The limited degree of automatic coverage for workers and businesses drives a focus on
emergency support-of-wage bills for companies and direct transfers to individuals. More
companies will fail in such economies. The crisis has severely affected many emerging-market
economies and the countries will need to be innovative and highly targeted with limited funding.
The countries have large informal sectors and limited resources, which has led to more modest
relief and stimulus packages.
These countries face a funding gap: their central banks have limited “headroom” to intervene,
and they have lower debt resilience because of higher debt-to-GDP ratios and higher costs of
debt. The global scan of countries’ approaches to delivery suggests that there are three crucial
success factors. The first is to scale up social-support infrastructure. Countries without sufficient
infrastructure need to create innovative disbursement channels rapidly. A second key success
factor for delivery is to strengthen digital delivery. Real-time tracking is critical to enable
effective delivery. Lastly, it is critical that governments design interventions in a way that
accelerates delivery. Furthermore, the stimulus will only be effective if individuals and
businesses spend, rather than save, what they receive. These trying times have tested the best of
the best. These challenges will initiate a new trajectory of work ethic and technological
applications the world over.
Muhammad Ammar Alam, a graduate of the School of Economics, Quaid-e-Azam University Islamabad, specializes in political and development economics.
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