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Strategies for regional recovery
1. OECD SEMINAR
STRATEGIES FOR REGIONAL
RECOVERY
Centre for Entrepreneurship, SMEs,
Regions and Cities
September 8th, 2020
2. 1. Image of the event
2. Speakers presentation directory
3. Webinar overview
Table of contents
3. 1. Image of the event
*Screenshots taken during the seminar
4. 2. Speakers presentation directory
Regional development
and COVID-19 crisis
Enrique Garcilazo OECD, RDT Slide 6
Assessing Impacts of
covid-19 crisis in French
Regions for successful
recovery plans
Mickael Vaillant Régions de France -
France
Slide 17
Territorial impact of covid-
19 crisis in OECD countries
A focus on the impact on
subnational finance
Dorothée Allain-
Dupre
OECD, CFE Slide 21
Strategies for regional
recovery – 8th September
2020
Carlo Cipiani Umbria Regions – Italy Slide 31
Measures and actions
against COVID-19
Sergio Fernando
Vargas Téllez
State of Hidalgo –
Mexico
Slide 39
5. AGENDA
14h00-14h05
14h05-14h40
14h40-15h00
15h05-15h15
15h15-15h50
15h50-16h10
3. Webinar overview
Regional and subnational governments are at the frontline of
the COVID-19 crisis and their recovery plans will be key to
reigniting local economies. The effects of the crisis will differ
across OECD regions, depending on their exposure to tradable
sectors, global value chains and type of specialisation (e.g.
tourism) amongst other elements. Regions will play a key role
in mitigating the effects of the crisis in several key areas
including managing mobility of people, goods and services,
economic development, health care, social services and public
investments. Given the expected increase in budget constraints
over the coming months, regions will need to develop effective
forward-looking strategies that are adapted to the current
context and equipped to accelerate the recovery process.
Why attend?
The discussion will gather regional representatives from OECD
countries to share their strategies and approaches to
mitigate the effects of the COVID-19 crisis. It will serve as a
platform to exchange methods for the planning process,
different views on future recovery and alternatives to unlock
short- and long-term opportunities. Strategies to attract new
investments and manage financial resources will be key to
implementing the recovery plan
7. 1. OECD Digital Hub on Tacking the Coronavirus (136 policy responses)
• http://www.oecd.org/coronavirus/en/
2. At sub-national level impact from COVID-19 and policy responses
3. Currently working on medium and long term effects “new normality”
Active support to member countries during COVID
9. COVID-19 economic and social effects on regions?
Large share of population at higher risk
• Severe illness, notably the elderly and the poor
A high share of workers in essential jobs (agriculture, food
processing, etc.)
• Limited capability to work from home making it difficulty to telework and
social distance
Less access to medical services
• Lack of ICUs, doctors with specialised skills, larger distance to hospitals,
etc.
Lower accessibility to Internet
• Both in coverage and connection speed, devices and skills to use them
A much less diversified economy
• Vulnerability to economic shocks
Cities:
Potential to amplify the pandemic through increased
human contact.
• Often hubs for transnational business and movement
High share of service activities
• Many activities hardly impacted (restaurants, retail) but many others with
possibility of teleworking
Pollution levels can increase impact from COVID-19
• Pollution is higher in cities and is known for causing lung and heart
damage
High quality of internet (better use of E-services)
Unequal impacts between cities with marked inequalities
and high share of urban poor
Rural:
Source: OECD (2020), Policy implications of COVID-19 crisis for Rural development; OECD (2020) ; Cities Policy responses; OECD
(2020)Coronavirus (COVID-19)From pandemic to recovery: Local employment and economic development
10. Confinement measures and travel restrictions are likely to affect
places differently depending on their areas of economic activity
• The share of jobs potentially at risk in the short term as a result of confinement measures ranges from less than 15%
to more than 35% across 314 regions in 30OECD and 4 non-OECD European countries.
