The SAARC countries have rolled out a raft of stimulus packages to boost investments, buffer private businesses and bolster growth in response to the COVID-19 pandemic that has upended life and disrupted economic activity in a region inhabited by over 1.8 billion people.
The World Bank recently warned that South Asia faces its worst economic performance in 40 years due to the deadly coronavirus pandemic which has been wreaking havoc worldwide.
India, a $2.9 trillion economy - the biggest in the 8-member SAARC grouping, responded by unveiling an Rs 1.7 lakh crore ($22.6 billion) economic stimulus plan, providing direct cash transfer to poor senior citizens and women and free food grain and cooking gas.
Sri Lanka’s economy, hit by the COVID-19, is struggling to overcome the crisis and on March 31, the Central Bank announced a $250 million refinancing facility for banks, enabling them to expand their lending capacity by Rs 40,000 crores to businesses, offer loan repayment moratoriums and provide working capital at 4 per cent interest.
Sri Lanka is also planning to enter into an agreement with the Reserve Bank of India for a currency swap worth $400 million to boost the foreign reserves and ensure financial stability.
In Pakistan, when Prime Minister Imran Khan announced the lockdown last month, there was little resistance initially from the private sector. But, as it prolonged, unrest slowly started brewing among small businesses and shopkeepers who feared that they may not sustain the prolonged closure.
Bangladesh has announced an US$11.6 billion stimulus package to support the economy, with a primary focus on supporting the manufacturing and service sectors, agriculture and social safety nets. The Bangladesh Garments Manufacturers and Exporters Association has said that orders worth about US$3.2 billion were cancelled or suspended, affecting over 2.3 million workers.
Nepal’s business sector is expected to suffer a loss of around $1.25 billion due to the halting of economic activities during the lockdown, says Umesh Lal Shrestha, Vice President Associate, Federation of Nepalese Chamber of Commerce and Industries. Nepal’s tourism sector is the worst hit by the pandemic.
The Maldives government has announced an emergency 2.5 billion Maldivian rufiyaa ($161.8 million) stimulus package to shore up the local economy against the coronavirus pandemic, a local media report said.
Bhutan’s economy is having its worst year in the recent history with the GDP growth projected to decline by anywhere between 1-2 per cent depending on how long the pandemic lasts, Kuensel newspaper quoted economic affairs minister Loknath Sharma as saying.
Afghanistan is a heavily aid-reliant and import-dependent economy. The Afghan government has allocated about $25 million to deal with the crisis. (economictimes.indiatimes.com)
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