Addressing the epidemic of inequality in the Asia-Pacific region

After two years of human destruction, the world is learning to live with COVID-19 while trying to balance public health and livelihood security.

For Asia and Pacific countriesStayC, It is not only challenging because the national treasury is heavily squeezed by record public spending to alleviate the epidemic, but also because of the deep structural economic problems.

Covid-19 has exposed an epidemic of inequality in a region with the world’s fastest-growing economy but half the world’s poor. A region where about half of the total income goes to only 10% of the people while the poorest 10% get only 0.2%.

This failure to grow together means that leaving the epidemic behind has made Assad’s situation worse. Estimates suggest that more than 820 million informal workers and more than 70 million children from low-income families have been deprived of adequate income and access to education since the outbreak. More worryingly, it will leave long-term scars on economic productivity and learning, which will hurt the already marginalized prospects of their future earnings.

Amid continuing uncertainty about when the epidemic will occur StayBehind us, of course, is an assurance for policy makers in the regionStayRecovery and progress must reach everyone.

According to the Economic and Social Survey for Asia and the Pacific in 2022, the prospects for the regional economy are puzzled by the downward risks associated with epidemics and emerging challenges in the foreign policy environment.Stayc, published April 12 by ESCAP. Between 2020 and 2022, the growing output loss for the region’s developing economy is estimated at about $ 2 trillion. Prolonged epidemic barriers will exacerbate unequal recovery.

Policy for a fair future
COVID-19 has created a generational opportunity to build a more equitable and sustainable world. As the UN Secretary-General has emphasized, this transformation process must be anchored in a new social contract that provides equal opportunities for all.

Countries can pursue a tripartite policy agenda to lay the groundwork for an inclusive stakeholder economy in Asia and the Pacific.StayC.

Immediate priorities are avoided StayScale cut so that the development gains of the last few decades are not lost irrevocably. In fiscal consolidation, developing Asia-Pacific countries must maintain public spending on healthcare, education and social security so that inequalities do not deepen and penetrate.

Instead of austerity, “smart” fiscal policy can improve the overall efficiency and effectiveness of public spending and revenue collection opportunities. Government spending needs to shift to primary health care, universalisation of basic education and the inclusion of tertiary education, as well as increasing and extending social security coverage for informal workers. At the same time, new sources of revenue should be explored by taxing the digital economy. Digital technology can improve the delivery of healthcare and social security services.

In the face of fiscal constraints, as a second policy pillar, central banking may move beyond its traditional role and share responsibility for promoting economic inclusion, as high and persistent levels of inequality can reduce monetary policy effectiveness. Only half of the central banks in the region have financial access, financial literacy or consumer protection among their objectives and strategies. This is a missed opportunity.

Conservative reserve allocation strategies prevent central banks from deploying portions of the region’s $ 9.1 trillion official reserves to the social sector. StayFinancial instruments. Amendments to central bank laws and investment strategies could make this possible. A well-designed central bank digital currency, backed by an active digital infrastructure and StayMay increase financial literacy FOther benefits include financial inclusionFIts central banks should also promote the use of social impact and stability-linked bonds for social purposes.

The third pillar addresses the root causes of inequality. The economic structure determines the dynamics of inequality and the path to “growth with equity”. Thus, policy makers must focus on pre-allocation rather than redistribution policy. Developing countries can learn from the region’s advanced economic experience to actively direct, shape and manage the structural transformation process for inclusive development.

The digital-robotic-AI revolution is increasingly affecting economic transformation so there is great uncertainty for inclusion. To prepare for this, labor-intensive technology, inclusive access to quality education, re-skilling, strengthening the capacity to negotiate labor and the development of social protection floors require public support.

While COVID-19 is a major push in the 2030 Agenda for Sustainable Development, it is an opportunity to accelerate investment in people and the planet and accelerate regional progress toward achieving the Sustainable Development Goals.

This is an opportunity we can’t waste.

Armida Salsiah Aliszahbana is the Under-Secretary-General of the United Nations and the Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP).