By Turhan Saleh, UNDP Ethiopia Resident Representative
COVID-19: How to live with risk and succeed
March 31, 2020
I write this from Ethiopia, a country that is facing a pandemic threatening an impressive record of development progress. Ethiopia has seen its Human Development Index rise to 0.470 in 2018, an increase of almost 36 percent in less than a generation, accompanied by average annual growth of real gross domestic product (GDP) of 9.5 percent during 2010-18, one of the highest rates globally. This is now at risk of at least partial reversal.
To complicate matters, COVID-19 has struck Ethiopia, the second most populous country in Africa, at a moment of heightened vulnerability arising from multiple sources. Where do these vulnerabilities come from? To begin with, the country is in the middle of a crucial economic reform programme tackling significant macroeconomic imbalances that are the unintended consequences of rapid growth and development. Ethiopia is simultaneously undergoing a radical political transition to democratic governance that has triggered its own uncertainties and risks. There is another crisis at an advanced stage: a locust invasion combined with unseasonably late rains that are threatening production and livelihoods in some of the most vulnerable regions. To cap it all, traditional practices and limited public awareness, compounded by poverty, could substantially worsen the trajectory of the pandemic.
From the perspective of the UNDP team in Ethiopia, this context – strong foundations but a future imperilled by a Black Swan event – has concentrated minds and exposed some serious gaps in ‘the way we do development’. Two stand out, in particular:
- Risk management – the missing development practice
Many of us are aware of the complex and sophisticated models, methods and systems that the banking industry, for instance, has had in place for decades to understand and manage risks – albeit with uneven results. We are also aware of the stress tests that banking regulators have applied since the Great Recession of 2008 to gauge the ability of banks to withstand systemic shocks. In the arena of development policy, there is considerable research, practice and experience in managing macroeconomic shocks. But as the nature, source, scope, intensity and occurrence of risks has qualitatively and quantitatively changed – radically – over the past decade or more, whether from climate change, pandemics, economic contagion or social unrest, there has not been a commensurate appreciation of and investment in an understanding of risk on an economy- and society-wide basis let alone the development of analytic tools, institutional designs and policy instruments to address them except on a piecemeal, fragmented and reactive basis. COVID-19 has exposed this glaring shortcoming with painful clarity and destructive effects even in the most advanced and wealthy countries.
- Business continuity of critical government functions – lost in the rush
As the pandemic has struck in developing countries, we have seen at least three immediate reactions: a sharp and understandable focus on public health issues; an international development community, both resident and global, that has quickly updated its risk assessments and activated business continuity plans; and the most advanced parts of the private sector, whether domestic or international, swiftly adjusting their operations in response to escalating risk. Something critical, though, has been lost amid all of this activity. As development partners gear up to support Ministries of Health and the continuity of their own operations, what happens to the rest of government? It’s the other elephant in the room that very few people seem to have noticed so far. As the pandemic exacts its toll, how will law and order be maintained? What will guarantee the continuity of electricity and water supplies as critical staff fall sick or worse? What will happen to publicly-provided telecoms services, maintenance of the internet backbone and connections to intercontinental submarine cables? What of the resilience of payments and settlements systems managed by central banks?
If any or, in the worst case, all of these and other critical institutions and systems start degrading significantly or even falling apart, then the consequences would be severe. The crisis would turn swiftly into catastrophe and in the most fragile contexts, potentially collapse. Yet, many developing countries and many governmental entities do not have the rudiments of risk management in place, including business continuity plans for critical government functions. And the thought of stress testing the resilience of public institutions to systemic shock is unheard of in most places.
UNDP in Ethiopia is trying to tackle this shortcoming head on, in partnership with the Government. While it is early days and there is a lot still to learn as we go along, we are launching an initiative that looks at a core set of public institutions that are critical to keeping Ethiopia operating effectively in the wake of the pandemic. We think this will require addressing capabilities to:
- effectively manage ‘whole-of-government’ coordination, decision-making and monitoring, to provide a full view of the unfolding situation, identify options for ‘joined-up’ action and review the effectiveness of interventions;
- assess risks and map out scenarios specific to different areas of operation;
- determine the criticality of different operations, identify core tasks/services and associated staff and systems necessary for continuity of function;
- design standard operating procedures (SOPs) to maintain minimum service levels even in the worst-case scenario;
- train staff quickly to understand and apply revised procedures and protocols, using virtual methods;
- develop protocols for maintaining the safety of staff and systems;
- design and quickly establish alternate working arrangements and workflows, using innovative solutions through tech applications and other means, including for ostensibly prosaic but pivotal functions such as procurement;
- quickly test and rollout e-governance and e-service provision for key functions, encouraging online rather than in-person contact;
- provide access to essential resources/supplies to contain the spread of the virus such as temperature-testing equipment, gloves and masks, and other equipment and materials, as needed; and
- adopt incident management (crisis/emergency/disaster response and recovery) and business continuity practices.
We are about to start on this approach, and we expect the task ahead will be challenging. We believe our support could make a real difference to the country level response, and maybe even break some new ground. The good news is that Ethiopia is a great place to start as it is already playing a leading role in bringing Africa together to tackle COVID-19. At the same time, more and more development professionals, both within and outside UNDP, are beginning to recognise the importance of this approach. Time to get to work!
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