• Capitals and large cities often face a larger share of jobs potentially at risk than other regions in the same country
Regions with the highest share of jobs potentially at risk by country, TL2 regions
Note: Share of jobs potentially at risk
estimated under condition of full
lockdown and travel restrictions. The
sectoral composition of the regional
economy is based on data from 2017 or
latest available year
Source: OECD (2020), Coronavirus
(COVID-19)From pandemic to recovery:
Local employment and economic
development
11. Cities and capital regions have the highest capacity for
remote working
Share of jobs that can potentially be performed remotely (%), TL2, 2018
• Within countries, there is, on average, a 15-pp difference between regions with the highest and lowest shares of employed people that
can potentially work remotely. This share ranges from more than 50% in some capital regions (i.e. Ile de France, London, Stockholm)
to less than 25% in some regions Turkey, Slovak Republic, Italy and Spain.
• Rural regions have fewer occupations amenable to remote working (13 pp less than in cities, on average).
Share of jobs that can potentially be performed remotely (%), 2018
Source: OECD (forthcoming), Regions and Cities at a Glance 2020, OECD publishing
12. Beyond the direct employment effects, supply chain
disruptions can also have diverse effects on regions
Zurich
SouthAegean
EasternSlovenia
Kalmykia
NorthEast
Berlin
Qinghai
Burgenland
VilniusRegion
Latgale
Caquetá
Corsica
Algarve
Jeju
Yukon
Calabria
CanberraACT
UpperNorrland
GreaterLondon
D.C.
Ticino(399%)
Peloponnese
WesternSlovenia
Kaliningrad
West
Hamburg
Shanghai
UpperAustria
CentreandWest
Riga
LaGuajira
Normandy
Lisbon
Chungcheong
NewBrunswick
Veneto
WesternAustralia
WestSweden
Wales
Michigan
-50
0
50
100
150
200
Minimum region National average Maximum region
in % of GDP
Regional trade openness, TL2 regions
Imports plus exports in % of GDP, 2018
Note: Import plus export over regional GDP in 2015 $ PPP (%). Data refer to 2018 or latest available year
Source: OECD (2020), Coronavirus (COVID-19)From pandemic to recovery: Local employment and economic development
13. “Normality" is back in "consumer mobility", but probably
not that much in "workers mobility"
Visits to Places (% change from baseline TL2)
US
UK
Canada
Italy
France
Note: Visits to places as reported in the community mobility reports of Google. Baseline is teh median value, for corresponding day of the week, during the period 3 Jan2020 and 3 Feb 2o20
Source: OECD elbaroation baed on "Global Mobility Report" of Googlé”
14. Previous recessions have had long-term negative
impacts on regional disparities and local labour markets
Bottom worse off
Top worse off
-13000 -8000 -3000 2000 7000 12000
Slovakia
Poland
Lithuania
Czech Republic
nited Kingdom
France
Denmark
Korea
Estonia
United States
Latvia
Norway
Sweden
New Zealand
Slovenia
Netherlands
Japan
Germany
Greece
Spain
Spain
Hungary
Italy
Belgium
Finland
Austria
Portugal
Switzerland
Change inGDP pc gap top 20% to bottom 20% (2008-2017 minus 2000-2007 averages), USDPPP
Decreased regional inequality
Increased regional inequality
Regional disparity in GDP per capita, TL3 regions
96
97
98
99
100
101
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Metropolitan regions =100
Metropolitan regions Non-metropolitan regions with access to a metropolitan area
Non-metropolitan regions with access to a small/medium city Non-metropolitan regions far from a metropolitan area
Growth index
GDP per capita growth index in non-metropolitan relatively to metropolitan
regions
OECD area, index (metropolitan regions=100)
Source: OECD (forthcming), Rural Well-beong Framework: a geography of opportunities; (forthcoming), Regions and Cities at a Glance 2020, OECD publishing
Regional inequality increased in 24/28 OECD
countries between the pre-crisis and post-
crisis periods
• Regions near metropolitan areas have grown faster than
other regions in terms of GDP per capita, even faster than
metropolitan regions.
