here for example the last this data suggests Indonesia is actually among close to 70% of Indonesian actually either poor or vulnerable so this is among the highest in the region 68% of Indonesian is either poor or vulnerable so among so this is the word so this thing will not only make our health system under pressure but will make our social safety net system is heavily under pressure because COVID because with with with the heavy with the intensive vulnerability it means there's a little bit of shocks and these people have to be protected and start to be as many as many so that I can see that this is how the government respond it's quite interesting why because actually we here add extra almost 30% of of additional social assistance normally around 200 trillion rupiah now now it was increased by 56 trillion rupiah and what is interesting is this is not only given to the poor by national standard the poor national standard is only this color here is this color so this is the second diesel three third diesel four or five diesel even six diesel will be the beneficiary of this extra so can you can you imagine how Indonesian social safety net system now is really under pressure because we have to protect all these people too and as you can see that most of them are in the form of this for example a special cash transfer this is very special cash transfer for COVID which actually targeted the fourth fifth diesel and this is targeted four to six diesel and this also targeted to five or six diesel something that's never been done before so this is what I said that we we actually have quite good improvement in the system of social safety net after so many reform for the last maybe 10 years yeah but now this system is under heavy test so so maybe this is also a blessing in disguise so so we can learn from this in order to make an improvement in the future so the impact on poverty is also various they are already several studies but it impact but more or less if I have if I may have an opinion is incomparable to what Andy suggests but Andy is specific on 1.9 purchasing power which is international property line but this is a national property line but and the national property line is actually not so much different than than than extreme property line if if we want to look it that way so the impact on poverty estimated to increase by the most positive positive or optimistic scanner is 0.44 percent to 3.2 percent it's translated into actually 1.2 million to almost 9 million people and the method more or less some of them using the similar method at Andy which is assuming non-neutral sorry neutral distributional impact some of them for example Smeru they use past pattern of crisis in order to see the impact which is different or heterogeneous between group people adb for example using some sort of modeling with where actually I'm involved myself there so however the impact on poverty actually will be also affected by by by the incidence how this effect of the crisis created by COVID-19 impact differently across different part of the population so now we are talking about things beyond that I hope that I can compliment what Andy discussed before which is the distributional impact or even the economic impact the impact of the COVID pandemic on within country distribution and in the literature actually the the theory or the the theory varies yeah maybe some many of you recognize this book by Walter Skadel which say that actually pandemic may create a labor shortage so that will increase the price of labor I mean the labor the remaining labor so pandemic seems most likely to be equalizing and also not studied by by the recently by Barrow and and and colleague which suggests actually using Spanish flu as the example or the staircase study actually the pandemic decreased return on stock yet those three those two cases is actually in the past where the pandemic is a lot more deadly than I think what will be today so the different will be the the the effect will be different and there are others very new study by IMF researchers Pursary and colleague which suggests actually otherwise based on the pandemic the past two decades actually there is a tendency that actually pandemic may actually in equalizing you can have so then there's the shape I think of the growth incident curve that will eventually have the effect on the distributional effect of the COVID depend on various factors you know first I think now we're we're not we're not talking about the distributional effect of pandemic per se but I think what meant the more is it is a more effect of the containment which actually very widely by by countries because it depends on various factors there is country specific the resources and things like that and but most likely cases will hit everyone so the GIC will actually below zero unlikely to create labor shortage yeah because of the major and what is seen now is different than the past but also may affect may have some kind of scaring effect it precaution saving that may actually income equalizing and yet lockdown effect most likely at least in the case of Indonesia yeah predominantly predominantly urban so agriculture might be at least maybe hit less services like transport and travel will be the worst hit in Indonesia for the last 10 years is service actually tend to be income equalizing so the income equalizing so the big hit to the sector will have the opposite effect manufacturing will be is labor intensive so it's will be the hardest hit yet urban poor and national middle class that will be hard that's the case in Indonesia region and sector which happily dependent on tourism will be hit hardest actually in Bali in Indonesia for example we didn't even impose lockdown it already locked down naturally because there's no activity at all 90% of activity in Bali are from tourism so we don't need any presidential decree or government decree to do the lockdown they already locked