What are governments doing to support the regions, cities and towns hardest-hit by COVID-19?

This global research scan by INGSA and the Blavatnik School of Government summarises policy initiatives introduced around the world to support local places that have been disproportionately affected by the pandemic. It is part of IPPO’s workstream to help inform policymakers throughout the UK on place-based recovery strategies

Introduction

The COVID-19 pandemic has drastically impacted economies on a national and global scale, causing the largest global economic shock in decades (World Bank 2020). But at a local level, the impacts have varied depending on many (interlinked) socieconomic factors such that even neighbouring towns or villages may have experienced the pandemic in quite different ways, leading to different policy support needs and recovery strategies.

This research scan assesses what kind of initiatives have been taken by governments around the world to support local places that have been disproportionately affected by the pandemic. Information on policies was collected through the Oxford COVID-19 Government Response Tracker (OxCGRT) and the International Network for Government Scientific Advice (INGSA) databases and contributor networks.

Note: Even though most countries have implemented regional policies in some form (eg. a lockdown in one city), this scan focuses on concrete, targeted regional initiatives that sought to diminish the local economic impact of the COVID-19 pandemic.

Summary of findings

This scan finds that governments have implemented a range of policies to mitigate the local social and financial impact of the COVID-19 pandemic. Government policies to support places especially affected by the pandemic can be grouped into several key themes:

  • recovery programmes and funds;
  • domestic tourism packages and initiatives; and
  • cash transfers and vouchers.

Several countries – among them Australia, Canada, and New Zealand – have initiated local recovery programmes or funds to local places that were especially affected by the COVID-19 pandemic. For instance, in the Netherlands, a recovery programme provided additional financial support to businesses in areas with a high concentration of tourism. In some countries, recovery programmes and investments targeted particular sectors, including in Haiti and Liberia which both provided support to parts of their agriculture sector. Other countries, such as Cambodia, provided support in the form of a local tax holiday for sectors that were disproportionately affected by the current health crisis.

In some countries, tourism packages and incentives were established to boost economic activity in tourism hotspots and regions. This includes the creation of vouchers and benefit programmes in local areas in the Czech Republic, Malta and Australia to boost tourism. Others have opted for domestic tourism marketing campaigns to encourage domestic travel, such as Saudi Arabia and the United States.

Other countries, such as Kenya, implemented a city-wide scheme to offer financial support to vulnerable groups.

The remainder of this global scan provides a nuanced description of local policies and initiatives that sought to support areas and regions that were especially affected by the COVID-19 pandemic. These are divided up as follows: (1) recovery programmes and funds; (2) domestic tourism packages and initiatives; and (3) cash transfers and vouchers.

1. Recovery programmes and funds

In March 2020 the Australian government created a $1 billion COVID-19 Relief and Recovery Fund to support regions and sectors that have been particularly affected by the COVID-19 pandemic (1). Moreover, the government established a COVID-19 disaster payment fund in March 2021 to support the state of Victoria during its lockdown (2, 3) and was later extended to New South Wales due to increased restrictions. The fund is only available in Commonwealth-declared hotspots (4).

On March 31 2020, the Cambodian government implemented a three-month tax holiday from March to May for hotels, guesthouses, restaurants and tour companies in Phnom Penh, Siem Reap, Preah Sihanouk, Kep and Kampot provinces, as well as in Bavet and Poipet cities (5).

On 7th June 2021, the Canadian government announced to invest over $15 million in 99 municipalities of Northern Ontario that have been particularly affected by the COVID-19 pandemic. In addition, on 11th June 2021, the Canadian government announced to invest over $1.3 million in nine projects in the Districts of Kenora, Algoma, Cochrane and Timiskaming in Northern Ontario (6).

In Estonia, €1 million aid was provided to tourist companies on the islands of Saaremaa, Hiiumaa, Virmsi, Ruhnu, Kihnu, Muhu and Manija. Another €1 million was allocated for Ida-Viru County. (7, 8).

In Fiji, the government allocated $4.3 million in total payouts for households affected by the COVID-19 pandemic (9, 10, 11). Over 36,000 households in the Nadi and Lautoka containment areas together with around 12,000 households in Lami, Suva, Nasinu and Nausori received financial support from the government.

Haiti’s Emergency Project for Strengthening the Resilience of Small Farmers to the Consequences of the COVID-19 Pandemic (PURRACO, by its French acronym) will rehabilitate small-scale irrigation systems, provide essential agricultural inputs, and help increase farmers’ resilience (12). PURRACO is targeted to the four areas most affected by food insecurity, namely, the Northwest, the Northeast, the Central and the South Departments.

