Economic and Social Survey of Asia and the Pacific 2021 ......Economic and Social Survey of Asia and...
Transcript of Economic and Social Survey of Asia and the Pacific 2021 ......Economic and Social Survey of Asia and...
Economic and Social Survey of Asia and the Pacific 2021
Towards post-COVID-19 resilient economies
East and North-East Asia Policy Dialogue
19 April 2021
Main messages
• The socio-economic impact of the COVID-19 pandemic was amplified by lack of resilience and investments in people and the planet.
• Continuity in policy support is a must and recovery packages should focus on building resilience and investing in the 2030 Agenda.
• To deal with various economic and non-economic shocks, a more integrated risk management approach to planning and policymaking is needed.
• We propose a "Building Forward Better" policy package that calls for investments in social services, digital access and green development.
• To implement the BFB package, countries would need to build fiscal spaceand explore a range of financing options.
The present: COVID-19 is a stark reminder that
health emergencies cause not only social
damage but also entail economic risks
5.75.9
5.3
4.2
-1.0
2016 2017 2018 2019 2020 2021 2022
Asia-Pacific region experienced its worst economic performancein recent history...
GDP growth (%) in developing Asia and the Pacific
… with significant socio-economic costs.
Source: ESCAP based on ILO (2021) and WB data
89
158
172
0
20
40
60
80
100
120
140
160
180
200
Post-pandemic increase 2020
$1.90 per day
$3.20 per day
$5.50 per day
Post-Pandemic increase in poverty
(Asia-Pacific, millions of persons)Equivalent number of full-time jobs lost in 2020
(millions of jobs, 48 hours/week)
140
35
24
80
10
20
40
60
80
100
120
140
160
Asia-Pacific East Asia South-East
Asia
South Asia Pacific
5.75.9
5.3
4.2
-1.0
5.9
5.0
2016 2017 2018 2019 2020 2021 2022
Given considerable uncertainty, economic outlook is cautiously optimistic for 2021-22
GDP growth (%) in developing Asia and the Pacific
Less sharp GDP deceleration in East and North-East Asia…
GDP growth (%) in East and North-East Asia subregion
6.16.3
6.0
5.4
1.6
6.8
5.4
2016 2017 2018 2019 2020 2021 2022
…with smaller poverty increase in East and North-East Asia
Post-Pandemic increase in poverty
(millions of persons)
0.3
2.8
15.3
0
2
4
6
8
10
12
14
16
18$1.9-per-day
$3.2-per-day
$5.5-per-day
▪ Some aspects of the COVID-19 impact
are temporary
▪ Vaccine rollouts have begun
▪ Fiscal and monetary policies are expected
to remain accommodative
▪ Strong export & regional value chains
▪ Major economies worldwide are gradually
recovering
Near-term optimism is supported by multiple factors…
▪ Slow progress & uncertainties in vaccination
▪ International tourism remains subdued
▪ Debt distress is on the rise
▪ Long-lasting impacts on productivity
▪ Capital flow uncertainties & risk of
stagflation
▪ Lingering trade tensions
...but risks are tilted to the downside...
21
22
23
24
25
26
27
28
2017 2018 2019 2020 2021 2022
…with expected permanent losses in output...
Source: ESCAP estimation
Economic output trend in Asia-Pacific
developing countries (trillion US$)
Previous trend
2020-2022
Forecast
Cumulative output loss
2020-22: $2.6 trillion
...and a likely “K-shaped” recovery in the region
Near-term policy priorities
➢ Put pandemic control first
➢ Prioritize inclusiveness for a robust recovery
➢ Ensure continuity in fiscal & monetary support
The past: Learning from Past Crises and
Recoveries to Build Resilience
Asia-Pacific faces a wide risk landscape...
Asia-Pacific Risk Landscape Selected Countries
0
20
40
60
80
100
120
140
1960s-1970s 1980s-1990s 2000-present
Nu
mb
er o
f ad
ver
se e
ven
ts
Financial crises Terms-of-trade shocks
Natural disasters Pandemics
0 5 10 15
Mongolia
Tajikistan
China
Indonesia
Turkey
Bangladesh
Fiji
Iran, Islamic Republic of
Viet Nam
Philippines
Number of adverse events
Systemic banking crises Currency crises
Sovereign debt crises Climate-related disasters
Geophysical disasters Pandemics
...where adverse shocks leave long-term scars.
-35
-30
-25
-20
-15
-10
-5
0
5
10
-1 0 1 2 3 4 5
Per
centa
ge
Year
Investment slowdown from
financial crises
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
-1 0 1 2 3 4 5
Year
Increased inequality from
pandemics
-1.4
-1.2
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
-1 0 1 2 3 4 5
Year
Environmental damage from
natural disasters
However, policy choices can reduce such setback!
Adverse
shocks
Policy
choices
Economic policies
Fiscal policy
Monetary and financial measures
Reserves and exchange rate regime
External financing
Structural factors
Health and social protection system
Infrastructure quality
Economic diversification
Governance and institutions
Pandemics have a more severe economic and social impact...
