THE TRUST DIVIDE: HOW COVID-19 EXPOSES THE IMPACT OF INEQUALITY ON CITIZEN CONFIDENCE IN GOVERNMENT - OECD
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THE TRUST DIVIDE: HOW COVID-19
EXPOSES THE IMPACT OF INEQUALITY ON
CITIZEN CONFIDENCE IN GOVERNMENT
Alejandra Botero
Pre s id e n t ia l Ad vis o r
Delivery Unit
Es t a p re s e n t a c ión e s p rop ie d a d in t e le c t u a l c on t rola d a y p ro d u c id a p o r la Pre s id e n c ia d e la Re p ú b lic a .
COVID CASES IN COLOMBIA AND THE WORLD
Covid-19 cases Worldwide Colombia Covid-19 cases
450,000 45,000,000 14,000 1,200,000
400,000 40,000,000
12,000 1,000,000
350,000 35,000,000
10,000
300,000 30,000,000 800,000
250,000 25,000,000 8,000
600,000
200,000 20,000,000 6,000
150,000 15,000,000 400,000
4,000
100,000 10,000,000
2,000 200,000
50,000 5,000,000
0 0 0 0
04-Feb
11-Feb
18-Feb
25-Feb
03-Mar
10-Mar
17-Mar
24-Mar
31-Mar
05-May
12-May
19-May
26-May
06-Mar
13-Mar
20-Mar
27-Mar
01-May
08-May
15-May
22-May
29-May
07-Jan
14-Jan
21-Jan
28-Jan
02-Jun
09-Jun
16-Jun
23-Jun
30-Jun
07-Jul
14-Jul
21-Jul
28-Jul
05-Jun
12-Jun
19-Jun
26-Jun
03-Jul
10-Jul
17-Jul
24-Jul
31-Jul
31-Dec
06-Oct
13-Oct
02-Oct
09-Oct
16-Oct
07-Apr
14-Apr
21-Apr
28-Apr
04-Aug
11-Aug
18-Aug
25-Aug
01-Sep
08-Sep
15-Sep
22-Sep
29-Sep
03-Apr
10-Apr
17-Apr
24-Apr
07-Aug
14-Aug
21-Aug
28-Aug
04-Sep
11-Sep
18-Sep
25-Sep
Daily Cases Daily Cases
Moving Average 7 days daily cases Moving Average 7 days daily cases
Cumulative Cases (right axis) Cumulative Cases (right axis)
Source: Instituto Nacional de Salud, Our World in Data Oxford University
COVID CASES IN COLOMBIA, OCTOBER 18 959.572 858.294 7.201 28.970 Registered cases Recovered New infections Deaths
NEW NORMALITY DUE TO COVID-19
1. REACTION 2. ADAPTATION 3. REACTIVATION
• Public health emergency • Gradual reopening of • Total reopening of
declaration: March 12. economic sectors in economic sectors
coordination with local
• Economic, Social and government (with • Selective isolation:
ecological emergency: exceptions). September 1
March 17.
• PMI extension until August
• Preventive Mandatory
Insolation (PMI): from 31
march 25- April 27.
• PMI extension until April
27th.
march - april may - august september - todayRECOVERING TRUST
Confidence Indexes
40
32.3
29.7 28.3
30
20 13.8
10 7.1
12.2
8.5 9.8 1.5
0 -3
Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
-10 1.2
-9.5 -8.5
-11.2
-20 -23.8 -25.5
-21.3 -20.8 -21.6
-30 -35.8 -25.4
-34 -33.1 -32.7
-40 -35
-41.3
-50
Commercial Confidence Index Industrial Confidence Index Consumer Confidence Index
Source: Fedesarrollo.PERMANENT CHANNELS OF DIGITAL COMMUNICATION
INCREASE OF ICU BEDS AND OCCUPANCY FOR COVID-19 CASES (MAY-OCT 2020)
SOCIAL INTERVENTIONS TO TACKLE COVID-19
WERE FOCUSED ON THE MOST
VULNERABLE POPULATIONS
Households in poverty and vulnerability
with at least one cash transfer
To mitigate the effects of COVID-
19, a survey named Sisbén IV
was used to classify the 5,925,260
population between: extremely
poor, moderate poor, vulnerable,
no poor either vulnerable.
