COVID Downfall and the Fear of Returning to the Offices: Pandemic Impact on Russia and the World
In this, the fifth issue of our newsletter, HSE experts comment on the government’s 'Action plan for the business and citizens income recovery and economic growth', elaborate on the May outcomes of the OPEC+ deal and analyze how psychologically challenging it will be for Russian employees to go back to their offices.
The Action Plan that the Cabinet recently presented to the President is designed to ensure the sustainable growth of citizens’ real income and boost employment and effective demand. In this article, some HSE experts comment on the measures aimed at achieving this goal.
The experts note that one of the Plan's key outcomes is to reduce the number of people with an income below the minimum subsistence level down to the level of 2019 (12.3% of the total population). According to the experts, the poverty rate during the crisis skyrocketed up to 19.9%, although measures taken by the government have addressed almost half of this increase.
'That aside, we see two issues that may hinder the achievement of the targeted poverty reduction,' they state in their comments. First of all, the potential positive impact of the measures planned to be taken on poverty is much lower than the package of measures already implemented. Moreover, based on their impact mechanism they will not be able to completely mitigate the rise in pandemic-driven poverty.
Secondly, there are sections of the population with an income below the subsistence level that did not fall under the umbrella of the Action Plan, and therefore, will add to the general poverty level. For instance, people working off the books and poor families with children aged 8-16 (18 if they continue to study) who do not get regular support. These make up 43% of all poor households with children.
The experts' opinion also provides for additional measures that will work to sustainably increase incomes and employment as well as ensuring effective demand recovery. In particular, this means improving the statutory regulations covering remote working, reducing personnel workflow, and addressing the problems of youth unemployment and education (subsidizing internship in companies, creating 50,000 new free-of-charge places in master's programs for graduates from the last three years, and adding a course in entrepreneurship to university programs). This also requires radically updating the mission, functionality, and processes of the employment services.
In addition, it is necessary to contribute more to the employment and income recovery under the social contract-based outreach programmes, and in order to reduce poverty, all poor households with children should be able to receive means-tested benefits. To do so, it is necessary to introduce a monthly allowance for low-income households with children aged 7-16 (18 if they continue to study). This measure would cover 2.7 m children and requires 162.5bn roubles per year.
The newsletter also presents the monitoring results of the current situation in Russia and the world. One of the reports is titled 'Forward-looking indicators: COVID downfall'. and states that 'Due to quarantine measures, partial or complete suspension of production and services, the global economy has slipped into recession. Whether it will last several months or several quarters, depends on the pandemic’s further development. Most of the forward-looking indicators should have bottomed out in March-April. In May, business activity continued to decline (except in China), although at a slower pace than in previous months.'
The Q2 global recession may be the worst one, and the H2 recovery is unlikely to be as fast as it was in China
The crude market, which collapsed in March-April due to the failure to agree an OPEC+ deal, price wars, and a slump in the demand for hydrocarbons, began recovering in May. This was facilitated by a new OPEC+ deal closed on April 12 reducing oil production by its participants of 9.7 million barrels per day in May and June. According to data cited by the HSE experts, the agreement has been 80% fulfilled in May, and oil production dropped by around 7.8 million barrels per day. Saudi Arabia and Russia turned out to be the most responsible parties, delivering 95% of their commitments. As the report states, Azerbaijan and UAE were also among the countries that made a notable contribution (92%) to the reduction in oil production reduction in May.
Meanwhile, there is an ongoing search for new growth models and new methods for European economic policy in the Old World. 'However, there is no commonly held opinion on which direction the EU economy and its individual countries will follow after the anti-pandemic measures and all the manifestations of the current crisis' according to the 'European Economic Climate' fact sheet notes.