-6
-4
-2
0
-1 0 1 2 3 4 5
Per
centa
ge
Year
GDP per capita impact of
pandemics
High public health spending
-6
-4
-2
0
2
4
-1 0 1 2 3 4 5
Year
Consumption impact of
pandemics
Formal work arrangements
-0.3
-0.2
-0.1
0
0.1
-1 0 1 2 3 4 5
Year
Human capital impact of
pandemics
High-quality infrastructure
… in countries with pre-existing structural vulnerabilities
-6
-4
-2
0
-1 0 1 2 3 4 5
Per
centa
ge
Year
GDP per capita impact of
pandemics
High public health spending
Low public health spending
-6
-4
-2
0
2
4
-1 0 1 2 3 4 5
Year
Consumption impact of
pandemics
Formal work arrangements
Widespread vulnerable employment
-0.3
-0.2
-0.1
0
0.1
-1 0 1 2 3 4 5
Year
Human capital impact of
pandemics
High-quality infrastructure
Low-quality infrastructure
Lesson learned – 1: Respond strongly & swiftly to shocks to safeguard sustainable development
0
1
2
3
4
5
6
Financial
crises
Natural
disasters
Epidemics
Per
centa
ge
po
ints
GDP per capita
0.0
0.5
1.0
1.5
Financial
crises
Natural
disasters
Epidemics
Human capital
0
1
2
3
Financial
crises
Natural
disasters
Epidemics
Environmental performance
Difference in 5-year cumulative impact between countries with and without supportive policies
Lesson learned – 2: Integrate risk management into national development planning and policymaking
Insurance
Pre
pa
rin
g f
or
cris
is
Climate-
resilient
infrastructure
Deploying
fiscal space
Financial
regulation
Coping with crisis
Early
warning
system
Adaptive
social
protection
Remittances
and ODA
Crisis preparation and coping strategies
-10123
Sovereign Credit Rating Index Exchange Rate Flexibility Index Social protection spending(Percentage of GDP)
InfrastructureQuality Index
EconomicComplexity Index
Least developed countries Other developing countries OECD countries
0
2
4
6
8
10
12
14
16
18
20
Sovereign Credit
Rating Index
0
2
4
6
8
10
12
14
Exchange Rate
Flexibility Index
0
1
2
3
4
5
6
7
8
Social protection
spending
(Percentage of GDP)
0
1
2
3
4
5
6
Infrastructure
Quality Index
-0.8
-0.4
0
0.4
0.8
1.2
Economic
Complexity Index
Lesson learned – 3: Strengthen the resilience of least developed and other vulnerable countries
The Future: Build Forward Better to enhance the resilience of people and the planet
The recovery packages leave room to integrate social and
environmental issues
Most recovery policies are not
gender-sensitive:
Most public fund commitments
neglect green energies
Fiscal support for businesses
Social Protection
Labour market
14%
11%
9%
Note: Data shows shares of 10 countries covered by
the energypolicytracker
3%
51%
27%
Clean unconditional
Clean conditional
Fossil
19% Other energy
We propose a “Building Forward Better ” policy package...
…which brings social & environmental benefits…
-180
-150
-120
-90
-60
-30
0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Mil
lion p
erso
ns
-0.9
-0.6
-0.3
0.0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Aver
age
chan
ge
Number of poor people Gini coefficient
-30
-25
-20
-15
-10
-5
0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Per
centa
ge
chan
ge
Carbon emissions
-60
-50
-40
-30
-20
-10
0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Per
centa
ge
chan
ge
Air quality (PM2.5)
Ambitious Spending Business-as-usual spending
... but with more pressure on public debt
Developing Asia-Pacific
Go
ver
nm
ent
deb
t-to
-GD
P r
atio
(%
)
Baseline
BFB
BFB and
COVID-19
50
55
60
65
70
75
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
...but with more pressure on public debt, especially in
Asia-Pacific LDCs
Developing Asia-Pacific Asia-Pacific LDCs
Go
ver
nm
ent
deb
t-to
-GD
P r
atio
(%
)
Baseline
BFB
BFB and
COVID-19
50
55
60
65
70
75
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Baseline
BFB
BFB and
COVID-19
30
40
50
60
70
80
90
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
-60
-50
-40
-30
-20
-10
0
10
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Per
centa
ge
chan
ge
-30
-25
-20
-15
-10
-5
0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Per
centa
ge
chan
ge
Number of poor people Gini coefficient
Carbon emissions Air quality (PM2.5)
Social and environmental benefits: East and North-East Asia
-30
-25
-20
-15
-10
-5
0
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Mil
lions
per
sons
-0.09
-0.07
-0.05
-0.03
-0.01
0.01
0.03
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Aver
age
chan
ge
Ambitious Spending Business-as-usual spending
Public debt sustainability: East and North-East Asia
Go
ver
nm
ent
deb
t-to
-GD
P r
atio
(%
)
BaselineBFB
BFB and
COVID-19
90
95
100
105
110
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Which fiscal and financing policies can help?
Policy options to address fiscal and financing challenges in less developed countries
Actively engage in debt relief initiatives
Make debt swaps for development meaningful
Explore diaspora bonds, offshore public bonds
Incorporate catastrophic risks into fiscal planning
Policy options to address fiscal and financing challenges in emerging economies
Grant debt restructuring
Ensure medium-term debt management strategies
Explore more catastrophe insurances + bonds
Ease investment rules for pension + sovereign wealth funds
Key takeaways
• Despite a cautiously optimistic outlook, there is a risk of a K-shaped recovery – policymakers should prioritize inclusiveness for a robust recovery.
• Policymakers should assess the wider risk landscape and focus on “reducing setbacks” as well as “accelerating progress” on sustainable development.
• COVID-19 presents an opportunity to build forward better – recovery policy packages should adequately focus on social services, digital access, and climate action.
Please visit
https://www.unescap.org/kp/2021/economic-and
-social-survey-asia-and-pacific-2021-towards-p
ost-covid-19-resilient-economies
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