Post-COVID: Rebuilding economies in Asia

The COVID-19 pandemic has left massive scars on societies and economies in Asia. Asia-Pacific countries were poorly prepared to face COVID-19, with 36 percent of its citizens lacking access to health care, 57 percent lacking access to social protection, and 51 percent of workers having no formal labor rights.

While full economic and social costs have yet to be determined, some initial estimates indicate that over 1.5 million people have lost their lives, and 150 million people have been pushed into poverty. The gains made in recent years in poverty reduction and the decline in inequality have been wiped out. Among other factors, rising unemployment, reduced household incomes, food inflation, crowding out of government equity-enhancing spending, loss of schooling and learning opportunities, glaring digital divide, and loss of remittances contributed to the increase in poverty and inequality.

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

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

The pandemic has worsened gender inequality. Women in the region were already taking disproportional care responsibilities, they spent 11 hours per day on average on unpaid care and domestic work. The pandemic-related lockdowns, closures of businesses and schools, and mobility restrictions have led women to spend more time on unpaid domestic activities. Job losses, shutting down of small businesses, disruptions to supply chains, and reverse migration contributed to the loss of household incomes.

Governments in the region responded to the crisis according to their fiscal space. These measures included direct cash transfers, subsidies on food, subsidies on utility charges, grants to firms under workers retention schemes, support to SMEs to withstand the economic shocks, increasing health spending, extending subsidized loans to households and firms, tax credits/reduction, and delay in collecting taxes. Given the impact of crises, the responses were not compatible with the losses.

The pandemic has exposed significant weaknesses in existing health care systems in many countries due to many years of underinvestment in public health. There has been a lack of health facilities, trained medical professionals, medical equipment, testing facilities, and medicines. Majority of people pay out of their pocket to get essential medical services. Across the region, social protection systems are not equipped to provide adequate responses to economic and social shocks brought about by the pandemic.

Majority of populations were excluded from existing social protection programs. A large majority of those excluded from the social protection programs were informal workers. In light of this, it is critical for governments to take the following actions while rebuilding the post-COVID economies to tackle rising poverty and inequality: increase investment in public health systems to prepare for any future health crises, build more hospitals, train more doctors and nurses, make available more medical equipment, and strive to achieve universal health coverage. Expand the scope and coverage of social protection to achieve universal access and include all informal workers. The programs should go beyond pensions and cover unemployment, health care, and protection of injuries. Invest more in the public education system to create equal opportunities and make up for the lost schooling years. Reduce and eliminate the digital divide by providing affordable and subsidized access to the internet. End gender discrimination by providing more employment opportunities to women, women’s economic and political empowerment, and increase investment in care infrastructure and services to reduce disproportional care responsibilities of women. The Jakarta Post/Asia News Network

Mustafa Talpur is regional advocacy and campaigns lead at Oxfam International.

The Philippine Daily Inquirer is a member of the Asia News Network, an alliance of 22 media titles in the region.