This note discusses how SMEs are affected by the current COVID-19 pandemic, reports on early evidence and estimates about the impact, and provides an inventory of country responses to foster SME resilience. Given the rapid pace of developments, the overview of country responses is not comprehensive and in some cases includes intended policy responses that are still a work in progress, or simply at the stage of public announcements. This overview will be updated periodically

The latest OECD Economic Survey of the United States says that even as some businesses reopen with the lifting of coronavirus confinement measures, hard-hit sectors like hospitality and leisure will continue to need support, as will newly unemployed or displaced workers who may need to look for jobs in different sectors. The recent extension of the US Paycheck Protection Program by five weeks to August 8 is a welcome move to help small businesses struggling with the crisis. Extending exceptional unemployment benefits beyond the end-July cut-off date would offer a similar lifeline to the millions of households at risk of falling into poverty, as would assistance for job search (such as employment placement services) and support for geographic mobility.

This paper is developed by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE). It focuses on the territorial dimension of the COVID-19 crisis and the importance of the integrated response to the crisis across levels of government. The first draft of this note takes into account the developments of the crisis as of 3April2020.1It will support the work on the crisis and impact of COVID-19 of the OECD Regional Development Policy Committee. The note is a living document that will be regularly updated in the coming weeks. An updated version will be released in May

In an unprecedented global health crisis, trade is essential to save lives and livelihoods; and international co-operation is needed to keep trade flowing. In the midst of significant uncertainty, there are four things we can do: 1)boost confidence in trade and global markets by improving transparency about trade-related policy actions and intentions; 2)keep supply chains flowing, especially for essentials such as health supplies and food; 3)avoid making things worse, through unnecessary export restrictions and other trade barriers; and 4)even in the midst of the crisis, think beyond the immediate. Government support today needs to be delivered in a way that ensures it serves the public interest, not vested interests, and avoids becoming tomorrow’s market distortions. OECD is working with other IOs to support governments through timely and objective evidence and analysis to inform policy choices

The COVID-19 pandemic has triggered the most severe recession in nearly a century and is causing enormous damage to people’s health, jobs and well-being, according to the OECD’s latest Economic Outlook.

As restrictions begin to ease, the path to economic recovery remains highly uncertain and vulnerable to a second wave of infections. Strengthening healthcare systems and supporting people and businesses to help adapt to a post-COVID-19 world will be crucial, it says.

The increasing spread of the coronavirus across countries has prompted many governments to introduce unprecedented measures to contain the epidemic. These are priority measures that are imposed by a sanitary situation, which leave little room for other options as health should remain the primary concern. These measures have led to many businesses being shut down temporarily, widespread restrictions on travel and mobility, financial market turmoil, an erosion of confidence and heighted uncertainty. In a rapidly changing environment, it is extremely difficult to quantify the exact magnitude of the impact of these measures on GDP growth, but is clear that they imply sharp contractions in the level of output, household spending, corporate investment and international trade. This note provides illustrative estimates of the initial direct impact of shutdowns, based on an analysis of sectoral output and consumption patterns across countries and an assumption of common effects within each sector and spending category in all countries.

“I am saddened to see some backsliding on efforts to phase out fossil fuel support. This rise in production subsidies seems set to continue in 2020 with some countries targeting state aid to fossil fuel and related industries,” said OECD Secretary-General Angel Gurría. “Subsidising fossil fuels is an inefficient use of public money and serves to worsen greenhouse emissions and air pollution. While our foremost concern today must be to support economies and societies through the Covid-19 crisis, we should seize this opportunity to reform subsidies and use public funds in a way that best benefits people and the planet.” 

The COVID-19 pandemic has led, in addition to dramatic health implications for people around the globe, to an almost immediate and profound economic up heaval in many economies. The health and economic crises have governments scrambling for responses to limit the damage and impact on their societies and economies. This note considers the implications and challenges for international investment and offers initial responses from the OECD investment policy community as economies around the world address the crisis and prepare for the recovery.

This note has been prepared by the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) for discussion by the OECD Tourism Committee1. The Tourism Committee analyses and monitors policies and structural changes affecting the development of domestic and international tourism. It also serves as an important repository of tourism policy responses in times of crisis

FDI flows are expected to fall by more than 30% in 2020 even under the most optimistic scenario for the success of the public health and economic support policy measures taken by governments to address the COVID-19 pandemic and the resulting recession. FDI flows to developing countries are expected to drop even more because sectors that have been severely impacted by the pandemic, including the primary and manufacturing sectors, account for a larger share of their FDI than in developed economies.

As countries continue to scale up and adjust eligibility criteria of current support measures, there are concerns about how to reach those SMEs that have missed the boat and ensure the support actually goes to the businesses that need it the most. Concerning loans, the big elephant in the room remains how to manage future SME debt, not only to avoid the pre-mature closure of viable SMEs, but also since a further deterioration of SMEs’ financial situation could have systemic effects on the banking sectors as a whole. Although some countries have pledged unlimited support, it seems difficult to maintain the breadth of current support much longer without compromising the sustainability of public debt.