The pandemic and the corresponding lockdown have affected all areas of life and every economic sector. Many companies’ personnel will have a hard time in the short term—people will have to go back to their offices, which might be just as difficult as the whole lockdown situation, or possibly even more difficult, says another HSE study. The survey identified the following main concerns associated with going back to office life: commuting by public transport (51% of respondents), lifestyle changes (47.1%), and changes in daily routine (40.4%). A total of 28.6% of respondents have a fear of failing in their professional duties, while 32% feel pressured by their executives or managers.
Despite the fact that more than 90% of the survey participants continued working from home, 38.7% of them noted that they only did something really important 2 or 3 times a month or even less frequently. Around 30% of participants complained about a lack of recognition and meaning to their work. The results obtained indicate a poorer recognition of employees' professional value and lower self-esteem as specialists.
'These data confirm our burn-out study conducted on the reduction in professional achievements in various sectors. A lack of interest to everything going on around, as well as apathy was noted by 25 and 30% of the respondents, respectively,' the report states.
More than one third of the respondents felt socially deprived during the recent period of long-term isolation, 32% felt lonely several times a week or every day, and 35% felt they were part of a social group only 2-3 times a month or less. At the same time, social deprivation plays a crucial role in the development of adverse effects such as depression, anxiety disorders, paranoia, and psychotic disorders.
HSE social and political analysts have established which value models and circumstances promote support for restrictive government policies aimed at combatting the coronavirus pandemic. The research is published in Plos One.
HSE University researchers assessed the effectiveness of the T-cell immune response to 11 variants of SARS-CoV-2. Their findings have been published in Nucleic Acids Research.
The new regulations ‘On the Organization of Studies for the 2021/2022 Academic Year’ feature in detail what will change for first-year students in the new academic year. HSE University will be organizing a vaccination drive in September for students aged 18 and over who are unvaccinated. Younger students will be eligible for vaccination once they turn 18.
Starting September 1, 2021, HSE University-Moscow is introducing new safety policies on campus to prevent the spread of COVID-19. They apply to students over 18 years old who have not had COVID during the last six months, have not been vaccinated (with a Russian or a foreign vaccine), nor have a medical exemption from vaccination. Free vaccination will be available on campus to all arriving students.
Researchers of HSE Tikhonov Moscow Institute of Electronics and Mathematics (MIEM), in cooperation with their colleagues from the University of California, Santa Cruz (UCSC), and The European Bioinformatics Institute (EMBL-EBI), have developed software to model the spread of the COVID-19 global pandemic. This is the world’s fastest Viral Genealogy Simulator (VGsim). For more details about this scalable simulator, read the reprint on medRxiv. The code is freely available at GitHub.
The year 2020 was a period of economic hardship and significant change in a wide range of sectors for most countries. A team of authors from HSE University has explored how Russia will recover from this crisis and which industries will be affected by the economic recovery. Their study was published in the journal Voprosy ekonomiki.
Researchers have yet to evaluate the entire impact of COVID on mortality. However, it is now possible to discuss the first results of some initial studies. The HSE International Laboratory for Population and Health held a webinar ‘The First Year of the COVID-19 Pandemic in Russia (April 2020—March 2021)’. Although the Russian total mortality rate increased during that period, it was Slovakia, Bulgaria, the Czech Republic, and Poland that topped the list. The lowest growth in the mortality rate was observed in South Korea. Meanwhile, researchers have failed to detect a lockdown-induced baby boom anywhere in the world.
The HSE Centre for Fundamental Sociology has recently held ‘Logica Socialis’, an open social theory seminar. Andrei Korbut, Senior Research Fellow at the HSE Centre for Fundamental Sociology, presented his report entitled ‘COVID-19 as an interactional phenomenon: People’s behaviour in public places during the pandemic’.
Researchers Mario Guarracino from the HSE Laboratory of Algorithms and Technologies for Networks Analysis in Nizhny Novgorod and Julius Žilinskas and Algirdas Lančinskas from Vilnius University, have proposed a new method of testing for COVID-19. This group method allows results to be obtained 13 times faster as compared to individual testing of each sample. The research paper was published in the journal Scientific Reports.