Implications for Business Support, Employment and Social Protection Policies and Programming for Sustainability

This study is focused on the socio-economic impact of COVID-19 on a set of geographically non-contiguous countries located in the Eastern Europe and South Caucasus region, namely Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine. Lockdowns and global spillovers are two main factors slowing down economies.  While an emphasis on macroeconomic recovery is necessary, the pandemic has exposed many structural constraints, impeding long-term economic prospects.

The impact of the COVID-19 induced crisis on MSMEs is being felt primarily through disruptions to business activities, and subsequent cutbacks on jobs, or temporary/permanent closures. SMEs and the self-employed are particularly vulnerable as the demand for services has plummeted.  The worst affected sectors, such as tourism, travel, catering, cafes, restaurants and hotels, report lay-offs or termination of contracts.

Institutional reforms to modernize economies and to build the needed infrastructure for the transformation to digital economies are needed.

Three clear transformative pathways offer more deliberate policy and programming opportunities:

1. Combining job growth with green economies
2. Build resilient infrastructure and develop innovative energy policies
3. Implementing social protection mechanisms that provide a bulwark against impending economic shocks and climate-related and demographic shifts