Reversing the impact of COVID-19, rebuilding economies in Asia – Universities

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Mustafa Talpur

Islamabad ●
Sat 12 November 2022

2022-11-12
02:10
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c5efdab62cf99b86ccd9cf648244b5ef
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Academia
COVID-19, impact, job cuts, Southeast Asia, poverty, prices, increase, public health, investment, Internet, access, school
Free

The COVID-19 pandemic has left massive scars on societies and economies in Asia. Asia-Pacific countries were ill-prepared to deal with COVID-19, with 36% of their citizens without access to healthcare, 57% without access to social protection and 51% of workers having no formal right to work.

While the full economic and social costs have yet to be determined, some initial estimates indicate that more than 1.5 million people lost their lives and 150 million people were pushed into poverty. The gains made in recent years in terms of reducing poverty and reducing inequalities have been wiped out.

Among other factors, rising unemployment, reduced household incomes, food inflation, crowding out of equity-enhancing government spending, loss of schooling and learning opportunities, the glaring digital divide, the loss of remittances have contributed to increased poverty and inequality.

The pandemic has pushed 90 million people into extreme poverty on the basis of US$1.90 a day and more than 150 million and 170 million below the poverty line of $3.20 and $5.50, respectively. by 2021, in developing countries in Asia-Pacific. These increases brought the total number of people living in extreme poverty to over 500 million, and those living in poverty to over 1.4 billion.

World Bank surveys indicate that income inequality in the region likely increased by an average of 8% during the COVID-19 pandemic. Inequality between countries increased by 1.2% between 2017 and 2021, the first such increase in a generation, income inequality within countries has also increased in many countries. Wealth inequality has also increased during COVID-19. In 2021, the top 1% held one-fifth of the wealth in all Asian countries and more than 25% in 18 countries.

The COVID-19 containment measures have led to widespread job losses and rising unemployment. In 2020, there was a 7.9% reduction in working hours, equivalent to 140 million job losses. Job losses and quarantines are hitting poor and low-income households.

With informal workers more vulnerable to social distancing and lockdown measures, and high proportions of women working in the informal sector, the pandemic has deepened gender inequalities.

Women in the region already shouldered disproportionate care responsibilities, spending an average of 11 hours a day on unpaid care and domestic work. Pandemic-related shutdowns, business and school closures, and mobility restrictions have led women to spend more time on unpaid household activities.

Job losses, closure of small businesses, disruptions to supply chains and reverse migration have contributed to the loss of household income. Labor income was estimated to have decreased by 13.4% for South Asia, 5.0% for South-East Asia and the Pacific and 4.1% for North Asia. the East in 2021. 83%, 70%, 55%, 75% and 48% of households in Cambodia, Vietnam, the Philippines, Thailand and Laos, incomes respectively decreased.

In July 2022, food prices increased by 7-9% in India, Indonesia, Malaysia, Nepal, the Philippines and Thailand, by 20-22% in Kazakhstan, Laos and Mongolia, by 29 % in Pakistan and 91% in Sri Lanka, compared to the same month in 2021. As poor and low-income households spend a disproportionate share of their budget on food, they have been particularly affected.

The pandemic and rising food price inflation have worsened food security in Asia-Pacific. In 2021, hunger affected 425 million people in Asia. Overall in the region, an estimated 1.1 billion people experienced moderate or severe food insecurity in 2020.

The effects of the pandemic can last a long time. For example, the loss of learning opportunities due to school closures, affecting millions of students, especially from poor and vulnerable households, exacerbated by the digital divide, will take many years to be reversed, if ever. .

Internet connectivity allows workers to work from home and children to access online education. However, this luxury was not available to many. Lack of internet access deprived timely access to public services, including benefits, work options and online learning opportunities.

Governments in the region responded to the crisis according to their fiscal space in 2020 and 2021. These measures included direct cash transfers, subsidies on food, subsidies on utility charges, subsidies to businesses under worker retention schemes, support for SMEs to withstand economic shocks, increased health spending, extension of subsidized loans to households and businesses, tax credits/cuts and delay in tax collection . Given the impact of the crises, the responses were not consistent with the losses.

The pandemic has revealed significant weaknesses in existing health systems in many Asia-Pacific countries due to many years of underinvestment in public health. There has been a lack of health facilities, trained health professionals, medical equipment, testing facilities and medicines. The majority of people pay out of pocket for essential medical services.

Throughout the region, social protection systems are not equipped to provide adequate responses to the economic and social shocks caused by the pandemic. The majority of populations were excluded from existing social protection programs. The vast majority of those excluded from social protection programs were informal workers. In light of this, it is critical that all governments take the following actions while rebuilding post-COVID economies to address rising poverty and inequality:

  • Increase investment in public health systems to prepare for any future health crises, by building more hospitals, training more doctors and nurses, making more medical equipment available and working to achieve universal health coverage.
  • Extend the scope and coverage of social protection to achieve universal access. Social protection programs should include all informal workers. Programs should go beyond pensions and cover unemployment, health care and injury protection.
  • Invest more in the public education system to create equality of opportunity and make up for lost years of schooling. It is also essential to reduce and eliminate the digital divide by providing affordable and subsidized access to the Internet.
  • End gender discrimination by providing more employment opportunities for women, economic and political empowerment of women, and increased investment in care infrastructure and services to reduce women’s disproportionate care responsibilities .
  • Asia-Pacific is highly vulnerable to climate change. Therefore, given the opportunity to rebuild post-COVID-19 economies, countries need to accelerate the transition to renewable energy sources, invest in climate adaptation, and meet their carbon reduction targets.
  • Take concrete tax policy measures to increase revenue to fund social protection and public services. These may include the introduction of capital gains, property and inheritance taxes; reduce exemptions and incentives; levying “solidarity taxes” on the wealthy and “windfall taxes” on companies that profit from oil prices, and ensuring that multinational corporations pay fair taxes by reducing harmful tax practices and evasion tax. Introduce wealth taxes, both as one-off emergency measures and on a recurring basis as part of ongoing redistributive policies.

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The author is Regional Advocacy and Campaigns Manager at Oxfam International.


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