In the Kyrgyz Republic, the government allocated $21 million for the CASA-1000 Community Support Project. Along with other projects, this sought to mitigate the economic and social impacts of COVID-19 on rural communities, including vulnerable households in all 453 Ayil Aimaks (sub-districts) of the country (13).

In Liberia, the USAID Feed the Future Liberia Agribusiness Development Activity launched a rice seed voucher scheme for the farmers in the rural areas of the Bong, Nimba and Lofa Counties in June 2020. The fund had the objective to stabilize food provision since the COVID-19 pandemic has caused ruptures in food security (14).

In the Netherlands, travel restrictions have severely impacted the tourism industry in the territories of Bonaire, St. Eustatius and Saba (15). In addition to existing measures, the government introduced a temporary loss of wages scheme, expanded the temporary allowance for fixed expenses (to a maximum of 50,000 € for companies) and temporarily added the KCC scheme (Klein Krediet Corona scheme) for small entrepreneurs.

In New Zealand, the government unveiled a $200 million support package for hard-hit tourism players to ensure their long-term transformation and resilience during the COVID-19 pandemic. The focus of this plan is on five “vulnerable” South Island regions: Fiordland, South Westland, Queenstown Lakes, Mackenzie District and Kaikōura (16).

Across the United States, several regional policies were implemented:

  • The city of Phoenix approved a grant to help artists and performers who lost contracts and suffered from event cancellations due to COVID-19 (17, 18, 19, 20, 21, 22). On 21 May, 2020 the Restaurant Restart Resiliency Grant was launched, which offered assistance of up to $10,000 to local restaurants and food trucks that had suffered at least 25% drop in sales in March and April 2020.
  • The city of Boston launched the Restaurant Revitalization Fund and the Small Business Relief Fund 2.0, giving a total of $9.4 millions to restaurants and small businesses that were particularly affected by the COVID-19 pandemic (23).
  • Some counties and cities in the state of Virginia, such as Chesterfield County and Virginia Beach, offer support for urban centres by providing grants up to $10,000 to small businesses impacted by COVID-19. Requirements vary by localities (24, 25).

In China, Hangzhou, the capital of Zhejiang province, offered 1.68 billion yuan worth of consumption coupons to support more than six million local offline merchants (26, 27). In Nanjing, the capital of Jiangsu province, 318 million yuan worth of consumption coupons, as well as welfare for low-income communities, have been distributed (28).

In the United Kingdom, business grants aim to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by government restrictions. Local Authorities will also receive a 5% top-up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories (29, 30, 31).

In Vietnam, social security packages provide financial support to freelancers, households, and the workforce affected by the COVID-19 pandemic in Ho Chi Minh city. Moreover, a distribution centre was established in Ho Chi Minh city to handle donations and distribute essential goods to vulnerable communities affected by COVID-19 outbreaks (32, 33, 34, 35).

In Italy, increased benefit rates are provided if the R&D activities are carried out in the Southern Italian regions (36).

The Japanese government offers regional revitalisation grants to municipalities that promote teleworking, except Tokyo, and the prefectures of Chiba, Saitama, and Kanagawa (37).

2. Domestic tourism packages and incentives

In Antigua and Barbuda, the government established a special visa with the aim to generate revenue that was lost due to the lack of tourism and canceled events. The visa system seeks to revitalise domestic tourism, as COVID-19 travel restrictions restricted short-term travel (38, 39).

The Australian government is waiving up to AUD 11.2 million in entry fees to Booderee, Kakadu, and Uluru-Kata Tjuta National Parks and reimbursing the cost of permits and licence fees for commercial tourism businesses (40, 41, 42).

In the Czech Republic, the government invested 100 million CZK to attract domestic tourism in Prague, using vouchers and benefit programmes such as admission discounts. (43, 44, 45).

In Cyprus, the government covered 25% (35% from 01.06.2021) cost of hotel overnight stay for locals. Cyprus was severely affected by the COVID-19 pandemic due to the dampening of the tourism sector (46, 47, 48, 49). The policy has been extended thrice due to the perceived benefits provided to the tourism sector and the economy as a whole (50).

The government of Malta launched a tourism revival scheme, subsidising foreign tourists staying at least three days in Malta, with up to 200 Euros. For those who visit Gozo, the subsidy is increased by 10% (51). Additionally, every resident in Malta will receive several vouchers; four of those can be used at hotels, accommodations, restaurants, bars and diving schools. The remaining €20 voucher can be used for retail and services provided by a large number of businesses which had to close due to legal notices 76 and 95 published in March of 2020.

