Monster Monsoon: “Pakistan and Its People Are Paying the Costs of What They Are Not Responsible For.”

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Opinion

Credit: Pakistan Development Alliance

ISLAMABAD, Pakistan, Sep 1 2022 (IPS) – Pakistan has been going through the worst time of its recent history due to unprecedented colossal monsoon rains and devastating floods. The current floods would have been expected less than once a century, but climate experts claim that what we are seeing today is just a trailer of what’s in store for us if we don’t pay heed to climate change. More than 112 districts are currently afffected and around 30 million people; their property and land are totally devastated. Across the country, where hundreds of thousands of cattle died due to the Lumpy Skin Disease, now more than 727,000 have perished due to floods and rains. The number is increasing rapidly.


We were in the countryside conducting a study on the rights of women farm workers, when the Monster monsoon hit the country. We had to cut our field mission short and we are now relatively “safe” here in Islamabad, busy organising emergency relief and rescue operations.

Pakistan and its people are paying the costs of what they are not responsible for. For the past 20 years, Pakistan has consistently ranked among the top 10 most vulnerable countries on the Climate Risk Index. We are facing such climate change aggression and devastation while contributing only 0.8% of greenhouse carbon emissions to global warming. We are squeezed, geographically situtated between titans China and India, who are the top two emitters of greenhouse gases. This impacts the glaciers of the Himalaya. In Pakistan, our 7253 glaciers – more glaciers than almost anywhere on Earth – are melting faster than ice-cream in the sun due to climate change. Since the whole country is situated in the downstream of the Hamalaya, heavy floods have become the norm. To this scenario, you need to add flawed developement interventions, absence of rule of law and the lack of policy priorities towards the management of “everyday” disasters. This results in risks being left undone instead of being treated as full-fledged national security emergencies.

Today, the horrific scale of the floods are not in doubt, but the catastrophe is still unfolding. Rehabilitation and reconstruction activities need to be initiated immediately. Pakistan is already facing food insecurity due to this manmade disaster. In the long run, this crisis will increase poverty, inequality and economic instability in the country if we – supported by the world at large – fail to respond quickly.

Being part of a civil society network I see with my own eyes how civil society is vehementally engaged in rescue, relief and emergency activities through local resources and philanthropic initiatives. The international community and INGOs have not yet initiated their field operations. Although the government has officially appealed for the support of the international community and has levereged restrictions, the intensive regulatory frameworks are still working against rights based NGOs.

I have a message for the international community. Please support flood affected communities as early as possible. Local civil society needs to be strengthened and financed as well, as they are on the frontlines, they are the first reaching affected communities. In the future, there needs to be serious investments on addressing the impacts of climate change, particularly in vulnerable countries such as Pakistan, where climate change adaptation mechanism and infrastructure support should be mainstreamed. Now they are at the periphery, and it shows.

IPS UN Bureau

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Do we Really Need a World Ranking to Measure Happiness?

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Opinion

Credit: UN Women

KATHMANDU, Nepal, Mar 29 2022 (IPS) – The 10th edition of the World Happiness Report was recently published and once again the findings raised an array of mixed emotions with many questioning the real foundations underpinning the most discussed aspect of the Report, the World Happiness Ranking,


For example, according to the ranking, Nepal appears to be the happiest place in the South Asia but is it really the case? Many experts from the country doubt about it as it was reported by The Kathmandu Post on the 22nd of March.

In the article, Dambar Chemjong, head of the Central Department of Anthropology at Tribhuvan University simply asks “What actually constitutes happiness?”

This is a complex question to answer but certainly it is fair to wonder how come each time this report gets published, it is inevitable that the richest nations, especially the Nordic ones come up on the top while the poorest and more fragile ones instead are hopelessly at the bottom.

There is no doubt that material prosperity determines a person’s quality of life and the World Happiness Report looks at GDP and life expectancy. In addition, the report also explores other factors like generosity, social support, freedom, and corruption.

These six variables, put together, are central to depict what the report calls “life evaluations” that “provide the most informative measure for international comparisons because they capture quality of life in a more complete and stable way than emotional reports based on daily experiences”.

