COVID19 a wake-up call to address development fault lines in Asia and the Pacific.

Byline: Armida Salsiah Alisjahbana

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.

The pandemic has taught us that countries in the Asia-Pacific region can no longer put off protecting development gains from adverse shocks. We need to rebuild better towards a more resilient, inclusive, and sustainable future. 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. Building a resilient and inclusive future 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. The region's vulnerability to shocks like COVID-19 was heightened by its lagging performance towards achieving the Sustainable Development Goals, which would have enhanced resilience by reducing entrenched social, economic, and environmental deficits. The evidence shows that we need a better understanding of the Asia-Pacific region's complex risk landscape, and a comprehensive approach to building resilience in the wake of the COVID-19 crisis. Building resilience into policy...