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Survey 2021 Towards Post-COVID-19 Resilient Economies

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Survey 2021 Towards Post-COVID-19 Resilient Economies ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 Towards post-COVID-19 resilient economies The shaded areas of the map indicate ESCAP members and associate members.* The Economic and Social Commission for Asia and the Pacific (ESCAP) is the most inclusive intergovernmental platform in the Asia-Pacific region. The Commission promotes cooperation among its 53 member States and 9 associate members in pursuit of solutions to sustainable development challenges. ESCAP is one of the five regional commissions of the United Nations. The ESCAP secretariat supports inclusive, resilient and sustainable development in the region by generating action-oriented knowledge, and by providing technical assistance and capacity-building services in support of national development objectives, regional agreements and the implementation of the 2030 Agenda for Sustainable Development. *The designations employed and the presentation of material on this map do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 Towards post-COVID-19 resilient economies ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 Towards post-COVID-19 resilient economies United Nations publication Sales No. E.21.II.F.5 Copyright © United Nations 2021 All rights reserved Printed in Bangkok ISBN: 978-92-1-120823-8 e-ISBN: 978-92-1-604057-4 ISSN: 0252-5704 eISSN: 2412-0979 ST/ESCAP/2942 Photo credits: Cover: Khlongwangchao/Shutterstock (396210598); Chapter 1: LoveTheWind/iStock (517044090); Chapter 2: Alphaspirit.it/ Shutterstock (1710401779); Chapter 3: Storyblocks; Chapter 4: VectorMine/Shutterstock (1535676170); Chapter 5: RomoloTavani/iStock (907280674); Chapter 6: Storyblocks. Mention of firm names and commercial products does not imply the endorsement of the United Nations. This publication may be reproduced in whole or in part for educational or non-profit purposes without special permission from the copyright holder, provided that the source is acknowledged. The ESCAP Publications Office would appreciate receiving a copy of any publication that uses this publication as a source. No use may be made of this publication for resale or any other commercial purpose whatsoever without prior permission. Applications for such permission, with a statement of the purpose and extent of reproduction, should be addressed to the Secretary of the Publications Board, United Nations, New York. ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 iii FOREWORD FOREWORD The COVID-19 pandemic has caused severe social and economic damage across the world, setting back development gains by years. Job losses, a sharp reversal of progress in poverty reduction, school closures and heightened inequalities will leave long-term scars. This year’s Economic and Social Survey of Asia and the Pacific finds that over the course of 2020, the developing Asia-Pacific region experienced a 1.0 per cent contraction in gross domestic product, and lost the equivalent of 140 million full- time jobs, pushing a further 89 million people back into extreme poverty. In dealing with these and other devastating impacts, policymakers have had to make tough decisions between saving lives and saving livelihoods. As we navigate our way out of this shock, the policy choices we make now should be green, just and sustainable in order to build long-term resilience and reduce the severity of future shocks. This calls for a transformation in macroeconomic policy thinking so that it is not defined by a narrow and short-sighted focus on economic growth alone. Towards that end, the Survey recommends a package of reforms and investments in social services, digital access, gender equality and green development aimed at tackling pre-crisis vulnerabilities and building a more inclusive and sustainable future. This will require greater upfront spending on social and environmental protection. The Survey therefore calls for increased international assistance to reduce the vulnerability and debt burden of developing countries, and offers options to meet immediate and medium-term financing needs. I commend the findings and policy recommendations of the Survey to all stakeholders and development partners in the region as Asia-Pacific countries António Guterres seize the opportunity created by this crisis to reignite the Decade of Action to Secretary-General of accelerate implementation of the 2030 Agenda for Sustainable Development. the United Nations iv ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 TOWARDS POST-COVID-19 RESILIENT ECONOMIES PREFACE The COVID-19 pandemic has posed unprecedented challenges for policymaking in Asia and the Pacific, setting back development gains by years, if not decades, and revealing the lack of preparedness of many countries for dealing with such shocks. Nonetheless, Asian and Pacific countries initiated substantial policy responses to cope with the severe social and economic effects of the crisis, although the ability to sustain such needed support would be a challenge for several countries. The Secretary-General also launched several initiatives to save lives, protect societies and help them recover better, and mobilized the entire United Nations system, including ESCAP, to assist Member States. One of the key lessons emerging from the crisis is that protecting development from shocks and building resilience should be a pressing priority for the region’s policymakers. Slow progress towards achieving the Sustainable Development Goals had already exposed existing vulnerabilities to crises. The need to rebuild better towards a more resilient, inclusive and sustainable future was highlighted by leading policymakers and eminent persons during the 2020 ESCAP Regional Conversation Series. The 2021 Economic and Social Survey of Asia and the Pacific provides our member States with timely analytical and policy perspectives on building resilient post-COVID-19 economies. The Survey maps out a “riskscape” of economic and non-economic shocks – financial crises, terms of trade shocks, natural disasters and epidemics – and finds that these leave behind long-lasting scars that reverse hard-won gains across all three dimensions of sustainable development. Highlighting the fact that policy choices matter, the Survey recommends that countries respond aggressively in order to minimize the reversal of hard-won gains rather than end up with “too little, too late”. In building further on these insights, the Survey proposes illustrative policy packages that are focused on aligning recovery with the 2030 Agenda for Sustainable Development in order to recover better together and protect development gains. Specifically, this package analyses three policy areas – social services, digital access and green development – and examines a range of policy options to meet immediate and medium-term financing needs for building such resilience. Governments are advised to focus on financing options that leverage Armida Salsiah Alisjahbana their strengths and are implementable in view of their institutional capacities. Under-Secretary-General of the United Nations and However, in several instances individual Governments will also need to engage Executive Secretary of ESCAP closely with international development partners as well as the private sector. COVID-19 is a shock like no other, and requires a response like no other. The time is now for the Asia-Pacific region to seize this opportunity to speed up and make its transition towards more resilient, equal and green development the centerpiece of the post-pandemic economic recovery. ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2021 v EXECUTIVE SUMMARY EXECUTIVE SUMMARY The COVID-19 pandemic has exposed chronic development fault lines in Asia and the Pacific, taking a heavy toll on the social and economic well-being of the region’s people. Slow regional progress in implementing the transformative 2030 Agenda for Sustainable Development has done little to reduce wide gaps in social services, digital access and green development, and that has exacerbated the vulnerability to such shocks. The pandemic caused unprecedented socioeconomic disruptions in Asia and the Pacific. Working- hour losses totalled the equivalent of 140 million full-time jobs in 2020, while prolonged school closures severely affected education. Taken together, these distortions are likely to have considerable adverse effects on human capital accumulation and productivity. The poor and vulnerable groups were disproportionately affected, resulting in a surge in poverty and a widening of inequality gaps. ESCAP estimates that an additional 89 million people in the region could have been pushed back into extreme poverty at the $1.90 per day threshold, erasing years of progress in poverty reduction. The haphazard and less-than-adequate response by Governments to such a shock highlights the urgency to rethink economic policymaking, which has so far been focused primarily on economic growth, neglecting critical investments in people and in building resilience. To this end, the Survey for 2021 takes stock of the socioeconomic fallout from the current pandemic and looks at past economic and non-economic shocks that have inflicted damage on the region’s sustainable development prospects in order to draw lessons on how to build forward better during the post-pandemic
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