The world is emerging from the biggest social and economic shock in living memory, but it will be a long time before the deep scars of the COVID-19 pandemic on human well-being fully heal.
In the Asia-Pacific region, where 60 per cent of the world lives, the pandemic revealed chronic development fault lines through its excessively harmful impact on the most vulnerable. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) estimates that 89 million more people in the region have been pushed back into extreme poverty at the $1.90 per day threshold, erasing years of development gains.
“The economic and educational shutdowns are likely to have severely harmed human capital formation and productivity, exacerbating poverty and inequality, says Armida Salsiah Alisjahbana, United Nations-Under-Secretary-General and Executive Secretary of the ESCAP.
“The pandemic has taught us that countries in the Asia-Pacific region can no longer put off protecting development gains from adverse shocks.”
“We know that the post-pandemic outlook remains highly uncertain. The 2021 Economic and Social Survey for Asia and the Pacific released today by ESCAP shows that regional economic recovery will be vulnerable to the continuing COVID-19 threats and a likely uneven vaccine rollout. Worse, there is a risk that economic recovery will be skewed towards the better off – a “K-shaped” recovery that further marginalizes poorer countries and the disadvantaged.
The good news is that countries in Asia and the Pacific have taken bold policy measures to minimize the pandemic’s social and economic damage, including unprecedented fiscal and monetary support. Last year, developing countries in the region announced some $1.8 trillion, or nearly 7 per cent of their combined GDP, in COVID-19 related budgetary support. But investments in long-term economic resilience, inclusiveness, and green transformation have so far been limited.
ESCAP research maps out a “riskscape” of economic and non-economic shocks – financial crises, terms-of-trade shocks, natural disasters, and epidemics – and shows that all adverse shocks have cause severe damage to the region’s social, economic, and environmental well-being.
Estimates show that such an approach could reduce the number of poor people in the region by almost 180 million and cut carbon emissions by about 30 per cent in the long run.
Building resilience does not add too much financial burden to the region if such investments are accompanied by bold policy actions, such as ending fuel subsidies and introducing a carbon tax.
COVID-19 has been a trauma like no other. “Yet, it offers a unique opportunity for governments and other stakeholders to chart a new path to rebuilding. Whilst being forced to adjust, the Asia-Pacific region has seen fundamental transformations in lives, workplaces and habits.”
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