The ranking is based on the Gallup World Poll, that asks “respondents to evaluate their current life as a whole using the mental image of a ladder, with the best possible life for them as a 10 and worst possible as a 0”.

One of the key findings is that social connections in dire times, especially if we think about what the entire world had to endure following the pandemic, do make the difference.

“Now, at a time of pandemic and war, we need such an effort more than ever. And the lesson of the World Happiness Report over the years is that social support, generosity to one another, and honesty in government are crucial for well-being” says Jeffrey Sachs, one of the major “architects” behind the entire concept of measuring happiness worldwide.

This statement further validates the need to further think more broadly about the importance these social relationships and social bonds have in developing nations.

That’s why analyzing happiness across nations should be considered as a working progress and the goal should be to better picture the complex situations on the ground in many parts of the developing world.

These are all nations that have been experiencing hardships consistently, even before the Covid pandemic outbreak and, therefore, they should be acknowledged for having developed unique forms of social bonds and solidarity.

Instead, these social factors, these connectors and the levels of reliance stemming from them in these “unhappy” nations”, are overshadowed by some of the variables determining the life evaluations.

People in developing nations have less access to public services and they are more exposed to corruption and bad governance. Lack of health infrastructures or unequal job market do have a strong incidence in determining a person’s human development and quality of life.

Yet does the fact that their lives are tougher automatically means people are there are unhappy?

Moreover, should not we consider the stress and mental health often affecting the “prosperous” lives of the citizens living in the north of the world?

Probably the problem is the idea of having a ranking itself. Though desirable and useful, measuring real happiness is a daunting and complex job.

Trust, benevolence, real generosity (not just the extrapolated, like in the report, based on donations during the last month) are all key determinants of happiness.

Yet these same factors have always been strong in developing societies where people rely on mutuality and self-help rather than depending on governments unable to fulfill their duties.

As it is now, the World Happiness Ranking risks to become just a “plus” version of the Human Development Index.

There is still a long way to better decipher and understand the meaning of happiness in the so called South of the World.

There is also a great need for the authors to better explain in simpler terms their methodology of calculating the ranking especially the relationships between the six key variables analyzed and positive and negative emotions that are also taken into consideration.

The fact that the ranking and the science behind the report is still a working process, it is recognized in the report itself.

An option would be to re-consider the variables of “life evaluations” that, by default, underscore the concept of wellbeing from a western perspective.

On the positive side, it is encouraging to see how the report includes also a part on “cross-Cultural Perspectives on Balance/Harmony”, central if we want to have a less westernized approach to happiness.

The 2022 edition of the Report devotes also considerable space to the biological basis of happiness, the relationships between genes and environment, what the report calls “Gene-Environment Interplay”.

Such nexus, affecting a person’s feelings and emotions and all the intricacies coming from these interactions, should make us reflect if it is really worthy to continue pursuing the goal of having an annual global ranking on happiness.

The idea of a ranking on happiness risks defeating the purpose of the gigantic and noble effort of better understanding how we can be happier and how public policies can have a role or not in these unfolding dynamics.

Simone Galimberti is Co-Founder of ENGAGE, an NGO partnering with youths living with disabilities. Opinions expressed are personal.

IPS UN Bureau

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School Meals Coalition Hopes to Provide a Meal to Every Child

Aid, Civil Society, Development & Aid, Education, Featured, Food Security and Nutrition, Global, Headlines, Health, Humanitarian Emergencies, Inequity, Poverty & SDGs, TerraViva United Nations

Food Security and Nutrition

School meals have a host of benefits, including improving enrollments and preventing malnutrition. Now the School Meals Coalition plans to recruit local food producers to assist in the programme. Credit: Bill Wegener/Unsplash

United Nations, Nov 26 2021 (IPS) – Meals at schools not only give each child a nutritious meal but increase enrolments, among other benefits.


