An Indonesian proverb says that a firm tree does not fear the storm. After the Asian Financial Crisis of 1997/98, Asian economies recovered with strong economic growth (on average 4.2% annually), which over the past decade has contributed to a decline in “absolute poverty”–here defined as those with incomes of less than $2 per day. The share of people living in poverty fell from over half to a third of Asia’s population, with large reductions especially in China, Indonesia and Viet Nam. Greater prosperity has also contributed to lower fertility rates and higher life expectancy.
The Sustainable Development Goals (SDGs) and related targets in the Paris Agreement on climate change provide strong frameworks for the recovery from the coronavirus disease (COVID-19) pandemic in Asia and the Pacific, Asian Development Bank (ADB) President Masatsugu Asakawa said at a high-level event hosted by UN-ESCAP today focusing on Financing for Development in the Era of COVID-19 and Beyond in Asia and the Pacific. “We need to rebuild our economy and society with green, resilient, and inclusive measures,” Mr. Asakawa said.
The previous blog in this series looked at how much Pacific governments were spending in response to COVID-19. Of equal interest is the question of what they are spending on. As part of our Pacific Covid Economic Database research, we have attempted to answer this question for the seven countries of Fiji, Papua New Guinea (PNG), Samoa, Solomon Islands, Tonga, Timor-Leste and Vanuatu. We have divided governments’ additional COVID-19 expenditure into six categories: health, safety nets, business support, food security, infrastructure and other expenditure.
The global pandemic has posed major development challenges affecting the lives of millions of people around the world. COVID-19 response measures have curtailed economic activities and placed a growing number of individual’s livelihoods at risk, with many slipping below the poverty line with narrow options for recovery.
World Vision (WV), in the Asia Pacific, began its humanitarian response as COVID-19 confirmed cases continued to increase in China. As the virus spread across the region and governments started taking drastic public health measures to protect their citizens, WV found that children were among the most affected by the severe consequences of lockdowns and major economic contraction’ and scaled up its emergency response to include the 17 countries in the Asia Pacific.
As COVID-19 grips the world, market economies have shuttered, schools have closed, and nearly half of the global population is confined to their homes. Yet millions of care workers step out every day to keep the lights on and support those in need, for very low wages. Majority of these care workers are women – nurses, community health workers, nursing home staff, sanitation workers, laundry workers, and others – whose work has been serially undervalued and underpaid.
Having spread to over 185 countries and infecting millions, the COVID-19 pandemic has created a global health emergency and profound economic shock. Asia and Pacific is one of the hardest-hit regions due to its high population density, yet to be eliminated poverty, and large numbers of informal and migrant workers in vulnerable sectors. Millions may return to poverty if incomes and livelihoods are not protected during the crisis.
The COVID-19 pandemic has created a perfect storm of crises across Asia, resulting in widespread job losses or cuts in wages in both the formal and informal economies. All Asian economies have been hit hard by the crisis, with economic growth falling significantly, while some countries are predicted to fall into recession. The COVID-19 crisis and its widespread impacts demonstrate the need to reform current social security systems in Asia.