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Referring to the much-talked-about K-shaped recovery, which means some groups or countries recover much faster than others, the report said most countries will take years to attain pre-pandemic income levels.
“A K-shaped global economic recovery…appears plausible. Most countries will take years to attain pre-pandemic income levels,” said a joint report ‘Responding to the COVID-19 Pandemic: Leaving no Country Behind’ by the ADB, UNDP and the UNESCAP.
Reflecting back to the economic recovery process after the 1997-98 financial crisis, the report said the effects of the COVID-19 pandemic are likely to be “worse”.
Advocating that there should not be premature withdrawal of fiscal support by the governments across the globe, it said more action is needed including income support through well-targeted cash transfers, wage subsidies, unemployment insurance tax deferrals, moratoria on debt services as well as equity-like injections into viable firms.
The report said that while income equality fell in most of the regions globally during 1995-2015, it rose over 5 percentage points in Asia and Pacific.
“In some 40 per cent of countries in the region, income inequality increased. Worryingly, the market income Gini coefficient soared in China, Indonesia, Bangladesh and India, which are among the five most populous countries in the region and account for over 70 per cent of its population,” the report said.
According to the report, the differences in infections and immunity, financial positions, quality and coverage of healthcare systems and COVID-19 vaccine rollout are likely to lead to an uneven recovery across countries in Asia-Pacific.
The region’s most-affluent countries are likely to recover more quickly than the poorer countries, said the report.
“There is a fear of multispeed access to vaccines. Developed countries, together with Singapore, the Republic of Korea, China, India, Russian Federation and Turkey, may achieve herd immunity within 2021; while for other developing Asia-Pacific countries, inoculations are likely to have a significant impact on immunity only in 2022,” as per the report.
The pandemic has impacted the economic sectors and households unevenly, like the digital and technology divide.
Gaps in economic capability may lead to substantial cross-country divergence in adapting transformative change brought about by teleworking, digitalisation and automation, in the post-pandemic economy.
“The pandemic may drive greater inequality and social instability, especially in some of the poorest and most fragile parts of the region. A K-shaped recovery and a widening chasm between developing and developed countries remains a major risk,” it added.
However, the report underlined the immense promise digitisation holds in unlocking new paths to sustainable development.
Digitisation needs to be complemented with necessary transformations of economics, public institutions and behavioural norms.
Even as digital tools were employed to monitor, coordinate and manage the public health crisis amid the pandemic, the report said, “Digitisation is not a panacea.”
If used wisely, the report said, digitisation will be critical in making countries more resilient to counter economic, social and environmental consequences of the pandemic.
It suggested that innovations in digital technologies can address the pre-existing vulnerabilities, especially filling the gaps in health and social protection systems and promoting good governance. It can also counteract the impacts of K-shaped recovery, growing divergence between and within countries and an increase in poverty and polarisation, the report added.
Explosion of e-commerce platforms and digital payments solutions during the pandemic has enabled many businesses not only to survive but also pivot their operations to online platforms to thrive.
Online learning also allowed students to continue their studies during lockdown.
“The use of digital technologies cushioned some of the impact of the pandemic lockdowns. However, the full potential of cooperation on digitisation is yet to be realised.
“Moreover, big digital divides within and between countries have meant that often, only people with access to digital technologies benefited from the accelerated digitisation,” the report noted.
Further, the report added that the Asia-Pacific region is already off-track to meeting its sustainable development goals (SDGs), the pandemic has been a massive setback to achieving the SDGs by 2030.
It has caused social and economic devastation across the region, destroyed tens of millions of jobs and livelihoods and will reverse much of the region’s progress in reducing poverty and ending hunger, besides affecting the health and education prospects, it said.
The report has suggested the countries in the region to design policies that ensure that no one, and no country, is left behind.
It also stressed on strengthening regional cooperation for the Agenda 2030 after COVID-19.
“Now is an opportune time to reflect on the vital role of regional cooperation in managing the transition out of the crisis,” said the report.
The Economic and Social Commission for Asia and the Pacific (ESCAP), one of the five regional commissions of the United Nations, promotes cooperation among the 53 members and 9 associate members in Asia-Pacific.
The Asian Development Bank (ADB) is owned by 68 members, 49 from the region, that works towards development and resilient economies through policy dialogue, loans, equity, investments and grants, among others.
The United Nations Development Programme (UNDP) is the leading organisation of the UN fighting to end poverty, inequality and climate change.
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