This emerged at a recent launch of the School Meals Coalition, a new initiative that aims to give every child a nutritious meal by 2030 through bolstering health and nutrition programmes. The coalition comprises over 60 countries and 55 partners dedicated to restoring, improving and up-scaling meal programs and food systems. Among their partners are UN agencies UNICEF, World Food Programme (WFP), UN Nutrition, Food and Agriculture Organization (FAO), and UNESCO.

In the briefing, the speakers identified School Meals Coalition’s primary goals to restore school meal programmes to the status before the COVID-19 pandemic and reach children in vulnerable areas who have not accessed these plans before. The member countries’ political leaders have come together to support this “important initiative”, according to the permanent representative of Finland to the United Nations, Jukka Salovaara.

“School meals are so much more than just a plate of food. It’s really an opportunity to transform communities, improve education, and food systems globally,” he said.

School meal programmes are a significant safety net for children and their communities. As one of the primary means for children to get healthy meals, they help combat poverty and malnutrition. Their impact on education is seen in increased engagement from students. They also serve as incentives for families to send their children, especially girls, to schools, thus supporting children’s rights to education, nutrition and well-being.

“We see documented jumps of 9 to 12 per cent in enrollment increases just because the meals are present,” WFP Director of School-Based Programmes Carmen Burbano said. “So, these are really important instruments to bring [children] to school.”

The programmes would also provide opportunities for sustainable development practices and transformations in food systems. One key strategy is to promote and maintain home-grown school meal programmes, recruiting local farmers and markets to provide food supplies. Investing in school meal programmes, especially through domestic spending, has proven to increase coverage. In low-income countries, the number of children receiving school meals increased by 36 percent when their governments increased the budgets for these programs.

A WFP study found that at the beginning of 2020, over 380 million children globally received meals through school meal programmes. The closure of schools due to the COVID-19 pandemic effectively disrupted those programmes, depriving 370 million children of what was effectively their main meal for the day. While there have been marked improvements since schools re-opened worldwide, with 238 million children accessing the school meals, there are still 150 million children that don’t have access.

The School Meals Coalition aims to close this gap through a system of collaboration between member countries and their partners. Among their initiatives will be a monitoring and accountability mechanism that is being developed by the WFP and its partners, which will be used to follow the coalition’s accomplishments, and a peer-to-peer information-sharing network, spearheaded by the German government, between members and partners that will use findings to influence their programme output.

Even before the pandemic, school meal programmes did not reach the most vulnerable children, 73 million, who could not access these programmes. Reaching children that have fallen through the cracks can be challenging, but it is significantly more difficult in countries affected by conflict or environmental disruptions.

Education Cannot Wait (ECW) and the World Food Programme (WFP) earlier signed a memorandum of understanding to feed children in protracted crises.

At the signing, WFP Assistant Executive Director, Valerie Guarnieri said: “Simply put, sick children cannot attend school and hungry children cannot learn. It is essential we invest more in the health and nutrition of young learners, particularly girls.”

ECW Director, Yasmine Sherif said a feeding scheme made a massive difference in children’s lives.

“For many children and youth in crisis-affected countries, a meal at school may be the only food they eat all day and can be an important incentive for families to send and keep girls and boys in school. It is also essential for a young person to actually focus and learn,” she said.

The coalition plans to find ways to break the barriers to enable children to reach school or look for alternative learning pathways to reach children who could not physically attend school.

The factors that can prevent children from fully attending schools, such as poverty, complexity in family lives, or conflict, have only been exacerbated over the last nearly two years, thanks mainly to the COVID-19 pandemic. As more schools open worldwide, the restoration of school meal programmes is expected to provide much-needed support for children and their communities in turn.

“This is a very urgent and timely priority,” said Head of the Sustainable Development Unit of the Permanent Mission of France to the United Nations, Olivier Richard. “Because school meals are very important for the recovery of our societies from the impact of the COVID-19 pandemic.”

To learn more about the School Meal Coalitions, you can follow their page.

