JAKARTA, KalderaNews.com – Covid-19 has delivered a triple shock to the developing East Asia and Pacific (EAP) region: the pandemic itself, the economic impact of containment measures, and reverberations from the global recession brought on by the crisis.
Swift action will be needed to ensure that the pandemic does not hamper growth and increase poverty for years to come, according to From Containment to Recovery, the World Bank’s October 2020 Economic Update for East Asia and the Pacific.
Poverty in the region is projected to increase for the first time in 20 years: as many as 38 million people are expected to remain in, or be pushed back into, poverty as a result of the pandemic (based on the upper-middle income poverty line of $5.50 a day).
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“Covid-19 is not only hitting the poor the hardest, it is creating ‘new poor.’ The region is confronted with an unprecedented set of challenges, and governments are facing tough choices,” said Victoria Kwakwa, Vice President for East Asia and the Pacific at the World Bank.
“But there are smart policy options available that can soften these tradeoffs – such as investing in testing and tracing capacity and durably expanding social protection to cover the poor and the informal sector.”
The report warns that without action on multiple fronts, the pandemic could reduce regional growth over the next decade by 1 percentage point per year, with the greatest impacts being felt by poor households, because of lower levels of access to healthcare, education, jobs, and finance.
School closures due to Covid-19 could result in a loss of 0.7 learning-adjusted years of schooling in EAP countries, according to analysis in the report. As a result, the average student in the region could face a reduction of 4 percent in expected earnings every year of their working lives.
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