COVID-19: The great disrupter

Aqilah Rahman

The COVID-19 pandemic has severely disrupted the global economy, resulting in millions of job losses and sharp increase in poverty.

In 2020, total employment fell by 114 million compared to the previous year, said the International Labour Organization (ILO) in its recently published World Employment and Social Outlook: Trends 2021 report.

In terms of employment rates, sectors that were heavily impacted by the pandemic include accommodation and food services; construction; wholesale and retail trade; real estate, business and administrative activities; and manufacturing.

The accommodation and food services sector took the biggest hit worldwide. According to the ILO modelled estimates, employment rate in this sector decreased by 12.9 per cent relative to the no-pandemic scenario for 2020.

For the other sectors, ILO estimated the following drops in employment rates: construction (8.8 per cent); manufacturing (7.3 per cent); real estate, business and administrative activities (5.9 per cent); and wholesale and retail trade (5.1 per cent).

Agriculture and financial activities are estimated to have fared better, with a 0.3-per-cent decline each.

Meanwhile, labour demand is high among grocery stores and food retail companies.

This is attributed to a high demand for food and other essentials, particularly among those who stay at home.

The arts and culture industry has suffered significant financial losses due to cancelled productions and difficulty in maintaining physical distancing among artists, personnel and audiences.

Many countries prohibit live shows, and even if they do allow it, attendance has been low due to the risks associated with confined and poorly-ventilated spaces.

The roll out of vaccines is expected to boost audience numbers, but it is unclear how the precautionary measures will change and how the sector will evolve.

Migrant workers from the Asia- Pacific region have also been highly affected by the pandemic. Many of them work in the Gulf Cooperation Council (GCC) countries, with presence in Australia, Brunei Darussalam, Japan, Malaysia, New Zealand, South Korea, Singapore and Thailand. It is estimated that remittances to East Asia and the Pacific declined by 7.9 per cent in 2020.

Many businesses, particularly micro and small enterprises, have already gone bankrupt or are facing a highly uncertain future.

According to an ILO survey in 2020, 80 per cent of micro enterprises and 70 per cent of small firms were facing significant financial difficulties.


In addition to job terminations, many businesses have reduced their working hours to stay afloat, resulting in a lower labour income. This led to an increase in poverty rates. Compared to 2019, an additional 108 million workers are now estimated to be extremely or moderately poor, living on less than USD3.20 for each family member per day.

Working poverty rates today are the same as those recorded in 2015 – the very same year United Nations (UN) made eradicating poverty one of its sustainable development goals. Due to the pandemic, five years of progress towards the eradication of working poverty has been lost.


As we enter the second half of 2021, the economy is expected to recover, driven by vaccination and large-scale fiscal spending. However, the global market recovery is expected to be uneven due to varying access to vaccines and budget constraints across the countries.

High-income countries such as Brunei Darussalam will have greater access to vaccines which will allow businesses to re-open and stimulate economic recovery, further enhanced by fiscal and monetary policies to increase investment and spending. Low- and mid-income countries, on the other hand, will have limited access to vaccines and greater constraints on fiscal spending due to debts and public deficits.

A total of 100 million jobs are expected to be created in 2021, followed by an additional 80 million in 2022. However, this will not be sufficient to make up for the jobs that have been lost to the pandemic. ILO estimates a global shortfall in jobs standing at 75 million in 2021 and 23 million in 2022.

Unemployment is projected to be high in countries at all income levels in 2022. ILO estimates 205 million to be unemployed in 2022, a significant increase compared to 187 million recorded in 2019 before the pandemic hit.