Incentivised manufacturing is the key to economic growth, says the writer. Picture: SUPPLIED
Incentivised manufacturing is the key to economic growth, says the writer. Picture: SUPPLIED

About 195-million full-time workers are expected to lose their jobs in the second quarter of 2020 due to the Covid-19 pandemic, the International Labour Organisation (ILO) has warned.

In a new report, the UN agency that sets global labour standards says huge losses are expected across the accommodation and food services sector, manufacturing, the retail and business sector and administrative activities.

SA already had record unemployment of more than 27% before the coronavirus struck.

The country went into a 21-day lockdown on March 27, bringing most economic activities to an abrupt halt. President Cyril Ramaphosa announced the lockdown in an effort to curb the spread of the coronavirus in SA. The respiratory illness has infected more than 1,700 people and has resulted in at least 13 deaths in SA.

In its report, the ILO said the Covid-19 pandemic “far exceeds” the effects of the 2008/2009 global financial crisis, which saw the collapse of financial institutions and a marked downturn in economic activity.

It said more than 81% of the global workforce of 3.3-billion are currently affected by full or partial workplace closures.

“Some regions, particularly Africa, have higher levels of informality, which combined with a lack of social protection, high population density and weak capacity, pose severe health and economic challenges for governments…,” the report said.

On March 25, UN secretary-general António Guterres launched a $2bn (about R38bn) global humanitarian fund to support businesses, workers and households against Covid-19’s effect on the world’s poorest countries.

ILO director-general Guy Ryder said workers in both developed and developing economies were facing a catastrophe due to the rapidly spreading coronavirus.

“We have to move fast, decisively and together. The right, urgent measures could make the difference between survival and collapse,” said Ryder.

On Tuesday in SA, a special Covid-19 lay-off benefit that will operate through the Unemployment Insurance Fund (UIF) was finalised when business, labour and government finally reached agreement on the scheme in the National Economic Development and Labour Council (Nedlac).

The scheme is the single biggest government initiative to provide relief to those in formal employment who will lose their income due to the lockdown.

The UIF has said that it has R30bn in immediately accessible funds drawn from its accumulated reserves to fund the scheme.

Ryder said Covid-19 was the greatest test for international co-operation in more than 75 years, and that with the right measures in place, its effect and the scars it leaves could be contained.

“If one country fails, then we all fail. We must find solutions that help all segments of our global society, particularly those that are most vulnerable or least able to help themselves.”

mkentanel@businesslive.co.za

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