89%
• With this classification process, it of
2,538,219 households
was possible to focus efforts
on the extremely poor and
moderate poor groups. 38%
of
households
Before COVID-19 After COVID-19
The coverage of cash transfer programs increased from 38% before Covid-19 to 89%.ADDITIONAL SOCIAL INTERVENTIONS
AGAINST COVID-19
Programs Cash transfers as a response to the pandemic
(COVID-19)
Three cash transfers, each for USD 41,6 to 3 millIon poor and vulnerable families. (1,2 extreme
Ingreso Solidario
poverty lines)
Three additional cash transfers, each for USD 37,7 (average per family) to 2,6 million poor
Familias en Acción
and vulnerable families with children studying at school. (1,1 extreme poverty lines)
Three additional cash transfers, each for USD 20,8 to 1,7 million older adults living in poverty. (0,6
Colombia Mayor
lextreme poverty lines)
Three additional cash transfers, each for USD 94,9 (average per young person) to 260 thousand
Jóvenes en Acción
young people living in poverty that studying in higher education (2,7 extreme poverty lines)
Cash transfers every two months from USD 19,5 up to 1 million poor families. It is expected to make
Devolución del IVA
five transfers in 2020. (0,5 extreme poverty lines)
The school feeding value for home consumption is about USD 13, which is similar to the amount
Plan de Alimentación
given to educational institutions before COVID-19. Due to the similar costs, no additional value was
Escolar
included. (0,4 extreme poverty lines)
Food delivery. Average value for rural areas USD 39, for urban areas USD 30,4, delivered to
Mercados UNGRD
178.127 elderly people. (between 0,9 and 1,1 extreme poverty lines)
The cost of food delivered within the framework of early childhood protection is USD 28,5, which is
Canastas nutricionales
an additional amount of USD 7,9 respect to the total cost before COVID-19. It is considered five
ICBF
additional deliveries to 1.6 million children and adolescents. (0,8 extreme poverty lines)
The additional investment for social interventions against COVID-19 was about USD 936 millionIngreso Solidario
Key step to mitigate the economic effects of the emergency for COVID-19
What is Ingreso Solidario?
It is an Unconditional cash transfer (UCT) program to mitigate the impacts of the emergency caused by COVID-19
Who is it aimed at?
To households that are not part of other programs such as Familias en Acción, Jóvenes en Acción, Colombia Mayor
or Compensación de IVA and that live in extreme poverty, poverty or vulnerability
What is the amount of the cash transfers?
Households will get 9 cash transfers in 2020 for USD 41,6 each, and 6 transfers in 2021
Who manages the program?
1st stage (design and implementation): Ministry of the Treasury and the National Planning Department.
2nd stage (operation): Departamento para la Prosperidad SocialIngreso solidario was a quick response program
Familias en Acción inició su operación en 2001 con 300 mil familias y en casi 1 década
lo gró lle ga r a 2,6 m illo n e s d e fa m ilia s
2,6 millones de
700 mil familias 2,6 millones de
Primera inscripción familias
Familias en atendidas familias
de las familias en (cobertura máx.
