The economic fallout from the coronavirus epidemic will prevent almost 24 million people from escaping poverty in East Asia and the Pacific (EAP) this year, according to the World Bank.
In a report, the Washington-based lender also warned of “substantially higher risk” among households that depend on
industries particularly vulnerable to the impact of Covid-19.
These include tourism in Thailand and the Pacific Islands; manufacturing in Vietnam and Cambodia; and among people dependent on “informal labour” in all countries.
The World Bank urged the region to invest in expanding conventional healthcare and medical equipment factories, as well as taking innovative measures like converting ordinary hospital beds for ICU use and rapidly training people to work in basic care. It also called for
“targeted fiscal measures” such as subsidies for sick pay that would help with containment and aid households.
“In addition to bold national actions, deeper international cooperation is the most effective vaccine against this virulent threat,” said Aaditya Mattoo, chief economist for East Asia and the Pacific at the World Bank.
“Countries in East Asian and the Pacific and elsewhere must fight this disease together, keep trade open and coordinate macroeconomic policy.”
The bank said such cooperation could include cross-border public-private partnerships to boost production and supply of medical supplies and services, and ensure financial stability in the aftermath of the virus.
“Critically, trade policy should stay open so medical and other supplies are available to all countries, as well as to facilitate the region’s rapid economic recovery,” it said.
The report noted that the pandemic struck just as the region was recovering from the impact of the US-China trade war.
Another recommendation made in the report is easing credit to help households smooth their consumption and help firms survive the immediate shock.
Yet the bank urged close monitoring of such programmes.