• Regions far from metropolitan areas have increased their gap
in GDP per capita with metropolitan regions and regions near
metropolitan areas, since 2009
15. Main immediate policy responses to overcome the crisis
across regions
1. Health responses and improving access to the medical services
• Initiatives to deliver and make available medical equipment (rural regions)
2. Initiatives to maintain basic services
• Securing food availability and assisting elderly
• Emergency aid and maintaining essential basic services
3. Supporting business
• Support for rural businesses and SMEs
• Measures to support primary sectors (agriculture, restaurants, tourism)
4. Improving digital infrastructures and digital tools
• Broadband and cloud services
• Access to E-education/ health
• Governance
5. Enhancing Workplace & commuting and public spaces
• Alternative work shifts, automatic doors
• Reclaiming public spaces for citizens
• Rethinking location of essential urban functions (15 minute city)
16. Emerging opportunities to attain a sustainable and
resilient recovery in the long-run
Opportunities
Higher relevance to enhance quality and use of digital tools/broadband in rural regions
Remote distributed work might increase linkages between rural and urban
Shift in consuming habits can favour local products and destinations
Greater awareness to ensure accessibility to quality services (e-health, e-education)
Re(near)-shoring of strategic industries that were once delocalised
Momentum to accelerate a just transition towards a low carbon economy for rural communities
Mobilise and strengthen local networks and cooperative structures to face future shocks
17. Assessing Impacts of covid-19 crisis in
French Regions for successful recovery
plans
09/08/2020
MICKAEL VAILLANT
Economic, HE&R and Digital Counsellor at
Régions de France
18. Pied de page – reprendre titre et date PAGE 18
Observed and expected impacts of the
current and coming crisis on French regions
At national level, economy shrank by 14% btw April and June = biggest quarterly fall
since WWII = A 3% loss in GDP for each month of lockdown.
Differential impacts by sectors / industrial branchs (aviation, automotive, tourism…)
Corporate failures : a forecasted increase by 21% by the end of 2020 (Coface)
Unemployment: a rise around +22% btw March and August
A massive impact on the Regions’ budgets and their financial capacity:
Emergency economic measures: 2bn€ (around 6% of global annual budget)
Loss of tax revenues in 2020: 1,5 - 1,8 bn€ (VAT, local taxes, revenues from public
transport e.g: IDFMobilités alone 3,6bn€).
In 2021, a loss of CVAE (production tax / main fiscal revenue of Regions) : btw 2 -
4bn€
19. Pied de page – reprendre titre et date PAGE 19
A collective work, a common approach : take responsability as economic leader by the law;
maintain investment; a real change/transformation is required
A « regional-based Industrial and Green New Deal »:
Support most impacted businesses and sectors/branches (competitivness, R&I, skills…)
Enhance the resilience of the economy and territories (digital, education, health,…)
Energy and environmental transition / low-carbon economy
A method :
Reaching a strategic partnership btw State – Regions (signed on July 30)
Securing stable and fair ressources: a key issue for Regions and a crucial negociation. A
« historic agreement » reached with the Governement : transfer of VAT and complete
compensation.
