The region’s poor and working classes are bearing the brunt of the economic fallout from the latest wave of COVID-19. Long-term social protection schemes could help reduce impacts in the future.

By Zachary Frye

A surge in COVID-19 cases across much of Southeast Asia has hampered the region’s emerging economic recovery. Since the last wave of infections struck in mid-April, many ASEAN countries have seen a significant increase in the number of cases and deaths.

Thailand has seen its total number of confirmed cases drop from fewer 14,000 end of january at more 135,000 at the end of May.

Cambodia also saw a surge in April, leading to a three-week lockdown in the capital Phnom Penh that left many in trouble to access necessities like food.

The Philippines and Indonesia were the hardest hit in the region, each totaling more than 1,700,000 case since the start of 2020, leading to
strains on their health systems.

At least 3.4 million Filipinos remain out of work as the latest wave of the virus has led to a prolonged lockdown across much of the capital and surrounding provinces. Parts of the country have been in various states of confinement since March 2020 – one of the longest lockdowns in the world – although the latest restrictions in Manila have been relaxed May 14.

Although the unemployment rate in the Philippines has fallen from a high of 17.6% percent in April 2020 to 7.1% in March 2021, the country’s economic outlook is still among the bleakest in the region, especially for the lower classes. Its unemployment rate remains the worst among emerging economies in Asia, leaving a lot of little or no income opportunities.

For some families in Manila, economic disruption leads to dire circumstances. “Sometimes at night we have nothing to eat, we can only wait for the next day”, local resident and mother of nine Mona Liza Vito Told CNN Philippines in a recent interview.

According to a government investigation published in April, about 6 in 10 Filipinos experienced some form of food insecurity at the end of last year.

Virus outbreak cripples emerging economic recovery in Southeast Asia

Before the latest surge in COVID-19 cases, ASEAN economies generally benefited from reduced foreclosure measures: the region’s six largest economies all saw sustained increases in their GDP from lows in 2020 to the third quarter of last year.

The Philippines remain the slowest countries in the region to recover as their economy continued to grow. shrink in the first quarter of 2021.

Others are also going through prolonged uncertainties. After an economic contraction of 6.1% in 2020, Thailand is now facing reduced consumer confidence and consumption in the face of its most severe wave of the virus.

Prior to Thailand’s ‘third wave’, some expected pre-pandemic economic output to pick up by 2022. But forecasts for economic growth in Thailand were subsequently reduced by at least 0 , 3% during the year, according to some estimates 100 million baht (around 30 million USD) per month of potential losses.

In Cambodia, meanwhile, the Asian Development Bank expects positive economic growth throughout 2021, but warns that an uneven recovery will continue to put pressure on it. economic pressure on many households.

A World Bank report published in April says China and Vietnam are the only countries in Asia on track for rapid economic recovery, meaning a large portion of the region’s poor will continue to face levels of uncertainty economically important.

At the time of publication of the report, the World Bank’s Vice President for East Asia and the Pacific mentionned that the economic shock caused by the COVID-19 pandemic “has blocked poverty reduction and increased inequality”.

Data from the report indicates that 2020 was the first year in decades that poverty has stopped declining in the Asia-Pacific region. The report also claimed that some 32 million people in Asia who were on the verge of escaping poverty in 2020 were unable to do so due to the impacts of the virus.

Charities help bridge the gap left by inadequate government relief programs

Due to the increase in the number of cases, some governments are implementing new spending programs aimed at alleviating the economic suffering of the poor.

The Philippine House of Representatives past a bill that would implement a third tranche of virus relief payments, while the Thai cabinet recently approved a 700 billion baht (US $ 22.4 billion) loan to revitalize the economy.

In early May, the Thai government announced a extension of its distribution program aimed at proof 32.9 million Thais with an additional 2,000 baht (around 60 USD). The government also approved a budget to maintain a co-payment program for many Thais that pays half of general purchases up to 150 baht ($ 5) per day and an e-voucher scheme for middle-income earners.

However, fiscal concerns associated with government inefficiencies continue to hamper program effectiveness. Thailand’s public debt stands at 58.6% of GDP, just below the 60% threshold which some tax experts say is the limit for budgets to remain viable.

For the Philippines, the old payment systems known as Bayanihan 1 and 2 supported at least 18 million low-income Filipinos with payments of 8,000 pesos ($ 166) per month, but many are still in trouble to pay for basic necessities.

Filling the gaps, charities in the region are helping bring much-needed food and basic supplies to some of Southeast Asia’s poorest communities.

In Thailand, a charity called Help from the Bangkok community
organizes distributions of food and basic necessities in the low-income neighborhood of Khlong Toey, which has been hit by a group cases of the virus earlier in May.

Since the last wave of the virus, the organization has distributed daily care and donated 41,000 hot meals in May only.

In the Philippines, meanwhile, a Quezon City woman set up a small booth in mid-April that she dubbed the Maginhawa Community Pantry, with a sign saying “give what you can, take what you need”.

The pantry quickly became popular on social media. Inspired by the woman’s determination, Filipinos began sending donations from across the country and established over 400 copier hold.

Arguments for increased funding for social safety nets are growing

According to Anne Booth, an economist at SOAS University in London, the economic fallout from COVID-19 in Asia could have continuing consequences for poverty in the region.

It complaints that although much of the increase in poverty has been concentrated in urban areas, the virus has exposed glaring weaknesses in social services across the region that will impact poor people everywhere in the world. ‘to come up.

Economic protection programs have contributed to a sharp increase in poverty in ASEAN countries, but many citizens are still struggling to make ends meet. In Thailand, despite three phases of recovery plans worth more 63 billion US dollars a total of 1.5 million Thais fell poverty in 2020 – an increase of over 40%.

Although governments must take budgets into account when setting spending priorities, the case for increased social protection in the region is strong, especially as fragile economies begin to shift towards recovery.

For ESCAP, a branch of the United Nations focused on the Asia-Pacific region, permanent universal protection floors in Southeast Asia could help governments build resilience
future social and economic shocks such as those resulting from pandemics.

UNESCAP also argues that the increases in public spending needed to achieve these goals are large but affordable in the long term, and that sustained programs would help close the protection gaps that often affect the most vulnerable.

As vaccination Campaigns across the region are set to begin in earnest in the second half of 2021, with governments in a position to start hoping for more stable economic conditions. By focusing on long-term protection programs, policymakers could further mitigate the economic fallout from future crises.

In addition, the relief plan also includes the 67 billion baht extension of the ‘Rao Chana’ program, a new 18.5 billion baht phase of the ‘Section 33 Rao Rak Kan’ program and other ‘worth about 140 billion. baht in total to help those affected by Covid-19.

The measurements will likely take place from July to December of this year. Under the Rao Chana program, an additional 1,000 baht will be awarded to 32.9 million eligible people every week for two weeks. The document can be spent until June 2021. “

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