down and tourism actor has extensive the chemical refurbishing effect especially in Bali informal sector lockdown is very hard to enforce so it it will be difficult to enforce because if they if they follow the lockdown they won't then won't leave so so informal activity is sustained only on daily basis lockdown or lockdown they will they will do it they will do their own activity yes there is social safety net which is matter but in many developing countries especially like Indonesia you know that the fiscal space is limited and for country like Indonesia even Indonesian geography is unique so you have you know like quite big gap yeah in terms of the development outcome across island so they also have something unique to the Indonesia so so uh in all it's a bit hard to predict yeah to what kind of the uh distributional impact of this COVID crisis in Indonesia but but it could be both it could be like similar to the 97 98 crisis yeah which is actually income equalizing as i will as i will try to show you so uh a sectoral impact is one of the key factor that will determine the the you know the the distributional effect and then this is the preliminary analysis that i did for adb last week or last two weeks using cg model a tool which showed that uh through various mechanism that actually the sector that will be affected by by this crisis is mostly manufacturing and then to some extent services uh so and and and this is confirmed by by for example by by economists in in in intelligent unit forecasts which suggests that uh industry and service will be the hardest it but agriculture will be a lot less so it's just for illustrative purpose i i i i try i i try to create or to set up a micro analyze micro simulation analysis using the national associate of my survey data just to take into account the sectoral bias uh that was you know guided by these two studies uh by representing household expenditure by human capital of the household head which one of them here we can identify the sector where all this household depended on so for example then using this estimate of the model i illustrate that in indonesia if all this 4. percent reduction in growth is contributed by agricultural sector only this will be the growth incidence it will be income in equalizing but if this 4. percent reduction in growth is contributed by service sector only this will be this will be income equalizing this will be income in equalizing but this also tend to be income equalizing so so sector matters so now what if i plug this just for illustrative purpose what do i plug this this scheme or this characteristic of this 2020 forecast by a EU which is always supported by my own analysis here to the tourist model and this is the result so this is the result so it's tend to be income equalizing so the the rich will be hit harder than the poor and of course they will have an implication on how we calculate the impact on property uh it's not much but still matter so for example if you assume distribution natural so the impact on property would be 1.3 percent additional or 3.6 million people but with uh this profile it will be a bit softened yeah so into 0.9 percent or 2.5 million however with sectoral bias for example i can also pinpoint and like the distribution natural which is there's no impact on genetic coefficient i can still have a guess of what kind of what is the impact of this 2020 projection which is caused by covid mostly uh have on genetic condition which is actually slightly income equalizing okay so this is my final remark so Indonesia is still struggling to mitigate the COVID-19 pandemic serious health fatalities still remain uh Indonesia is a good example of country where where it has high profile vulnerability so in this case that we are not only concerned about the collapse of the health system but also the concern about the collapse of the social safety net system it is actually a good thing for Indonesia because we already have been doing reform and progress in the improvement of the social safety net now the system is under heavy test so for future improvement it is a good thing uh and then using uh my analysis about poverty impact uh 2.5 million uh at least will become poor and this is actually equivalent to three years reduction not decades like what Andy said but in super indonesia three years reduction about distributional effect of COVID-19 uh well because the analysis is still preliminary so still uncertain but at least so far my analysis suggests that it maybe maybe tend to reduce inequality slightly and in the last I would like to introduce because this is unprecedented situation and also will invite some unprecedented research agenda so one of them is what not many people have talked about yet is the growth incidence not the the impact of the covid in certain but the growth incidence of the economic recovery I think that also matter because not only poverty uh is the biggest issue in SDGs yeah but also inequality is also the biggest issue in SDG so I think that's that's what I can share uh I I I written to Kunal thank you Andy and Ari for a very interesting presentation so we have a few questions already and I'm going to ask Ruby to sit to ask these questions to you thank you very well and thank you both very much for your wonderful presentations today so we've already got a few questions coming through on the Q&A for anybody who is watching who has a question please use the Q&A button down below and once we answer the questions as well then we will share each answer so that everybody can see as well uh so one here let's see what we've got um so interesting one here to start with I will just mention that we've got 15 minutes so we'll try and keep these fairly short if possible so climate change uh is actually improving given some of the circumstances that are in place uh to mitigate the spread of covid 19 so this is uh this is actually helping SDG 13, 14 and 15 in a