In Saudi Arabia, the Saudi Tourism Authority announced Saudi Summer, a domestic tourism campaign aimed to encourage residents to explore the country in lieu of taking holidays abroad (52, 53). The 10 areas promoted are: Jeddah and KAEC; Abha; Tabuk; Khobar, Dammam and Ahsa; Al Baha; Al Taif; Yanbu and Umluj; and Riyadh.

3. Cash transfers and vouchers

In Kenya, President Uhuru Kenyatta introduced a scheme supporting vulnerable groups in informal settlements in the City of Nairobi by providing access to free water, as well as weekly cash transfers via mobile money platforms (54).

Two related initiatives are highlighted in the United States:

  • In Alaska, from 1 June 2021, international tourists have been offered free COVID-19 vaccines at major airports in order to rebound the state’s devastated tourism industry (55, 56, 57). This programme may help specific communities such as Juneau and Ketchikan that are estimated to have lost more than $33.7 million and 19.3 million in annual revenues.
  • In California, various airports, such as San Francisco Airport and John Wayne Airport, offer free vaccination to international tourists in order to boost tourism (58, 59, 60). In 2020, the California tourism industry took an estimated $80 billion dollar hit, and the free vaccination programme has been proven to be successful in bringing in foreign tourists. As of May 2021, around 70,000 Peruvians had travelled to the US just to get vaccinated.

Global scan authors

Martina Di Folco, Naomi Simon-Kumar, Toby Phillips, Annalena Pott, Tatjana Buklijas, Paul Baki, Sakina Bano Mendha, Modesto Cruz, Catalina Galuzzi, Akhila K. Jayaram, Simran Kapoor, Rachelle Koch, Yanying Lin, Tomáš Michalek, Trang Nghiem Nguyen Minh, Martina Podestà, Sonnet Sarkar, Caitlin Sarro, Anthony Sudawarman, Hui Zhou.

Summary of initiatives

Country Summary
Antigua and Barbuda Visa allows non-Barbados citizens to live and work remotely from Barbados for 12 months.
Australia Establishment of COVID-19 Relief and Recovery Fund and COVID-19 disaster payment fund to support regions especially affected by the pandemic.
Cambodia Three-month tax holiday for the tourism industry in Phnom Penh, Siem Reap, Preah Sihanouk, Kep and Kampot provinces, as well as in Bavet and Poipet cities.
China Consumption coupons and welfare offered to offline merchants in Hangzhou and Nanjing.
Czech Republic Investment to boost tourism in Prague.
Cyprus Financial aid for hotels.
Estonia Financial aid to tourism companies on the islands of Saaremaa, Hiiumaa, Virmsi, Ruhnu, Kihnu, Muhu and Manija as well as Ida-Viru County.
Fiji Payouts allocated to households affected by the COVID-19 pandemic.
Haiti Emergency Project to help Haitian farmers recover from the impact of COVID-19 and increase staple food production.
Italy Tax Credit for Research and Development in the South of Italy.
Japan Revitalisation grants for municipalities that promote teleworking.
Kenya Free water and cash transfer programme via mobile money platforms for vulnerable populations in the city of Nairobi.
Kyrgyz Republic Fund to support rural communities and vulnerable households.
Liberia Launch of rice seed voucher scheme.
Malta Malta increased subsidies for tourists when they visit Gozo island. Vouchers to be spent in local businesses.
Netherlands Additional emergency package for residents and businesses on Bonaire, St. Eustatius and Saba.
New Zealand Support package for areas where the tourism industry was affected by the COVID-19 pandemic.
Saudi Arabia The Saudi government launched a domestic tourism campaign.
United Kingdom Business Grants for Local Authorities (LAs) in need of additional funding for business in high-alert level areas.
United States
  • Alaska and California: offers free COVID-19 vaccines to international tourists to recover its tourism industry.
  • Arizona: Phoenix Arts and Culture Coronavirus Relief Program for Artists and Arts Professionals. City of Phoenix Restaurant Restart Resiliency Grant.
  • Massachusetts: Restaurant Revitalization Fund and the Small Business Relief Fund 2.0.
  • Virginia: Pandemic Relief Fund for Small Businesses
  • Washington, DC: DC Small Business Recovery Micro-grants Program.
Vietnam Social security package to provide financial support to vulnerable groups and establishment of a distribution centre in Ho Chi Minh city to distribute essential goods.