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Guess Who’s Behind Paralysis on COVID19 in the UN Committee on World Food Security

Aid, Civil Society, COVID-19, Economy & Trade, Food and Agriculture, Food Security and Nutrition, Global, Headlines, Human Rights, Humanitarian Emergencies, IPS UN: Inside the Glasshouse, TerraViva United Nations

Opinion

ROME, Oct 19 2021 (IPS) – ‘COVID 19 has multiplied hunger and malnutrition challenges. We need transformative action!’ The first speaker at the UN Committee on World Food Security’s (CFS) 49th Plenary Session, the Secretary-General of the United Nations, turned the spotlight on the disastrous impacts of the pandemic that have afflicted communities around the world for close to two years.


Nora McKeon

He was echoed by the presenter of the 2021 edition of the State of Food Security and Nutrition in the World for whom ‘COVID is only the tip of the iceberg’, while keynote speaker, Jeffry Sachs, emphasized the multifaceted nature of the crisis, with chronic poverty and conflict at the center.

Delegation after delegation took the virtual floor to share their concerns: Kenya speaking for the Africa Group, Colombia, Cuba, Costa Rica, Norway, Morocco, Peru, Spain, Indonesia, Mexico, Malaysia, Mali, Cape Verde, South Africa, Uganda, Saint Lucia and more. The impacts of Covid 19 on food security and nutrition are heavy and lasting. The vulnerable are the most effected, within and between countries. Covid has deepened and exacerbated existing structural fragilities and injustices in our food systems. Its causes are multisectoral and cannot be treated in a siloed way.

‘Multilateralism, solidarity and cooperation are key to the way forward’, the President of ECOSOC added, and ‘the CFS is a unique multilateral forum because it brings all the actors together in the name of the right to food’. The text adopted at the end of Day 1 summarized all of these contributions, and deepened concern by drawing attention to the possibility of recurrent pandemics.

With this kind of an opening one could have expected a standing ovation when it was proposed, the following day, that the CFS put together a globally coordinated policy response to the impacts of COVID 19 on food security and nutrition and a proposed precautionary approach towards possible future shocks of this kind.

This proposal was a long time in the building. For a year and a half the CFS’s Civil Society and Indigenous Peoples’ Mechanism (CSM) had been documenting the experience and proposals of its constituencies and communities and bringing this evidence from the ground into the global debate. Earlier this year an informal ‘Group of Committed’ governments and other CFS participants had come together to push for the CFS to take determined action. How could it fail to live up to its mandate in the face of the most serious threat to global food security the world has faced since the 2007-2008 food crisis?

Just a week before CFS49 the Group of Committed had held a seminar where evidence and proposals for global policy action were presented by national governments, regional and local authorities, small-scale food producers, the urban food insecure, along with UN agencies, the Special Rapporteur on the Right to Food, and the CFS’s own High-Level Panel of Experts.

The seminar demonstrated that action is being taken by different actors and authorities at local, national and regional levels, while UN agencies have developed and adopted relevant policy instruments and programmes in their respective sectors. What has been missing thus far is a way of putting the different perspectives and initiatives together into a multisectoral, multilaterally coordinated approach. Filling this gap was the proposal that was put on the table in CFS49.

‘We need a globally coherent and coordinated response to support governments’ efforts and the CFS is the appropriate place for this to happen,’ the Ambassador of Mali had exhorted in his opening address.

So what about the standing ovation? The proposal was supported by countries from the Global South led by African countries, the most affected by injustice in access to vaccines, dependency on food imports, and indebtedness, but including also Mexico, Peru, Morocco, the CSM and the Special Rapporteur on the Right to Food. ‘This is the place to deal with COVID!’ he said. ‘It is the priority food issue today. It wasn’t addressed by the UN Food Systems Summit. The CFS has the mandate and the tools, and the other UN agencies are highly committed to cooperate.’

But, incredibly and unacceptably, the proposal did not pass. It was blocked on specious, procedural grounds by a steamroller coalition of big commodity exporters who push back on any possible limitation that might be placed on global trade in the name of human rights, equity, environmental concerns: the US, Canada, Argentina, Brazil, Russia. The EU, shamefully, was silent.

