Covid-19 health crisis main driver of poverty, unemployment in Southeast Asia
The Covid-19 pandemic – or, as some say, rather government-imposed restrictions in response to it – has increased poverty and dealt a blow to the labour market in Southeast Asia, according to a new report by the Asian Development Bank (ADB) published on March 16.
The report Southeast Asia – Rising From The Pandemic found that the pandemic last year alone pushed 4.7 million more people in the region into extreme poverty — which is defined as living on less than $1.90 per day — and erased 9.3 million jobs.
Inequality also widened as movement restrictions particularly hit the retail and informal sectors, where women, young people and unskilled workers are typically employed.
“Deterioration of inequality”
“The pandemic’s impact on poverty and unemployment will likely persist as inactive workers become de-skilled and poor people’s access to opportunities further deteriorates,” the ADB said.
“When this happens, the deterioration in inequality could transfer across generations,” it added.
Many countries in Southeast Asia have lost their hard-won economic and development gains as they continue to struggle with the spread of the Omicron variant of the Covid-19 virus. Though the ADB expects an overall regional economic growth of 5.1 per cent in 2022 as higher vaccination rates – close to 60 per cent of Southeast Asia’s population have received their jabs – prompt economies to reopen, it warned that the new variant could cut growth by as much as 0.8 per cent.
The countries with the highest number of reported Covid-19 cases in the region since the pandemic began are Vietnam with 6.55 million, Indonesia with 5.91 million and Malaysia with 3.87 million.
Cautious optimistic outlook, including for tourism
However, the ADB is optimistic that Southeast Asian economies will recover steadily as the region is “broadly in good economic health.”
A particular important sector, tourism, should gradually pick up as borders begin to open, providing more opportunities for economic growth and jobs even though the Ukraine crisis is a setback for countries reliant on Russian tourists such as Vietnam and partly Thailand.
Thus, there is still a longer way to go. Although overall international tourist arrivals increased by 58 per cent in July to September 2021 compared with the same period in 2020, they remained 64 per cent below 2019 levels, the ADB report stated.
“At present, tourism related goods and services including transport, accommodation, recreation and other personal services will likely remain weak while travel remains curtailed and social distancing is still being enforced,” the ADB said.
Digital tools for displaced workers and healthcare investment
To expedite the region’s economic recovery, the ADB urged governments to put in place supporting measures such as equipping small businesses with digital tools and providing skills training for displaced workers to ensure they are not left behind in the “new normal” of work which includes home working and computer-based communication.
The Manila-based development bank also recommended that governments of developing countries in the region increase healthcare spending to five per cent of GDP from an overall average of three per cent in 2021, which would not only increase the overall healthcare capacity and reduce inequality in the sector, but also improve the ability to react to future pandemics and eventually add 1.5 percentage points to Southeast Asia’s economic growth, the ADB reckons.
[caption id="attachment_38319" align="alignleft" width="300"] Thailand has been hit hard by the absence of tourists for two years[/caption] The Covid-19 pandemic – or, as some say, rather government-imposed restrictions in response to it – has increased poverty and dealt a blow to the labour market in Southeast Asia, according to a new report by the Asian Development Bank (ADB) published on March 16. The report Southeast Asia - Rising From The Pandemic found that the pandemic last year alone pushed 4.7 million more people in the region into extreme poverty — which is defined as living on less than $1.90 per...
The Covid-19 pandemic – or, as some say, rather government-imposed restrictions in response to it – has increased poverty and dealt a blow to the labour market in Southeast Asia, according to a new report by the Asian Development Bank (ADB) published on March 16.
The report Southeast Asia – Rising From The Pandemic found that the pandemic last year alone pushed 4.7 million more people in the region into extreme poverty — which is defined as living on less than $1.90 per day — and erased 9.3 million jobs.
Inequality also widened as movement restrictions particularly hit the retail and informal sectors, where women, young people and unskilled workers are typically employed.
“Deterioration of inequality”
“The pandemic’s impact on poverty and unemployment will likely persist as inactive workers become de-skilled and poor people’s access to opportunities further deteriorates,” the ADB said.
“When this happens, the deterioration in inequality could transfer across generations,” it added.
Many countries in Southeast Asia have lost their hard-won economic and development gains as they continue to struggle with the spread of the Omicron variant of the Covid-19 virus. Though the ADB expects an overall regional economic growth of 5.1 per cent in 2022 as higher vaccination rates – close to 60 per cent of Southeast Asia’s population have received their jabs – prompt economies to reopen, it warned that the new variant could cut growth by as much as 0.8 per cent.
The countries with the highest number of reported Covid-19 cases in the region since the pandemic began are Vietnam with 6.55 million, Indonesia with 5.91 million and Malaysia with 3.87 million.
Cautious optimistic outlook, including for tourism
However, the ADB is optimistic that Southeast Asian economies will recover steadily as the region is “broadly in good economic health.”
A particular important sector, tourism, should gradually pick up as borders begin to open, providing more opportunities for economic growth and jobs even though the Ukraine crisis is a setback for countries reliant on Russian tourists such as Vietnam and partly Thailand.
Thus, there is still a longer way to go. Although overall international tourist arrivals increased by 58 per cent in July to September 2021 compared with the same period in 2020, they remained 64 per cent below 2019 levels, the ADB report stated.
“At present, tourism related goods and services including transport, accommodation, recreation and other personal services will likely remain weak while travel remains curtailed and social distancing is still being enforced,” the ADB said.
Digital tools for displaced workers and healthcare investment
To expedite the region’s economic recovery, the ADB urged governments to put in place supporting measures such as equipping small businesses with digital tools and providing skills training for displaced workers to ensure they are not left behind in the “new normal” of work which includes home working and computer-based communication.
The Manila-based development bank also recommended that governments of developing countries in the region increase healthcare spending to five per cent of GDP from an overall average of three per cent in 2021, which would not only increase the overall healthcare capacity and reduce inequality in the sector, but also improve the ability to react to future pandemics and eventually add 1.5 percentage points to Southeast Asia’s economic growth, the ADB reckons.