positive direction uh so do you see this as sort of having positive impacts on health and what are your comments on how it may impact some of the other SDGs as well other than and obviously taking into consideration the potential poverty increases um should should I go first um so um well of course it's a very it's uh an unexpected um or some kind of silver lining that there's a climate benefit to what's happening um I guess my hope is that uh the sheer impact of what's happening uh makes people think a bit more uh about over consumption in the north as well as consumption in the south particularly this sort of more sustainable forms of consumption and so I'm not sure whether um there'll be a permanent impact on on the climate change uh after this because but it it presumably um it's made people stop and and think a little bit particularly those who have um in policy circles um but maybe there's an opportunity now as I mean and when I mentioned maybe the crisis is presents an opportunity to think about the global architecture and obviously climate would be centered to thinking about or rethinking the global architecture around that thank you um so another one that came up here and I think it was uh there was an interesting element added to this with Arif's presentation as well is uh Andy for your estimations uh do these estimations on poverty take into account uh any instant government assistance so for example during the pandemic in some countries like Thailand the amount of money that is that is available is greater than the level of the poverty line so since the poverty rate is measured by using expenditure may the effect on poverty be smaller um could we have several different scenarios perhaps based on how governments in developing countries are addressing the problem through direct cash transfers yeah okay so you go for Arif yeah yeah thank you uh so yeah I think I am not I don't even know exactly in Thailand now but yet in Indonesia uh I think uh the it's not it's not the the result of the analysis is only plugging some number from other people's forecast through growth so it so it's not necessarily already accounting for the impact of the government assistance but uh are we revising that but the analysis you know done done by other institution like adb already taken into account of that and I did also other analysis which actually suggests that uh in term of the economic growth the stimulus in the Indonesia introduced uh is still far from mitigating the the recession of course because uh the 25 billion uh 25 billion uh yeah the the the 405 405 trillion dollar europea is actually some coming from the deficit but most is actually primary allocation from other spending uh and as you can see from my slides before actually the addition of the social assistance is only 28 percent of the existing uh so so the impact on poverty of course it won't it won't uh don't have uh you know like full compensations of the impact and also many of the money actually goes to non poor by national definitions right so it means actually this this this vulnerable people they won't become poor by national standard they just they just has less utility less welfare so we are giving them we are giving them some compensation so they are still at least not get as much as hardship that they get not necessarily they be coming for so the statistics of the poverty is may or may not be affected by this because they are touching uh even the six desks of the distribution so so that's so that's uh so my my my my guess is it won't it won't it far from enough to to mitigate the impact and then you see poverty line as a guide or not that the poverty will be impacted it's not necessarily giving us a clue or how poverty will keep up and down because many of the money goes even to people beyond the poverty line so that's what i my my my uh comment on that thank you did you have something you would like to add to that as well handy uh so our global and regional estimates did not take account of government assistance because it's it's not possible in the the way we do it you need the kind of cge model that a reef has um it's possible i suppose we could come up with some assumptions it strikes me that um some of the governments in east asia after they faced a very severe crisis in 97 98 introduced social safety nets and so in a way those countries have seen uh a very real kind of um how this how this can play out previously uh of course in in in uh in that period there were very large poverty impacts across east asia and very large political impact to the consequence um i think if if governments are providing money that's equivalent or greater than poverty line that's that's very good news um and i think um we can have a think about modeling some of these different scenarios in in future work um it does require a global model more like um if free uh and um there's one at the australian national university that the ilo have used uh which would be similar to the approach that um a reef has taken so far um so i think that's that's the answer on that one thank you very much uh we've also got a question here from from eva who's actually uh in our mozambique team and uh she says that both presentations focused on the income effects what about food shortages food price spikes and those sorts of things are they captured indirectly or would they potentially exacerbate the effects or could they work against the equalizing effects that arif was talking about as well i think i think the the effect if it's if it's uh you know if it's work through market uh that is already taken into account in most most of the modeling analysis as well in particular the thing that i did yeah uh in the model general equity modeling but what i think is more interesting is other relative question that i've been reading is about this is not necessarily an economic issues but this is necessary is also a public health issue so should should