The implications for inclusive multilateralism, democracy, the needed radical transformation of our food systems are severe. ‘A key barrier to transformation is interference from corporations,’ stated the delegate of Mexico. ‘Governments need to assume their role as agents of change, regulators of food systems, and protectors of the planet, but we can’t do it alone. Global attention is needed and the CFS is the right place for it.’

But The CFS is being held hostage. The arrogance with which a few are ignoring reality, evidence and urgency is leading to an unacceptable increase in the violation of the human rights of the many. Patience is wearing thin. ‘If I’m in this room it’s to honor the concerns of those most affected in my region,’ a member of the Group of Committed asserted in the aftermath of the session.

And the people of her region, along with others from around the world, are raising their voices ever more loudly, as in the counter mobilization to transform corporate food systems organized last July in parallel to the Pre-Summit of the UNFSS [hyperlink]. Radical food system transformation is being built from the ground up and the CFS, however handicapped, is the most resounding global echo chamber for people’s claims.

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Global Austerity Alert: Looming Budget Cuts in 2021-25 and Alternatives

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Opinion

Map of countries with projected austerity cuts in 2021-2022, in terms of GDP, based on IMF fiscal projections. Credit: I. Ortiz and M. Cummins, 2021

NEW YORK and NAIROBI, Apr 15 2021 (IPS) – Last week Ministers of Finance met virtually at the Spring Meetings of the International Monetary Fund (IMF) and the World Bank to discuss policies to tackle the pandemic and socio-economic recovery.


But a global study just published by the Initiative for Policy Dialogue at Columbia University, international trade unions and civil society organizations, sounds an alert of an emerging austerity shock: Most governments are imposing budget cuts, precisely at a time when their citizens and economies are in greater need of public support.

Analysis of IMF fiscal projections shows that budget cuts are expected in 154 countries this year, and as many as 159 countries in 2022. This means that 6.6 billion people or 85% of the global population will be living under austerity conditions by next year, a trend likely to continue at least until 2025.

The high levels of expenditures needed to cope with the pandemic have left governments with growing fiscal deficit and debt. However, rather than exploring financing options to provide direly-needed support for socio-economic recovery, governments—advised by the IMF, the G20 and others—are opting for austerity.

The post-pandemic fiscal shock appears to be far more intense than the one that followed the global financial and economic crisis a decade ago. The average expenditure contraction in 2021 is estimated at 3.3% of GDP, which is nearly double the size of the previous crisis. More than 40 governments are forecasted to spend less than the (already low) pre-pandemic levels, with budgets 12% smaller on average in 2021-22 than those in 2018-19 before COVID-19, including countries with high developmental needs like Ecuador, Equatorial Guinea, Kiribati, Liberia, Libya, Republic of Congo, South Sudan, Yemen, Zambia and Zimbabwe.

The dangers of early and overly aggressive austerity are clear from the past decade of adjustment. From 2010 to 2019, billions of people were affected by reduced pensions and social security benefits; by lower subsidies, including for food, agricultural inputs and fuel; by wage bill cuts and caps, which hampered the delivery of public services like education, health, social work, water and public transport; by the rationalization and narrow-targeting of social protection programs so that only the poorest populations received smaller and smaller benefits, while most people were excluded; and by less employment security for workers, as labor regulations were dismantled. Many governments also introduced regressive taxes, like consumption taxes, which further lowered disposable household income. In many countries, public services were downsized or privatized, including health. Austerity proved to be a deadly policy. The weak state of public health systems—overburdened, underfunded and understaffed from a decade of austerity—aggravated health inequalities and made populations more vulnerable to COVID-19.

Today, it is imperative to watch out for austerity measures with negative social outcomes. After COVID-19’s devastating impacts, austerity will only cause more unnecessary suffering and hardship.

Austerity is bad policy. There are, in fact, alternatives even in the poorest countries. Instead of slashing spending, governments can and must explore financing options to increase public budgets.

First, governments can increase tax revenues on wealth, property, and corporate income, including on the financial sector that remains generally untaxed. For example, Bolivia, Mongolia and Zambia are financing universal pensions, child benefits and other schemes from mining and gas taxes; Brazil introduced a tax on financial transactions to expand social protection coverage.

