According to a new Asian Development Bank (ADB) analysis given at the Southeast Asia Development Symposium, the coronavirus disease (COVID-19) pandemic pushed 4.7 million people in Southeast Asia into extreme poverty in 2021, with 9.3 million jobs lost, compared to a baseline no-COVID scenario (SEADS).
According to the report Southeast Asia Rising from the Pandemic, the Omicron wave might reduce the region’s economic growth by as much as 0.8 percentage points by 2022. In 2022, the region’s economic production is predicted to be more than 10% lower than in the baseline no-COVID scenario. Unskilled workers, those in retail and the informal economy, as well as small enterprises without a digital presence, are among the most affected.
“The pandemic has led to widespread unemployment, worsening inequality, and rising poverty levels, especially among women, younger workers, and the elderly in Southeast Asia,” said ADB President Masatsugu Asakawa. “ADB will continue to work with policymakers as they seek to rebuild, improve national health systems, and streamline domestic regulations to strengthen business competitiveness. We encourage Southeast Asian governments to invest in smart, green infrastructure and adopt technological innovations to reinvigorate economic growth.”
The paper claims that economies with widespread technology adoption, resilient merchandise exports, or abundant natural resources had better development prospects two years after the pandemic began. It says that the region is recovering economically, with trips to retail and leisure sectors in most countries increasing by 161 percent in the two years ending February 16, 2022. Global headwinds, such as developing COVID-19 variations, global interest rate tightening, supply chain disruptions, and increasing commodity costs and inflation, continue to affect the region.
The research urges Southeast Asian governments to invest more resources to enable health systems to administer care, increase disease surveillance, and respond to future pandemics, with 59 percent of the region’s population fully vaccinated as of February 21, 2022. By raising labor participation and productivity, health investments can help enhance economic growth. According to the analysis, Southeast Asia’s economic development might increase by 1.5 percentage points if health spending in the region hits roughly 5.0 percent of GDP, up from 3.0 percent in 2021.
Countries should undertake structural reforms to improve their competitiveness and productivity, according to the research. Simplifying company procedures, lowering trade barriers, and encouraging small businesses to use new technologies are all examples of this. It may also include skills training to assist workers in dealing with extensive labor market disruptions and job transfer across sectors. Governments should exercise fiscal restraint in order to minimize public debt and deficits, as well as modernize tax administration in order to improve efficiency and increase the revenue base.
SEADS, the Asian Development Bank’s premier knowledge event in Southeast Asia, brings together experts from government, industry, academia, and other sectors to discuss innovative solutions to pressing development concerns like climate change and technological development. The theme of this year’s conference is “Sustainable Solutions for Southeast Asia’s Recovery,” and it will look at how the area can speed up recovery from the COVID-19 pandemic by solving supply chain bottlenecks, revitalizing tourism, and driving digital transformation. Around 5,000 people are anticipated to attend this year’s two-day virtual event.
The Asian Development Bank is dedicated to establishing a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while continuing to fight extreme poverty. It was founded in 1966 and is owned by 68 members, 49 of them are from the region.