Daily Mirror (Sri Lanka)

South Asia....

- Business · Finance · World Finances · World Bank · South Asian Association for Regional Cooperation

“The col­lapse of South Asian economies dur­ing COVID19 has been more bru­tal than an­tic­i­pated, worst of all for small busi­nesses and in­for­mal work­ers who suf­fer sud­den job losses and van­ish­ing wages,” said Hartwig Schafer, World Bank Vice Pres­i­dent for the South Asia Re­gion. “Im­me­di­ate re­lief has dulled the im­pacts of the pan­demic, but gov­ern­ments need to ad­dress the deepseated vul­ner­a­bil­i­ties of their in­for­mal sec­tors through smart poli­cies, and al­lo­cate their scarce re­sources wisely.”

Three-quar­ters of all work­ers in South Asia de­pend on in­for­mal em­ploy­ment, es­pe­cially in hos­pi­tal­ity, re­tail trade, and trans­port—sec­tors most af­fected by con­tain­ment mea­sures. The re­port warns that in­for­mal work­ers and firms have lit­tle room to cope with un­ex­pected shocks of the mag­ni­tude of COVID-19. While the poor have faced ris­ing food prices and suf­fered se­verely, the COVID-19 cri­sis has dealt a fur­ther blow to many in­for­mal work­ers in the mid­dle of the in­come dis­tri­bu­tion who ex­pe­ri­enced sharp drops in earn­ings.

Few in­for­mal work­ers are cov­ered by so­cial in­sur­ance, have sav­ings or ac­cess to fi­nance. The re­port urges gov­ern­ments to de­sign uni­ver­sal so­cial pro­tec­tion as well as poli­cies that sup­port greater pro­duc­tiv­ity, skills de­vel­op­ment, and hu­man cap­i­tal. In that ef­fort, se­cur­ing in­ter­na­tional and do­mes­tic fi­nanc­ing will help gov­ern­ments fund cru­cial pro­grammes to speed up re­cov­ery.

In the long-term, dig­i­tal tech­nolo­gies can play an es­sen­tial role in cre­at­ing new op­por­tu­ni­ties for in­for­mal work­ers, mak­ing South Asia more com­pet­i­tive and bet­ter in­te­grated into mar­kets—if coun­tries im­prove dig­i­tal ac­cess and sup­port work­ers to take ad­van­tage of on­line plat­forms.

“COVID-19 will pro­foundly trans­form South Asia for years to come and leave last­ing scars in its economies. But there is a silver lin­ing to­ward re­silient re­cov­ery: the pan­demic could spur in­no­va­tions that im­prove South Asia’s fu­ture par­tic­i­pa­tion in global value chains, as its com­par­a­tive ad­van­tage in tech ser­vices and niche tourism will likely be in higher de­mand as the global econ­omy be­comes more dig­i­tal,” said Hans Tim­mer, World Bank Chief Econ­o­mist for the South Asia Re­gion.

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