- Developing Asia’s economic growth has contracted, and millions of jobs have been lost.
- The pandemic has made us see the urgent need for better social protection, critical support to small businesses, and quality education.
- Poverty reduction needs game-changing approaches that provide innovative, inclusive, and targeted solutions to the challenges presented by our new, post-pandemic development landscape.
ADB’s strategy 2030 will pursue the following:
- achieve better health for all
- improve education and training
- ensure social protection for everyone
- generate quality jobs
- increase opportunities for the most vulnerable
COVID-19 has eroded Asia’s hard-earned progress. Growth in 2019 may have been slow but it was robust—regional growth was at 5.4% in 2019. The pandemic changed all that. Latest ADB assessments show that the pandemic has now cost the world $4.8 trillion to $7.4 trillion, with an additional impact of $3.1 trillion to $5.4 trillion in 2021. Developing Asia bears about 28% of these losses. Even as vaccine rollouts scale up, hope for the future remains fragile.
ADB’s Operational Priority 1 aims to reduce poverty in all its forms in Asia and the Pacific. Guided by its agenda “to leave no one behind,” it aspires to help provide social protection to all, generate quality jobs, and increase the most vulnerable’s access to opportunities. Even amid the pandemic, ADB has continued to drive forward this agenda, with the support of its partners. In 2020, roughly 80% of all ADB’s cofinanced projects tackled poverty head-on. In addition, roughly 27% of all cofinanced projects and technical assistance under this operational priority directly responded to the pandemic.
Health for All
The health situation for most of Asia and the Pacific has been precarious in 2020. Data reveal that while East Asia has reined in the rise of COVID-19 cases with just over 200 new cases daily by December 2020, developing Asia still struggled with up to about 63,000 new cases daily around the same time frame. Shortfalls in vaccine supply threaten to aggravate this situation. Vaccine distribution has been inequitable to date, with the bulk of supply cornered by upper-and middle-income countries. Without enough vaccines to supply Asia’s needs for the next few months, many countries would have a tough time opening their economies.
Despite this, there were several gains from Asia’s pandemic experience. Many countries in the region have displayed strong political will and commitment, decisiveness, and flexibility. Viet Nam and its people have worked together to stop COVID-19 in its tracks. Through aggressive contract tracing, strategic COVID-19 testing, and an effective communication campaign, Viet Nam has managed to keep its cases down to 1,465 and 35 deaths as of December 2020. The Republic of Korea acted swiftly when it called on its leading biotech companies to develop COVID-19 testing kits as soon as the People’s Republic of China made the genome sequence available. Production swiftly started, which allowed the country to do mass testing. The Pacific island countries showed political will when they decisively closed their borders so no COVID-19 cases can get in, at the risk of their tourism industry. There was also a massive scale-up of nonpharmaceutical responses to COVID-19, such as masking, testing, tracing, and isolating. These actions have made health accessible to many people in Asia and have protected the vulnerable.
ADB and its partners have supported Asia and the Pacific in ensuring health for all. They cofinanced 12 health-related project in 2020, 7 of which were in response to COVID-19. One of their major undertakings in 2020 was a regional knowledge and technical assistance (KSTA) aiming to help developing members respond to the pandemic. This initiative, the Regional Support to Address the Outbreak of Coronavirus Disease 2019 and Potential Outbreaks of Other Communicable Diseases, aims to mitigate the outbreak’s long-term damage to economies and its adverse effects on people’s health. They also initiated another KSTA that helps civil society organizations, including community-based organizations and nongovernment organizations, to prepare for and respond to needs arising from the pandemic. Health-related cofinanced projects in 2020 also included emergency assistance projects in Pakistan and in Uzbekistan that helped both countries get immediate financing to strengthen their public health preparedness and responsiveness.
The Urgent Need for Social Protection
One of the most glaring gaps further widened by the pandemic is the inadequacy of social protection in many Asian countries. Social protection is critical as it reduces poverty and vulnerability by helping people cope with income shocks and adverse events. Based on the 2015 ADB Social Protection Indicator, the average social protection expenditure in 25 countries in Asia was 5.3% of aggregate GDP, and social protection covered only 55% of the intended beneficiaries, leaving nearly half of the intended beneficiaries without support.
The pandemic has shown us the bitter effects of this deficiency. Estimates suggest an additional 80–160 million people in the region will be pushed back into poverty, reversing much of the poverty reduction achieved in recent years.
ADB and its partners recognize the urgency of meeting people’s need for social protection. In 2020, 35 of its cofinanced projects aimed to reduce poverty directly addressed COVID-19 and its socioeconomic effects, providing emergency support and expenditure assistance. One of these projects specifically addressed social protection in Mongolia. It helped provide food stamps and cash grants to the nation’s most vulnerable. A regional project, the Strengthening Social Protection in the Pacific, was initiated by ADB and its partners to ensure sustainable support for those vulnerable to COVID-19 and other disaster-related shocks.
