Message 2: COVID-19 Is Just One of the Severe Socioeconomic Challenges Facing the Region

The most vulnerable (those in poor or almost-poor households) have been employed in sectors that have felt the highest impact of the pandemic: extractive industries, tourism (including hotels, cafes, and restaurants), retail trade, transport, commerce, and construction. These are the sectors where, typically, informal daily-wage earners or those on contractual (temporary) jobs are employed and where the options of telecommuting or remote working are not available. Women and refugees have been more severely affected by job losses than men and nationals. In Djibouti, 7 percent of refugees living in urban areas reported losing their job relative to the previous week, versus 3 percent for nationals. This outcome exacerbates existing vulnerabilities, as it adds to the 25 percent of refugees who were not working (compared with 11 percent for nationals).

Message 2: COVID-19 Is Just One of the Severe Socioeconomic Challenges Facing the Region

The report’s second finding highlights that—making matters worse— COVID-19 is occurring at a time when many countries are grappling with other severe problems, such as inflation, macroeconomic crises, food insecurity, fragility, and conflict (with large numbers of refugees to host), as in the following examples:

• In Lebanon, economic loss has been estimated at a quarter of its 2019

GDP due to COVID-19, but mostly because of the generalized economic collapse. Price levels shot up to about 145 percent by end-2020, and even higher—around 402 percent—for food price inflation (figure O.6), largely because of Lebanon’s import dependence and currency devaluation, on top of the pandemic’s effects.

• In the Islamic Republic of Iran, GDP per capita growth was −7.0 percent in 2018–19 and −7.7 percent in 2019–20, although some recovery is expected for 2020–21. Inflation, which had started to drop from its 2018 spike, rose again in 2019/20, hitting 41.2 percent, and is continuing to climb.3 Because many key staples are imported, food prices are especially exposed. Inflation, combined with income loss during the pandemic, is driving up poverty (figure O.7).

The pandemic has increased households’ level of stress about access to food, especially for the poorest, raising questions about potentially serious malnutrition problems ahead. In the West Bank and Gaza, 65 percent of households reported worries about not having enough food to eat, as did 40 percent in Djibouti, and 33 percent in Tunisia. This worry is not surprising, given that they are grappling with challenges related to labor