With each passing day, the realization is growing that it will “years” not months or quarters before the normalcy returns to the global economy. Regardless of the statistics on global trade, national income and corporate earnings, the impact of pandemic on humanity, especially poverty, inequality, and suppression is overwhelmingly devastating. The pandemic has indubitably undone the decades of efforts in poverty alleviation and public health in numerous developing and underdeveloped countries.
As per a recent Bloomberg report based on a study conducted by
the World Bank and Philippine’s local agencies, “almost half of shuttered
businesses were unsure when they could reopen”. As per the report, “in emerging
parts of Southeast Asia, where a wave of job losses and weak social safety nets
mean millions are at risk of losing their rung on the social mobility ladder.
The region is likely to come in second behind the Indian subcontinent in
charting the number of new poor in Asia this year.” This points to a long,
drawn-out recovery. Southeast Asia’s GDP is estimated to be to be 2% below the
pre-Covid baseline even in 2022.
As per last year’s projections, South Asia was expected to add
more than 50million people with $300bn in disposable income to middle class
strata. This attracted many global corporations to invest huge amounts in
building capacities in this region. With the poverty levels rising and
prospects of growth acceleration fading, the viability of these capacities is
now questionable.
As per the Bloomberg report, “As many as 347.4 million people in
Asia-Pacific could fall below the $5.5 a day poverty line because of the
pandemic, according to the United Nations University World Institute for
Development Economics Research. That’s about two-thirds of its worst-case
global estimate, and underscores the World Bank’s forecast of the first net
increase in worldwide poverty in more than two decades.”
As per HSBC research, The magnitude of the economic free fall in
Southeast Asia’s five biggest economies was severe in the second quarter.
Indonesia shrank 5.3% year-on-year, Malaysia 17.1%, Philippines 16.5%,
Singapore 13.3% and Thailand 12.2%, data compiled by Bloomberg show. Vietnam,
which was among the few trade-war winners, will see its three-decade economic
ascent grind to a near halt this year. Contractions could persist through early
next year.” That’s signalling a prolonged financial squeeze for Southeast
Asians.
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