By Kalinga Seneviratne
SYDNEY (IDN) — A new report released by the Manila-based Asian Development Bank (ADB) says that an estimated 75 to 80 million people in the developing regions of Asia have been pushed back into poverty last year threatening to derail the region’s progress towards achieving the Sustainable Development Goals (SDGs).
ADB argues that assuming the pandemic has increased inequality, the relative rise in extreme poverty—defined as living on less than $1.90 a day—may be even greater. Progress has also stalled in areas such as hunger, health, and education, where earlier achievements across the region had been significant, albeit uneven.
When the Millennium Development Goals (MDGs) concluded in 2015, Asia and the Pacific registered an impressive development scorecard. The region managed to cut the poverty rate by more than two-thirds, exceeding the initial MDG target of halving poverty between 1990 and 2015. From 1.5 billion Asians living on less than $1.90 a day in 1990, this number dropped to 1.2 billion in 1999 and further down to 273 million when the MDGs concluded in 2015.
According to the ADB report, about 203 million people or 5.2% of developing Asia’s population lived in extreme poverty as of 2017. Without COVID-19, that number would have declined to an estimated 2.6% in 2020. “Asia and the Pacific has made impressive strides, but COVID-19 has revealed social and economic fault lines that may weaken the region’s sustainable and inclusive development,” says ADB’s Chief Economist Yasuyuki Sawada.
Only 1 in 4 countries in the Asia-Pacific region has recorded economic growth last year. With economies in the region growing rapidly in the past 2 decades, the region was 35 percent of the global gross domestic product (GDP) in 2019.
Containment measures to curb the spread of COVID-19—such as lockdowns and restrictions in mobility and social interaction—have had adverse socioeconomic impacts on various segments of the population. To learn more about the impacts on households and individuals, the Tokyo-based Asian Development Bank Institute (ADBI) administered surveys on households from select developing Asian economies this year.
About 13% of households reported increased income flows, but nearly 75% of surveyed households reported a decline in household incomes. Loss of household income can be attributed to temporary business closures during the pandemic, generating both unemployment and underemployment in both the formal and informal sectors. Restrictions on mobility, especially between rural and urban areas, can also hamper opportunities for migrant workers seeking nonfarm employment in urban areas during the farming off-season.
ADBI says that a higher proportion of people in less-developed economies are not covered by social protection programs, leaving them more vulnerable to hardships caused by prolonged economic disruptions.
The results of the survey show that people across developing Asia relied on various coping strategies to manage financial difficulties caused by the COVID-19 pandemic, but some of these strategies cause scarring effects in the long term and could be potentially costly.
Most (55%) of households covered by ADBI’s survey of developing Asia reported financial difficulties during the pandemic. Furthermore, more than 80% of households who experienced financial difficulty had to reduce consumption expenditure as a coping mechanism, and 50% resorted to drawdown cash and savings.
About one-third of surveyed households either borrowed from relatives or friends, deferred payments and debt reimbursements, or applied for social and/or government aid, while about 18% sold property or pawned possessions.
“Evidence from previous disasters show that some strategies commonly adopted by disadvantaged groups, such as decreasing food consumption and selling productive assets, can lead to lower accumulation of human and physical capital” notes ADB. “These coping mechanisms may potentially have long-term harmful or scarring effects.”
ADB argues that poor nutrition due to food poverty can impede cognitive development in children and make them less interested in going to school. Nutritional deficiencies during childhood are also associated with increased susceptibility to metabolic illnesses in adulthood. Loss of productive assets may drive households further into debt. Reliance on these coping mechanisms to compensate for income loss perpetuates the cycle of poverty and increases inequality.
Thus, the COVID-19 pandemic threatens to further impede the region’s progress in SDG 2 targets, especially in the prevalence of undernourishment. Prior to the COVID-19 pandemic, projections on the prevalence of undernourishment indicated that most subregions in Asia and the Pacific would show significant progress in reducing undernourishment by 2030. “The pandemic has caused both food demand and supply shocks, further magnifying food insecurity and malnutrition-related issues in developing Asian economies,” says ADB.
Another area where the Asia-Pacific region has been experiencing steady progress is SDG 3—health targets, particularly on maternal and child mortality. “Disruptions to health care systems caused by the COVID-19 pandemic could further slow the progress of SDG 3 targets or even reverse gains made,” notes ADB.
“In order to cater for COVID-19 crisis other health services like for communicable and noncommunicable diseases, mental health, maternal, newborn child, adolescent health, and nutrition and other services, such as malaria prevention or immunization, were severely disrupted as these were suspended by the respective governments.”
The COVID-19 pandemic has fast-tracked the use of digital technology across Asia and the Pacific, emphasizing its potential as a means of achieving SDG-related health targets.
For example, digital platforms were used in Viet Nam to inform citizens of proper health protocols and to raise funds for purchase of personal protective equipment for frontline workers. The Republic of Korea used global positioning system data and big data analytics to understand the spread of the virus and craft the appropriate public health response. Remote healthcare, or telemedicine, is increasingly being used in Southeast Asia to address the long queues in hospital emergency departments and to lessen the fear of getting infected.
Moving forward, digital technology is expected to play a vital role in post-pandemic recovery and achievement of health-related SDG targets. The same technological tools and innovations used to manage the pandemic can also be used to significantly enhance access to, and delivery of health services.
With the digital economy becoming a key indicator of growth during the Covid-19 pandemic, ADB has produced a special supplement analysing its possible role in the post-Covid-19 recovery. While the digital economy has been shown to make significant contributions to the GDP of various economies, another key characteristic of the digital economy is its potentially disruptive effects. The opportunities and drawbacks are discussed in detail with a lot of statistical data and graphs in the 158 page report.
“Governments across Asia and the Pacific need to increase investment, look for innovative data sources, and form strategic partnerships with a range of stakeholders to enhance data quality,” argues ADB. “Reliable and comprehensive data supports evidence-based policymaking that leads to better development outcomes.” [IDN-InDepthNews – 01 September 2021]
Photo: ADB data show the impact of Covid-19 on government finance in developing Asia. Source: ADB
*The full ADB report “Sustainable Development Goals: Trends and Tables’ can be downloaded from https://www.adb.org/sites/default/files/publication/720461/part1-sdgs.pdf
* The full ADB special supplement ‘CAPTURING THE DIGITAL ECONOMY A PROPOSED MEASUREMENT FRAMEWORK AND ITS APPLICATIONS’ can be downloaded from https://www.adb.org/sites/default/files/publication/722366/capturing-digital-economy-measurement-framework.pdf
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