Pandemic pushed 4.7 mn more people into extreme poverty in SE Asia

The Covid-19 pandemic pushed 4.7 million people in Southeast Asia into extreme poverty in 2021, according to a new Asian Development Bank (ADB) report.
Before the pandemic, the number of people who lived on less than US$1.90 a day had been on the decline in Southeast Asia.
The Omicron wave of Covid-19 could cut the region’s economic growth by as much as 0.8 percentage points in 2022, said the ADB report, “Southeast Asia: Rising from the Pandemic”, which was presented at the Southeast Asia Development Symposium.
“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 and 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.”
Prior to the pandemic, Laos was making steady progress in diversifying its services sector by attracting large numbers of tourists for business and leisure, as well as increasing the use of technology across its population, according to the ADB.
The outbreak severely affected the Lao economy, particularly tourism, which was hindered by the closure of international borders and policies to suppress the spread of the virus.
Two years after the pandemic began, the report says growth prospects are brighter for economies with widespread technology adoption, resilient merchandise exports, or rich natural resources.
The report notes an economic recovery across the region, with most countries seeing visits to retail and recreational areas rising by 161 percent in the two-year period ending February 16, 2022.
Still, the region faces global headwinds, including emerging Covid-19 variants, the tightening of global interest rates, supply chain disruptions, higher commodity prices and inflation.
With 59 percent of the region’s population fully vaccinated as of February 21, 2022, the report called on Southeast Asian governments to allocate more resources to help health systems deliver care, improve disease surveillance, and respond to future pandemics.
Health investments can boost economic growth by increasing labour participation and productivity. For example, Southeast Asia’s economic growth could rise 1.5 percentage points if health spending in the region reaches about 5 percent of GDP, compared with 3.0 percent in 2021, the report said.
The report recommended that countries pursue structural reforms to boost competitiveness and productivity. This can include simplifying business procedures, reducing trade barriers, and encouraging small enterprises to adopt new technologies.
This can also include skills training to help workers address widespread disruptions to the labour market and the relocation of jobs across sectors. Governments should maintain fiscal prudence to reduce public deficits and debts and modernise tax administration to enhance efficiency and broaden the tax base.

By Times Reporters
(Latest Update March 17, 2022)