Second, more than sixty governments have successfully restructured/reduced their debt obligations to free up resources for development. Third, addressing illicit financial flows such as tax evasion and money laundering is a huge opportunity to generate revenue. Fourth, governments can simply decide to reprioritize their spending, away from low social impact investments areas like defense and bank/corporate bailouts; for example, Costa Rica and Thailand redirected military expenditures to public health.

Fifth, another financing option is to use accumulated fiscal and foreign reserves in Central Banks. Sixth, attract greater transfers/development assistance or concessional loans. A seventh option is to adopt more accommodative macroeconomic frameworks. And eighth, governments can formalize workers in the informal economy with good contracts and wages, which increases the contribution pool and expands social protection coverage.

Expenditure and financing decisions that affect the lives of millions of people cannot be taken behind closed doors at the Ministry of Finance. All options should be carefully examined in an inclusive national social dialogue with representatives from trade unions, employers, civil society organizations and other relevant stakeholders.

#EndAusterity is a global campaign to stop austerity measures that have negative social impacts. Since 2020, more than 500 organizations and academics from 87 countries have called on the IMF and Ministries of Finance to immediately stop austerity, and instead prioritize policies that advance gender justice, reduce inequality, and put people and planet first.

Isabel Ortiz is Director of the Global Social Justice Program at Joseph Stiglitz’s Initiative for Policy Dialogue at Columbia University, former Director at the International Labour Organization (ILO) and UNICEF
Matthew Cummins is senior economist who has worked at UNDP, UNICEF and the World Bank.

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Debt Moratoria in the Next Pandemic: Be Prepared, and Be Fair

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Opinion

Credit: Temilade Adelaja via Communication for Development Ltd/CGAP, Washington DC

WASHINGTON DC, Mar 25 2021 (IPS) – Imagine it is 2025 and that, unfortunately, another pandemic is sweeping the world. Much like in the 2020 crisis, borrowers have seen their livelihoods upended and are struggling to repay loans.


One of the questions before policy makers amid this new crisis is whether to extend moratoria to distressed borrowers. In search of answers, they reflect on the world’s experience with the COVID-19 pandemic and whether moratoria were part of the solution. These policy makers conclude that they did some things right in 2020.

Just days into COVID-19 lockdowns, bank regulators in more than 115 countries granted special permission for financial services providers (FSPs) to extend moratoria to millions of borrowers, especially those with small business and consumer loans. These moratoria were the next best thing to cash in the wallet for borrowers who had lost their jobs or seen their business revenue plummet.

For lower-income countries, whose governments could ill afford welfare payments, moratoria became an important form of economic relief. And by relaxing provisioning on paused loans, these special moratoria also shored up FSPs’ balance sheets and prevented panic in financial systems.

Through the moratoria, the world’s economies put the shock-absorbing capacity of financial systems to good use.

But these policy makers also see that moratoria could have worked better in some respects. So, in 2025, as the world once again turns to moratoria, they are determined to learn the lessons of the past and make moratoria work even better. What do they do differently?

Fair burden sharing

As public health authorities shutter the economy to stop the new pandemic, advocates for lower-income people are already calling on policy makers to spread the economic burden among those better able to bear it.

Policy makers know that moratoria on small loans (as well as evictions and mortgages) will shift some economic pain from lower-income families and small businesses onto banks and landlords — at least, temporarily.

But they recall that, in 2020, FSPs shifted the pain back to small borrowers by allowing interest to accrue and compound during moratoria. Ultimately, borrowers paid to pause their loans – often dearly.

Back in 2020, policy makers debated whether to shift some of the long-term burden of accrued and compounding interest away from borrowers, but it was difficult for them to find a workable solution.

In India, after much debate in the Supreme Court over who should pay this additional interest, the government found a remedy when it agreed to pay banks the compounding portion of borrowers’ interest incurred during moratoria. Implicitly, this decision made moratoria part of the government’s overall pandemic response while affirming the right of the banks to charge fully for delayed payments.