Acción (máximo histórico) (cobertura máxima)
2001 post inscripciones)
Du ra c ió n : 2001 - 2006 2007 a 2011
2012 a 2020
19 a ñ o s
Inicio 2001: Familias en Acción tardó 19 años en llegar a 2,6 millones de familias Hoy:
300 2,6 millones de
Va lo r d e ú lt im a s in s c rip c io n e s (o c t u b re 20 12 a fe b re ro 20 13):
thousand familias
Families $ 35.0 0 0 m illo n e s
Definición
Etapa 1: Etapa 2:
Expedición de Depuración
pago a 1,1 pago no
Decreto No. potenciales listado
Ingreso millon de bancarizad
518 del 4 de y cruces potenciales
Solidario hogares os
abril de 2020 23 marzo- 9 – 17 abril
Du ra c ió n : 7 y 8 Abril 22 de abril
6 abril
2 sem anas y Inicio:
4 d ía s 25 March Ingreso Solidario tardó 2 semanas en definir 3 millones de hogares potenciales
beneficiarios y realizar el primer pago a 1,1 millones de hogares
1,1 d e h o ga re s q u e h a n re c ib id o e l a b o n o a c u e n t a
Va lo r d e in s c rip c io n e s : $ 0 ,0 0Results in financial inclusion from Ingreso
Solidario
Impact Empowerment
La inclusión financiera que logró el Ingreso
Solidario es una poderosa herramienta de
957.000
hogaresincluidosfinancieramentepor Ingreso
60%
hogarestienen una mujera la cabeza y por primera
políticapública. Solidarioen 2 mesesde operación vez accedenal sistemafinanciero
El país debe aprovechar las externalidades
positivas que se generaron para contribuir a
superar el entorno de informalidad y los
sobrecostos de las transacciones basadas
en efectivo.
Digital use Trust
62%
hogareshan utilizadoel auxiliopara pagos y
45%
hogareshan depositadorecursospropiosen las
comprasa través de canalesdigitales cuentasaperturadasEXTREME POVERTY MITIGATION
The additional social measures have mitigated the impact on poverty
between 2,2 and 4,3 p.p,
Estimates of effect on extreme poverty with social measures of mitigation
16
World Bank 14.6 Fedesarrollo 14.8 DNP
14
11.5 11.7
12
10.3
10 9.0
8 7.2
6
4
2
0
Current Total poverty effect Total mitigation Total poverty effect Total mitigation Total poverty effect Total mitigation
effect effect effect
Affectation of 3 months Proyectado
Recovery 12 months
Source: Wolrd bank estimates based on GEIH 2018. Fedesarrollo estimates based on ENPH 2017. DNP estimates
based on GIEH 2018COMMITMENTS FOR COLOMBIA´ S FUTURE
Reinforce
Reactivate
Restart
Stabilize To adapt the economy
Create necessary Restore for the new
Counter reduction in conditions to economic confidence normality, an
Need important step forward
consumption and safely reopen the and achieve pre-crisis
economic activity economy activity levels in terms of productivity
To stabilize the Reopen the economy Promote and accelerate Promote Colombia´s
Government's crisis´ immediate effects and restore operations the economic growth, transformation trough
objective and relieve the most while ensuring sanitary confidence and employment structural measures, which
vulnerable populations protocols and social generation to restore economic generate a radical impact towards
and economic sectors. distancing applications. activity levels growth and development.
Government’s Economic Economic Economic Enabling economic
role interventions to interventions through interventions through fiscal activities with
relieve the crisis’ fiscal expenditure and expenditure, implementation regulations,
effects through fiscal the implementation of of regulations, credit coordination and some
expenditure regulations promotion to foster growth, fiscal expenditure to
and enabling capacities for accelerate growth
the new normality. structurallyCOMPONENTS OF THE COMMITMENT FOR
THE NEW FUTURE – RECOVERY PLAN
Pilar3 Pilar5
Pilar2 Private Pilar4 FOME
Pilar1
Public / investment Public
Private Total resources of
investment Private with fiscal Investment
Investment FOME
incentives
USD 5,6 billion
Investment USD 14,6 USD 4,7 billion USD 6,7 billion USD 2,4
Appropriation
billion billion
USD 2,9 billion
4 years 8 years 3 years 10 years Commitments
USD 1,8 billion
Employment 122.435 310.244 236.000 105.593 Payment
USD 1,4
billion
Investment Jobs to be created:
$28 Billion More than 1 million direct and indirect jobs.Thank you for your time Alejandra Botero Presidential Adviser
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