This report focuses on how tax policy can aid governments in dealing with the COVID-19 crisis. The report finds that governments have taken decisive action to contain and mitigate the spread of the virus and to limit the adverse impacts on their citizens and their economies. Through various measures, countries are helping businesses stay afloat, supporting households and helping preserve employment. This readiness to act helps boost confidence. However, further action, with broader and stronger measures, is needed. Policies will need to be adapted to the evolving health and economic challenges. Containment measures may only be removed gradually, so recovery may be uneven. Where recovery is weak, fiscal action can strengthen it. In this context, multilateral collaboration will be vital for recovery and to strengthen the global economy’s resilience to future shocks. The report finds that specific support will be necessary for developing countries, including through international coordination, financial support and adaptation of tax rules that benefit all countries. Public finances will eventually need to be restored. All options should be explored, including revamping old tools, introducing new ones, and bolstering ongoing efforts to address the international tax challenges posed by the digitalisation of the economy. Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience

This report takes stock of the emergency tax and fiscal policy measures introduced by countries worldwide in response to the Coronavirus (Covid-19) pandemic. It discusses how tax and fiscal policy can cushion the impact of continued containment and mitigation policies and subsequently support economic recovery. It also outlines the major policy reforms that will be needed to prepare for restoration of public finances.

In  global  emergencies  like  the  coronavirus  (COVID-19)  pandemic,  open  science  policies  can  remove obstacles to the free flow of research data and ideas, and thus accelerate the pace of research critical to combating the disease.• While global sharing and collaboration of research data has reached unprecedented levels, challenges remain. Trust in at least some of the data is relatively low, and outstanding issues include the lack of specific standards, co-ordination and interoperability, as well as data quality and interpretation. •To strengthen the contribution of open science to the COVID-19 response, policy makers need to ensure adequate data governance models, interoperable standards, sustainable data sharing agreements involving public sector, private sector and civil society, incentives for researchers, sustainable infrastructures, human and institutional capabilities and mechanisms for access to data across borders

Los ingresos tributarios en América Latina y el Caribe (ALC) alcanzaron 23.1% del PIB en promedio en 2018, según la nueva edición de Estadísticas Tributarias en América Latina y el Caribe publicada hoy. Sin embargo, el aumento de la carga tributaria se ve amenazado como resultado del deterioro de las perspectivas fiscales de la región, que se ha exacerbado por la pandemia del COVID-19 y la crisis económica mundial.

The COVID-19 crisis is severely disrupting youth’s access to education, employment and participation in public life. While it may be too early to fully anticipate the long-term impact of the crisis, increasing levels of youth unemployment and other repercussions may significantly delay their transition to an autonomous life. At the same time, the crisis may encourage unexpected innovation and new opportunities to boost intergenerational solidarity.

In keeping with measures being taken around the world to slow the spread of the coronavirus, the OECD has taken the decision to postpone OECD Week 2020 – made up of its annual Ministerial Council Meeting (MCM) and public OECD Forum – from late May to a date to be agreed in due course.

Since  the  start  of  the  COVID-19  crisis,  demand  for  broadband  communication  services  has  soared, with some operators experiencing as much as a 60% increase in Internet traffic compared to before the crisis. •Network  operators  and  content  providers  have  to  date  successfully  maintained  services  and  efficiently utilized pre-existing capacity, and in certain cases expanded this capacity. •Additional short term measures are important to further enhance network stability and resilience, and to reduce the digital divide: for example, ensuring access for network operators and content providers to communication equipment, data centres, and mobility of technicians to customers’ homes. •Policy makers and regulators can alleviate congestion in mobile networks by releasing additional spectrum on a temporary basis, or by approving temporary commercial spectrum transactions between providers that put unused spectrum into service. •In the medium term, regulators could stimulate broadband providers to deploy more deeper into  the  networks  and  gradually  phase  out  xDSL  technologies,  where  possible,  and  alleviate  administrative burdens to ease network deployment. Keeping the Internet up and running in times of crisis

LAC country governments have reacted swiftly and preventatively to protect their citizens and contain COVID-19’s spread, which is likely to face its most difficult period in the region duringthe first weeks of May. Suchapreventative reactionis very important due to a number of particular regional challenges that LAC countries face in response to this pandemic, such as less equippedhealthcare systems and fragmented social safety nets. Yet, the region is alreadyfacingan economic crisis with less fiscal space than in 2008 to mitigate the deeper recession that will result. Focusing on the 15 countries that are a part of the Steering Group of the OECD LAC Regional Programme, this note providesan overview of the measures being enacted to mitigate the public health situation, including its social, economic, and governance dimensions

This policy brief discusses the role of testing for COVID-19 as part of any plan to lift confinement restrictions and prepare for a possible new wave of viral infections. If all confinement restrictions are lifted before a vaccine or effective treatments are developed without other measures to suppress new infections, the infection rate is expected to rebound rapidly. Crucially, quick suppression of infections requires testing more people to identify who is infected; tracking them to make sure they do not spread the disease further; and tracing with whom they have been in contact. This brief discusses how testing strategies can be used to achieve three main goals: 1)suppressing the resurgence of local outbreaks; 2)identifying people who have developed some form of immunity and can safely return to work; and 3)gaining intelligence on the evolution of the epidemic, including on when a threshold for herd immunity has been reached. The brief discusses what testscan be used for each goal, as well as practical implementation issues with testing strategies, including the opportunities and risks of using digital tools in this context.