Fortunately, in 2025, several governments have included special provisions in their catastrophe protocols that pledge government funding for a portion of the interest that small loans accrue during moratoria.

This pledge helps to ensure policies intended to help low-income people don’t end up harming them. It has the added benefit of providing banks with a small amount of liquidity during the moratoria period.

Moratoria will also be fairer this time around because policy makers have universally agreed that borrowers should have the right to choose whether to accept or reject a moratorium offer. This was not always the case in 2020.

In some countries, regulators — anxious to prevent panic — and FSPs — wishing to avoid tedious case-by-case administration — promulgated blanket moratoria, even before obtaining agreement from borrowers.

However, some borrowers preferred to keep paying to avoid extra interest charges. In response to push back from borrowers on unilateral moratoria, authorities in Peru affirmed consumers’ right to unwind unwanted moratoria. Today, following this example, regulators the world over require FSPs to notify borrowers of moratoria offers and present them with the option to refuse.

Policy makers have also anticipated the challenge of maintaining borrowers’ standing with credit bureaus. When borrowers accept moratoria during a national emergency, it should not hurt their creditworthiness.

In 2020, there was confusion over how banks should report restructured loans to credit bureaus, how credit bureaus were to incorporate these loans into credit scores, and how new lenders were to use the information.

In India, FSPs simply didn’t report many loans for several months. Eventually, those problems were sorted out. Now, in 2025, credit bureaus follow well-understood protocols for handling loans in moratoria during emergencies.

Preparedness

The emergency protocols that the world’s banking authorities and FSPs put in place after the COVID-19 pandemic also address operational continuity and communications.

Back in 2020, economic lockdowns prevented in-person interactions between lenders and borrowers and often led to breakdowns in communication. In Uganda, loan officers could not meet with customers in the field, and transport restrictions prevented adequate staffing of branches and even call centers. FSPs transacting mainly in cash were caught especially flat-footed.

Thankfully, this problem is behind us now. The pandemic accelerated FSPs’ digitization plans across the world, and record numbers of borrowers started using mobile technology. FSPs serving lower-income customers now routinely communicate and transact digitally.

They have also upgraded their internal systems to handle the irregular schedules of loans in moratoria. And the expansion of digital infrastructure during and after COVID-19 now allows staff to work from home.

Consumer protection

As financial regulators and supervisors prepare for the new moratoria in 2025, they are better equipped to mitigate some of the consumer risks that appeared in 2020. They now use market monitoring tools, such as suptech, consumer phone surveys and mystery shopping, to assess consumer risks in real time. They can quickly spot issues such as abusive collections practices.

Nevertheless, both financial authorities and FSPs have learned from the previous crisis that ensuring good communication and transparency will be challenging. Moratoria are unfamiliar concepts, and the math is complicated.

Learning from 2020, when poor communication led to misunderstandings, mistakes and abuse, regulators have already issued consumer protection rules to ensure the public fully understands moratoria offers and their consequences.

Additionally, communications now flow not just to customers, but also from them. Policy makers are widely using tools that give consumers a collective voice and reveal what they are experiencing.

Several regulators have put consultative bodies in place to have a regular dialogue with consumers, and consumer associations regularly convey issues to them. Such tools proved useful in 2020.

In Peru, for example, the consumer protection agency INDECOPI listened systematically to customers and alerted regulators and FSPs to emerging abuses so that they could respond quickly.

Agility

The COVID-19 pandemic lasted much longer than anyone foresaw, and unanticipated implementation challenges arose. If policy makers learned one thing, was is that you can never anticipate all the ways an emergency will unfold.

Accordingly, the countries that were best prepared for the next pandemic were those that had established channels for authorities and FSPs to work together to respond to evolving conditions.

Source: Consultative Group to Assist the Poor (CGAP) is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion.

*Elisabeth is the former managing director of the Center for Financial Inclusion at Accion. She is a visiting fellow at the Financial Access Initiative and a consultant at CGAP.

*Eric Duflos, Senior Financial Sector Specialist, leads CGAP’s work on consumer protection, from policy, industry and customer perspectives, ensuring that financial services have positive outcomes for customers.

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