Design multiannual investment plans
Main tools :
State – Regions contracts (CPER) 2021-2027
UE funds / OP
program "Investing for the Future » (PIA4)
A common scheme, different strategies
20. Pied de page – reprendre titre et date PAGE 20
Challenges and key-factors of success from
the Regions’ point of view:
Ressources : secure ressources and find new fundings (financial instruments)
Achieve effective coordination btw national and regional recovery plans:
« sync » with the national plan : 100bn€, 3 axis (Competitivness / innovation / industry
; Skills, social and territorial cohesion; Greener economy): a « priority » for the
Government (through local selection of projects; devolving credits…)
Rely on the stronger cooperation developed with the Governement and the Ministry for
Economy (businessess in difficulties; equity capital funds; skills) since 18 months
Now more decentralization is needed, not just « deconcentration » and « differenciation »
(draft law « 3D »); decentralization / economic performance (OECD) = more than ever
connected in the recovery challenge…
21. TERRITORIAL IMPACT OF COVID-19 CRISIS IN OECD
COUNTRIES:
A FOCUS ON THE IMPACT ON SUBNATIONAL FINANCE
Dorothée ALLAIN-DUPRE
Head of Unit, CFE/OCDE
Dorothee.allain-dupre@oecd.org
30. Thank you
For more information
www.oecd.org/coronavirus
Dorothee.Allain-dupre@oecd.org
Link to the paper: oe.cd/il/2X6
31. OECD WORKSHOP ON STRATEGIES FOR
REGIONAL RECOVER - 8TH SEPTEMBER 2020
CARLO CIPICIANI – DIRECTOR IN HUMAN RESOURCES, PROGRAMMING, CULTURE AND TOURISM OF UMBRIA REGION - ITALY
32. CORONAVIRUS RESPONSE INVESTMENT INITIATIVE COVID-19
Regulation (EU) 2020/460 (CRII)
March, the 30th 2020 April, the 23rd 2020
Amendments to EU regulations
introduce specific measures to
mobilise investment in Member
States' health systems and
exceptional flexibility in the use
of funds in response to the
COVID-19 outbreak
Regulation (EU) 2020/558 (CRII+)
33. TOPICS COVERED UNDER THE CRII ITEM
08/09/2020
◼ Programme amendments, eligibility under CRII, etc.
◼ Simplified cost options
◼ Re-programming based on 100% co-financing rate (Applicable for the
accounting year 2020-2021, Optional MS may request it for one or more
priorities of the OP, for one or more OPs)
◼ Expenditure shall be eligible as of February, the 1st 2020
◼ Audit related issues
34. ◼ ERDF investment priority -1(b)- extended to cover investments in products and services necessary for fostering
the crisis response capacities:
1. health equipments and medications, testing and treatment facilities, disease and health prevention;
2. provision of protective equipments;
3. adapting the work environment in the health care sector;
4. infrastructure and equipment to ensure access to health care.
◼ Support to SMEs Working capital, undertaking in difficulty
◼ Financial instruments for SMEs
◼ Short-term employment schemes (ESF)
08/09/2020
TOPICS COVERED UNDER THE CRII ITEM: EXPENDITURE
35. RE-PROGRAMMING IN UMBRIA REGION FOR FOSTERING THE
CRISIS RESPONSE: EUROPEAN FUNDS ERDF AND ESF
08/09/2020
◼ National Level:
National Law Decree n.34/2020 of 19/05/2020, art. 242 provides specific rules for the contribution of the Structural Funds to
contrast the COVID-19 emergency, increasing the possibility of reporting the expenses related to the emergency, ensuring the
progression of the already undertaken commitments in the context of the 2014-2020 programming, thanks to the resources of the
Fund for Development and Cohesion.
Agreement between Government and Umbria Region, among other Regions, for strong Inter-institutional cooperation, aimed to the
optimisation of the contribution for the reprogramming of the European Fund for Regional Development (ERDF) and the European
Social Fund (ESF) on the priorities of the Coronavirus Response Investment Initiative (98.6 million€).
◼ Regional Level:
ERDF Programme 2014-2020 Umbria: Resolution of the regional executive board No. 349 of 08/05/2020 for an amount of 46.2
million €, approximately 10% of the entire programmeamount.
ESF Programme 2014-2010 Umbria: Resolution of the regional executive board No. 348 of 08/05/2020. Reprogramming of the
Programme for the emergency Covid-19 in order to support workers and families affected by the crisis for 52.8 million €.
36. ERDF PROGRAMME 2014-2020 UMBRIA REGION
08/09/2020
Planned interventions to contrast the COVID-19 emergency:
◼ financing a new action related to the health emergency, more precisely the purchase of PPE and health equipment (8
million €);
◼ refinancing an existing action related to new start-ups for an additional 3.5 million €;
◼ refinancing actions aimed at cultural and creative businesses (2.5 million €) and the social economy (0.5 million €) and
ICT (1.75 million €);
◼ support to the capital in circulation of companies for over 20 million €, intended, partially, to guarantee funds for loans to
businesses (about 12.5 million €), partially with non-repayable contributions in favour of the tourism field (about 7,5
million €);
◼ support for the tourism and culture field, severely affected and so critical for our economy: on one hand strengthening
tourism promotion actions (5 million €) and on the other, by sustaining the actions for our cultural heritage (4 million €).
37. ESF PROGRAMME 2014-2010 UMBRIA REGION
08/09/2020
Planned interventions to contrast the COVID-19 emergency:
◼ support worker categories (e.g. self-employed) not adequately covered by national interventions (8.5 million €);
◼ financing expenses for health personnel involved in fighting the emergency (1.5 million €);
◼ diversified support for the different levels of the educational and formal education path, starting from
kindergarten to university, willing to promote a conciliation goal between needs and working times
(approximately 33.6 million €);
◼ targeted interventions to support disadvantaged categories of the population (3.73 million €);
◼ new action for the restart of the regional economic and social system (10 million €).
38. THANK YOU
08/09/2020
Valeria Covarelli - Responsible of Communication ERDF OP Umbria Region
e-mail: vcovarelli@regione.umbria.it
Website: regione.umbria.it
E-mail: ccipiciani@regione.umbria.it
39. Measures and actions against COVID-19
Government of the State of Hidalgo, Mexico
Sergio Fernando Vargas Téllez
SECRETARY OF ECONOMIC DEVELOPMENT
September, 2020
40. The COVID-19 crisis is producing the worst economic contraction since the
Great Depression.
-15
-10
5
0
-5
10
15
1920
1922
1924
1926
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Percentrate
Great Depression
Tequila crisis
80´s national crisis
Crisis
‘08-’09 and AH1N1
COVID2020
• Central Bank of Mexico forecasts the national economy could fall up to 10 percent in 2020 and recovery to COVID-19 pre-
existing levels could take up to 5 years.
• The Federal government has implemented a fiscal stimulus of 1 percent of the GDP.
• Hidalgo State’s GDP forecast go to up to a 15% percent fall in 2020: +16,000 formal jobs lost and +400,000 people in
poverty.
• 95% dependancy on Federal fiscal transfers and 60 percent rate of labor informality: high vulnerability.
GDP GROWTH RATE
(1920-2020, per cent, 2013 constant Mexican pesos)
SOURCE: INEGI.2020, Bank of Mexico.
41. More than 50 sanitary, economic and social measures have been applied to
face the Covid-19 pandemic effects in Hidalgo, Mexico.
• Low-interest fixed-rate credits for SME´s to injectliquidity.
• Moratorium on debt payments of loans with the State Development Bank (e.g. SME´s loans or studentloans).
• Temporary reduction, to zero rate, of taxes collected by the State (e.g. payroll).
• Accelerated digitalization of SME´s in order to take advantage of electroniccommerce.
Economic stimulus measures
SANITARY SAFE MOBILITY SOCIAL EMPLOYMENT EDUCATION
• 5 hospitals were set up
across the State.
• High-tech medical
equipment acquisition.
• Alliance with private
medical service providers
to increase medical
capacity (e.g. w
ventilators).
• Mapping COVID-19 cases
and preventing their
spread in real time.
• Distribution of electronic
cards to avoid the use of
cash.
• Measures to reduce
mobility.
• Student scholarshipsfor
4 months.
• Delivery of breakfasts to
vulnerable families.
• Unemployment insurance
for people w/o social
security and who lost job
or got COVID-19.
• Distance educationwas
guaranteed, through
radio, TV, internet.
• Free teaching materials
delivered to families.
42. Economic recovery plan during uncertain times.
5 measures for economic recovery plan:
1. Low-interest rate loans for SME’s.
2. Boost road and industrial infraestructure trough PPP investment projects: high social return and high spending multiplier effect.
3. Reduction of the size of Government: savings andefficiency.
4. USMCA as an opportunity to attract investments looking for to relocate fromAsia.
5. Agressive deregulation agenda to make Hidalgo the easiest place to do business in Mexico.
• Jobs lost in urban areas related to high-value addedindustries.
• Service sector still not fully reactivated: informality and large number ofjobs.
• Reduced fiscal capacity for continuing fiscalstimulus.
CHALLENGES