For decades, East Asia and the Pacific experienced rapid economic growth and lifted millions out of poverty. And by 2020, some countries in the region were a model for keeping COVID-19 at bay. But now, as the prospects of a quick recovery from the global pandemic dwindle, the area risks losing ground.
COVID-19 continues to buffet countries, impacting business and livelihoods and subjecting communities to a roller-coaster of lockdowns and reopenings. Economic growth, reviving from 2020 lows, is highly uneven across countries and regions. And in some cases, the vaccination roll-out is progressing slowly, hindered by supply shortages and logistics constraints.
It shouldn't be like this. As I write this, concluding my first trip to Asia since the start of the pandemic, I am reminded of the remarkable capabilities and resilience of the region.
There are three clear opportunities for collaboration.
Some countries, including Indonesia, Thailand, and Vietnam, are already considering expanding their production capacity.
Increased coordination can allow for better matching of supply and demand and targeting where needs are greatest. And this spirit of collaboration can be extended beyond vaccines to other critical supplies, such as personal protective equipment, masks, and testing kits.
Efforts can also be made to enhance knowledge and information-sharing, focusing on best practices for prevention, testing, and tracing. Such cooperation is not unprecedented and may be based on existing regional mechanisms, such as the Southeast Asian Association.
Second, cooperation is also needed to revive the economy. Poverty has increased in East Asia and the Pacific since the beginning of 2020 as entire regions and industries, including tourism, are closed. Governments have increased fiscal stimulus and social security schemes, but these efforts have often fallen short as economies struggle to cope with the most recent waves of infections.
If countries in the region and globally could better coordinate their fiscal and monetary policies, the impact of their efforts would be greater than the sum of the individual parts – and for each to do more to share the burden by neighbors. Will be prepared.
Once it is safe to do so, countries may consider opening up travel bubbles, combined with proof of vaccination and testing requirements, to revive the tourism and hospitality industries. And once the recovery is complete, economies facing labor shortage may consider bringing back workers from neighboring countries while improving health and safety conditions to avoid any outbreak among these communities. can do
However, such jobs will depend on the revival of infrastructure investments. While public investment declined only marginally, private participation in infrastructure projects in East Asia, which was already lower than other regions, fell 75 percent in 2020 compared to 2019.
This could be driven by a regional push to tap pools of private capital and loans looking for green infrastructure investment opportunities with reasonable and safe returns and reducing supply chain costs, and improving efficiency. To enhance regional connectivity and logistics are improving.
Apart from the rigid infrastructure, the sector has tremendous potential for expanding efforts for nature-based solutions. These are actions to protect, sustainably manage, and restore natural and degraded ecosystems – such as forests, mangroves, and wetlands – providing climate, human well-being, and biodiversity benefits.
Third, regional integration can be further deepened. At the pandemic's start, there was much talk about the disruption of global value chains, as imports were disrupted and some countries faced shortages. Conversely, World Bank research shows that closer integration into global value chains reduced the vulnerability of East Asian economies during the pandemic and that the COVID-19 shock has deepened the region's trade integration. Have given.
The opportunity now is to build on this through reforms that open the protected goods and services sectors to domestic and international competition. With its structural trade and investment reforms, countries like Indonesia and the Philippines, which have increased tax incentives and are looking to liberalize retail and other sectors, are already leading the way.
If countries can move fast and cooperate in the supply and distribution of vaccines and other critical health supplies, on measures to revive the economy, and on policies to deepen the integration of the region For, much of the international trust lost during the pandemic can be restored. Life will be secure, and livelihood will be safe. And East Asia and the Pacific can maintain their rightful place as one of the world's most dynamic, innovative, and interconnected regions.
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