The Need for Quality Jobs
The pandemic has driven many Asian economies into recession, leading to historic unemployment rates. In the four quarters of 2020, total working hours in the Asia and Pacific region shrunk by 6.5%, 16.9%, 5.4%, and 2.8% respectively, equivalent to a loss of 140 million full-time jobs. It has also brought radical changes in the workplace—many jobs have been digitalized, while informal sector jobs were heavily displaced.
Strengthening Asia’s small enterprise sector can be an effective way to respond to Asia’s unemployment crisis. Small and medium-sized enterprises (SMEs) employ about 60% of Asia’s workforce. In 2020, six cofinanced projects directly addressed the needs of small enterprises. ADB’s partnership with Women Entrepreneurs Finance Initiative initiated a project in Viet Nam that helps women owners of SMEs gain access to much-needed finance that will help them revive and sustain their businesses hit hard by the pandemic. ADB’s financing partnership with the Japan Fund for Poverty Reduction produced three projects in 2020 that aimed to help small businesses to thrive. One was implemented in Sri Lanka to provide small businesses collateral support. Another was a pilot project in Mongolia that introduced a community farming model to improve the livelihoods of smallholders. The third aims to help Bhutan develop the capacity of its cottage and small industries to successfully operate in domestic and international markets.
While addressing the needs of the informal labor and small industries, ADB financing partnerships also assisted in the digitalization of the workplace. One technical assistance, in particular, implemented in Azerbaijan, aimed to support the country’s information and communication technology sector and digital transformation. The project, supported by the Republic of Korea e-Asia and Knowledge Partnership Fund, assists INNOLAND—an incubation, acceleration, and research center—to set up effective and efficient institutional arrangements at the local level to help create, develop, and promote startups that can provide innovative solutions in rural and non-rural production areas.
Access to Opportunities
The pandemic not only disrupted work and livelihoods, but it also disrupted children’s education and people’s access to much-needed services. Globally, approximately 80 countries have physically closed their schools at the national or local levels, affecting around 1.1 billion students. To ensure learning continuity, schools have opted to hold online or remote classes even while many students do not have the technology nor connectivity to participate. This shift can affect the employability of the youth, who face limited job prospects given their relative lack of experience and the challenging labor market aggravated by the pandemic-related disruptions.
Cognizant of the long-term impacts, ADB and its partners not only delivered projects that provided immediate relief and assistance to ease the socioeconomic impact of the pandemic among developing members, they also cofinanced initiatives that enhanced citizens’ skills and competitiveness and improved access to education. Twelve cofinanced projects in 2020 addressed education and skills enhancements. One of these addressed the educational needs of children with disabilities (CWD). This ongoing project strives to improve access to, and quality of, mainstream education for CWD in Mongolia by making selected mainstream schools and kindergartens accessible and inclusive. ADB and its partners also worked on projects that upgrade workers’ employability, such as ADB’s initiative with the Japan Fund for Information and Communication Technology in Tajikistan. This project aims to help the country increase the chances of people being employed through the establishment of exemplary job centers.
The Way Ahead
Reducing poverty in all its forms across Asia and the Pacific requires innovative approaches. The pandemic has forced us to confront new development landscape while long-term systemic issues have been exacerbated by the pandemic. Inequalities in access to education and health have been heightened in stark relief. Poverty is deeper, opportunity is more uneven, and unemployment is steeper.
The effects of the pandemic illustrate the need for better quality education and access to appropriate technology for remote learning. The professional development of teachers, including using education technology, should be strengthened. The sudden shift in the labor market to embrace greater technology, coupled with the short shelf life of skills and the rapid change in technology, also shows the need for work-based learning in partnership with the private sector. Without the universal provision of quality education and the application of appropriate skills, efforts to address endemic poverty will fail.
The pandemic has demonstrated, too, that countries with more advanced social protection systems were able to support marginalized and vulnerable populations more effectively. The impact of pandemic support programs has shown that social protection is indeed vital; the need to develop better social protection systems and programs across the region equally so. With the expansion of job opportunities and the acquisition of more relevant skills, those pushed into poverty will have much greater chances of a swift and sustainable recovery.
The pandemic may have eroded economic and social progress across the Asia and Pacific region, but it has also allowed ADB to plan and implement a recovery that is green, resilient, and inclusive. It is an opportunity to ensure that no one gets left behind. The partnerships created in 2020 to fight the pandemic serve as a springboard to build back better together.