World Bank: 24 million people in East Asia and Pacific are unlikely to escape poverty this year
On September 28, the World Bank (WB) released the East Asia and Pacific Economic Situation Update for Fall 2021.
|20% of the approximately 109 million Filipinos have been fully immunized against COVID-9. Photo: Reuters/VNA|
Accordingly, the report notes that the recovery process of East Asia and the Pacific region is affected by the spread of the Delta variant of the COVID-19 epidemic, making it difficult for businesses and households. prolonged, potentially slowing economic growth and increasing inequality in society.
Economic activities began to slow down in the second quarter of 2021 and growth forecasts for this year in most countries in the region were also affected and lowered. Although China is forecast to grow at the expected 8.5% rate, the rest of the region is likely to grow more slowly, at 2.5% instead of the expected growth rate. 4.4%.
While the output of China, Indonesia and Vietnam has exceeded pre-pandemic levels, the output of Cambodia, Malaysia… can only fully recover and exceed pre-pandemic levels by 2022; while Myanmar, the Philippines, Thailand and some Pacific island nations still maintain production levels below pre-pandemic levels and even extend this situation until 2023.
Employment rates and labor force participation rates in East Asia and the Pacific are also down. Thus, 24 million people will not be able to escape poverty this year.
Ms. Manuela Ferro, World Bank Vice President for East Asia and the Pacific, commented: “The economic recovery in developing countries in East Asia and the Pacific is being disrupted. reverse. Despite successfully containing the epidemic in 2020, while other regions of the world are facing many difficulties, the number of COVID-19 infections in East Asia and the Pacific has skyrocketed this year. dampens growth prospects for 2021. However, in previous crises, the region has made a stronger comeback. Hopefully this time it will be the same if the right policies are in place.”
Damage from a recent and prolonged COVID-19 outbreak could hurt growth and increase inequality in the long run, the World Bank report said. The collapse of inherently healthy businesses causes valuable intangible assets to be lost, while viable businesses have to suspend investments that bring material wealth. Although most businesses are in a difficult situation, the bigger the business, the less it will cut sales and still benefit from the adoption of advanced technologies and the support of Government.
Most of the households and people are affected; especially, the poorer the household, the more likely it is to lose income and fall into food insecurity, and children cannot continue their education; even have to sell off assets. Childhood stunting is on the rise; Human resources are eroded and income-generating assets are lost, affecting the future of those households. In fact, the increase in inequality between enterprises is also increasing inequality among workers.
According to Aaditya Mattoo, Chief Economist for East Asia and the Pacific, World Bank: “Accelerating vaccination and aggressive testing to control the spread of COVID-19 could be the way to go. struggling countries revive economic activity from the first half of 2022; at the same time, it is possible to double the growth rate in the next year. In the long run, only deepening reforms can prevent a slowdown in growth and a rise in inequality.”
The report estimates that most countries in the region, including Indonesia and the Philippines, could have vaccine coverage above 60% of the population by the first half of 2022. While infection cannot be eliminated, the measure could significantly reduce deaths, create conditions for economic activities to be restored. However, countries in the region still need to make efforts to seriously implement measures to limit the prolonged COVID-19 epidemic: address the fear of vaccination and limitations on distribution capacity to prevent the spread of the virus. Vaccine coverage is flat. Along with that, focus on testing, tracing and isolation for infection control; boost vaccine production in the region to reduce dependence on imported supplies; at the same time, strengthen the health system to handle the prolonged epidemic situation.
Recommendations for Vietnam along with developing countries in East Asia and the Pacific, the World Bank’s report emphasizes that, in addition to controlling the COVID-19 epidemic, the Government needs a comprehensive strategy for growth. both fast and guaranteed coverage. The increased use of technology could be the highlight of this crisis with the potential to increase productivity, democratize education, and improve the performance of state agencies. But besides that, there is still a need for reciprocal reforms and the business community needs to be equipped with skills to bring technology into production and business activities. At the same time, there is the need to open up trade and investment, combined with policies to promote competition to create motivation for businesses to apply new technologies…