should should we consider also public health issues here uh well of course uh i i i'm i'm pretty strongly actually in the beginning of the crisis in indonesia i was pretty strongly uh placed this crisis is a public health perspective so that's why my my initial analysis that i share with public and i also share with government is actually the comprehensive analysis of the economic cost by modeling by taking taking into account that the content measure may have effect on a certain economic effect agenda but also actually beneficial in terms of the long run and medium effect because if you don't content properly this crisis then you have a permanent impact which actually will also give you a constraint on future growth not and then the not and also if you have like catastrophic fatality uh economic is about welfare not about economic growth but in many government across the world they forgot so when i introduced for example that economy cost should include the failure of statistical lives to those scenarios so that people start to see well this is the economic cost the true economic cost you have to include the cost of the avoidable preventable life and then you aggregate it over 10 or 20 years and then measure in in the frame a better framework of cost with analysis and people start seeing this in the nonsent government uh start realizing that although a bit late but so so now uh we are i think we are you are better uh looking at the you know looking at the perspective that is also longer so i think that's my i feel also if i if i may uh there is some question about sector this services sector for example services sector uh is is very heterogeneous and then actually kuno andi and i has actually another line of research which which which we discussed about structural transformations and how it affects inequality and where how this particular sector actually has correlation with inequality and and and we address we acknowledge that the within sector distribution is also mannered so i just want to keep a remark that this analysis actually still ignoring the within sector distribution because in within sector within sector we have finance sector but in indonesia many of the services sector is actually trade sector which is quite informal and they incorporate much people at lower income people so i think i will update this analysis in your future and maybe i don't maybe i can share it with everyone that would be fantastic thank you on that note as well i will just mention that everybody will receive an email with the recording of this podcast sorry the recording of this video webinar and that will also have a link to the slides that have been shown here today the videos and also the research that andi particularly presented that is a wider webinar a wider paper as well and we can also include some links to some of the other relevant research to some of these questions now we just have two minutes left so we'll take a final question here let's just take this one we've got alia khan and she says do you think that there will be a push for formalizing the informal sector in order to extend the social protection coverage to unregistered informal economy workers either of you like to take that one before andi maybe i will have a comment a bit as i as i suggested just before that indonesian now is indonesian social safety net system is under heavy pressure why the heavy pressure because we we are now have to consider all this per million million desire beyond poverty desire or one desire and in this region of vulnerable people there are so many informal sectors we are now starting to look at the informal sector people who work in informal sector in motorcycle you know taxi because they also need it now we are start giving cash to them we'll start giving cash to them those people are not much traditionally within the social safety net system so we are not thinking of doing it we are doing it so this is informal people so we are not thinking of doing it we are doing it and i really appreciate what government has done here so i think this will be a good milestone in the improving of the indonesian social safety net system to take into account there whether or not it will lead to more formality of the sectors well there's another issues but at least we're giving them cash and then i'm sure this is a good steps can i just say so several questions on country specific estimates and i can say actually that andy is working with his co-authors on this hopefully we should have a working paper on this very soon because obviously they're really important questions about within the region effects depending on whether you're a command exporter or somebody or a country like tourism and so on and andy is obviously working on these sorts of issues so hopefully we'll have a working paper on that very soon i should also mention that andy and arif also have a paper in indonesia looking at sector transformation inequality and inclusive growth on our website anyway and so that's our paper you should look at which essentially examines the relationship in sector transformation and inclusive growth in a way that perhaps hasn't been done before and that's worth looking at too um this is what was and if i may ruby uh to say that we should also mention the next webinar which is going to happen on the 2nd of june by professor ewin ewin ang and so please do join us virtually for that webinar registration details are already possibly online soon and we look forward to seeing you there and thank you so much andy and arif for your presentations and the really the big question at the end is to think about what should rich countries do given what we're seeing now on the potential inequality in terms of how they can provide support to the to the poorer countries and that's a bigger there's a big question that they need to think about thank you so much all of you and we can start the webinar now thank you bye bye