World Bank report on COVID-19 in EAP a road map to our future

This month’s report of the World Bank’s Economic Update for the East Asia and the Pacific (EAP) titled From Containment to Recovery makes interesting reading.

It provides a holistic road map to the future for Fiji and other countries in EAP on economic growth and poverty projections “with policy recommendations on what countries can do to build towards a lasting recovery” from the impact of COVID-19.

In a summary of the bank’s key findings, Hamish Wyatt of the bank’s Pacific communications, says the COVID-19 pandemic has delivered a triple shock to the developing EAP: The pandemic itself, the economic impact of containment measures, and reverberations from the global recession.

The report suggests that policies governments draw up should not only provide relief, but also positively impact recovery and future growth.

It requires prudent management of our resources. The report says the crisis has shown that taking a dynamic view could help the EAP governments make choices today that soften trade-offs tomorrow in seven key areas:

■ Building capacity for smart containment

■ Initiating fiscal reforms.

■ Maintaining hard-won reputations for financial prudence

■ Widening social protection

■ Devising strategies for smart schooling

■ Supporting firms

■ Deepening trade reform

It is noted that the region has suffered less to date from the pandemic than other parts of the world through “stringent mobility restrictions, extensive testing-based strategies, and information programmes to encourage precautionary behaviour”. However, the pandemic and efforts to contain its spread led to a significant curtailment of economic activity. That’s exactly what happened here. The border closure and other restrictions like partial or targeted lockdowns and curfews were aimed at containing the killer virus by stopping its community transmission. But they came at a cost, unemployment at the top of the list.

The ripple effects across our communities are being felt. On one hand we have stopped the spread of the virus and communities are safe. On the other hand we have suffered from the economic repercussions.

It’s a reality that we have to face. No amount of distortion of facts or politicking will change the situation. Only prudent financial management taking into considerations all the seven key areas raised by the World Bank will see us through this crisis.

The Government has addressed some of these in the 2020-2021 National Budget. To do more it would need extra funding. At the moment it is constrained by resources caused by the projected drop in revenue from the decline in the economy.

The bank has projected that the region as a whole is expected to grow by only 0.9 per cent in 2020, the lowest rate since 1967. Prospects for the region are brighter in 2021.

It says the COVID-19 shock is not only keeping people in poverty, but also creating a class of “new poor.” It adds: “The employment and earning impacts of the pandemic have been large and widespread. COVID-19 will have a lasting impact on inclusive longerterm growth by hurting investment, human capital, and productivity. Left unremedied, these consequences of the pandemic could reduce regional growth over the next decade by 1 percentage point per year.”

Fiji can reverse the trend through a non-political and united approach to find the remedies that will help rebuild our economy and the lives of our people. NEMANI DELAIBATIKI