Minister for Development Cooperation and Foreign Trade Ville Skinnari on the impacts of the coronavirus pandemic

The Minister for Development Cooperation and Foreign Trade says that the Government is trying to ensure the continuation of normal cargo and goods traffic. The situation in developing countries is supported through humanitarian aid, for example.

1. Many countries are closing their borders. How will this affect Finland’s foreign trade? What sectors will be affected the most?

Now that the coronavirus infections have reached the level of a pandemic, the negative effects on trade are already evident in declining demand and disruptions in production chains. More detailed information about the impacts will be available when the customs statistics for the first months of the year are ready.

To date, borders have been closed mainly for the traffic of private persons while measures restricting direct trade in goods has remained limited.  As international trade is largely based on human interaction, travel restrictions applying to private individuals will have repercussions on trade as well.

It is also important to note the link between cargo (freight and mail) transport and passenger traffic. When passenger aircraft carry cargo, cancelled flights disrupt the movement of cargo.  This also applies to maritime transport where ferries carry both passengers and goods. The first to suffer from this are air transport and airborne cargo as well as tourism, which has been a growing part of the trade in services sector also in Finland. Passenger ship traffic will also decrease.

Efforts will be made to ensure that cargo and goods traffic could continue as usual, but travel restrictions will lead to declining volumes of foreign trade. Should the situation persist, few sectors will remain intact. However, at this point it is too early to give any assessment of the sectoral impacts of the coronavirus outbreak.

2. What is the Government doing to help companies?

The Government has decided on significant measures to support companies and business life through the crisis caused by coronavirus. The size of the support package is EUR UR 15 billion. The measures covered by the package are mainly related to raising authorisations to grant loans and guarantees. The aim is to help businesses survive through this crisis and to safeguard jobs. 

The Government has decided on several support measures targeted at businesses. These include, for example, measures that will temporarily strengthen the income security for unemployed freelancers and self-employed owners of a business, ease employer obligations relating to the cooperation procedure, pension insurance contributions and taxes, and strengthen advisory services for businesses.

Finnvera’s capacity to respond to the growing demand for funding will be increased from the current EUR 4.2 billion to EUR 12 billion. The aim is to ensure that Finnvera will be able to guarantee companies’ bank loans. Additionally, the budget authority for Business Finland's activities to fix the disturbances will be increased from EUR 30 million to EUR 150 million.

3. The spread of the COVID-19 pandemic may exacerbate the world’s humanitarian crises – what can Finland do?

The epidemic caused by the spread of coronavirus will have serious humanitarian consequences. It is already hampering the provision of emergency relief aimed at saving lives all over the world. Logistic supply chains have been disrupted, which is why the availability of foods and other essential commodities, such as tents, blankets and medicines, has deteriorated. The virus has spread to more than 50 countries, which were living in the middle of a crisis even before the coronavirus outbreak. As many as 168 million people are in need of emergency relief.

The situation is worst in such fragile countries and countries affected by prolonged conflicts as Syria, Yemen and South Sudan, which have a poor healthcare system and where a great number of people are in a vulnerable position. People staying in refugee camps and similar settlements are in the greatest danger. In many areas, it is practically not possible to carry out testing or to isolate people who have contracted the disease.

The majority of Finland’s humanitarian funding is multi-annual, proactive core funding, which enables recipient organisations to be prepared for such sudden crises as the coronavirus pandemic. The United Nations Refugee Agency, UNHCR, has prepared guidelines to prevent and curb the spread of the epidemic in refugee camps. Many solutions are simple: one of the priorities is ensuring access to clean water and soap to everybody. A while ago, I signed Finland’s humanitarian aid package for the current year. However, more assistance will be needed because of this dangerous pandemic.


4. What kind of long-term effects are expected to follow from the coronavirus outbreak on developing countries? How is the international community preparing for these effects?

Developing country economies are particularly vulnerable to crises and their response capacity will be put to the test when the outbreak spreads. Additional global measures are therefore necessary to strengthen our ability to be prepared, prevent and contain the virus.

Another concern is the epidemic’s adverse effects on women. The socio-economic impacts of the virus will affect the genders in different ways. This applies to girls’ schooling and female entrepreneurs’ income. In light of previous epidemics, it is clear that overloaded healthcare systems cannot provide adequate sexual and reproductive health services, and restrictive measures put in place to prevent the spread of the disease limit access to these vital services at a time when women and girls would need them more than ever before.

The European Commission has proposed a supplementary budget to implement these measures, some of which are aimed at mobilising funding for the World Health Organization. Development banks, including the World Bank Group and the European Bank for Reconstruction and Development (EBRD), have launched a major financing package and measures to help support the maintenance of healthcare systems and economic activities in developing countries.

It is also good to remember the valuable work that Finnish civil society organisations are doing in developing countries, often working with the most vulnerable groups and communities.  The organisations reach grassroots actors and concretely implement the principle of leave no one behind. Many organisations and their local partners are present in the least developed countries or crisis areas and are prepared to react to changes in the working environment. We can respond to the challenges encountered by developing countries also through these organisations and in this way show that we take care of our responsibility for the most vulnerable people. It is very important just now to make sure that this work can continue.