The World Bank has warned that the worst economic performance in more than 40 years is likely to be seen by the countries of South Asia in the face of the novel coronavirus pandemic bringing economies to a standstill.
This impact on the region’s economies will virtually undo decades of good work that have been undertaken to reduce property in the area.
Even though a number of South Asian economies such as India, Bangladesh, Sri Lanka and Pakistan have, till now, reported a much lower number of coronavirus cases and related deaths compared to some of the Western economies, experts fear that these countries can be the next global hotspots for the disease.
The total population of South Asia region is about 1.8 billion people and it has some of the most densely populated cities in the world.
“South Asia finds itself in a perfect storm of adverse effects. Tourism has dried up, supply chains have been disrupted, demand for garments has collapsed and consumer and investor sentiments have deteriorated,” said the World Bank report.
The World Bank had made a projection of economic growth of 6.3% before the coronavirus pandemic outbreak which it has not brought down drastically and the Bank now expects the growth rate of the region to be between 1.8 per cent and 2.8 per cent. The report noted that a “deep recession” could impact at least half the countries in this region.
According to the World Bank report, the small nation of Maldives, which is essentially a conglomeration of small islands in the Arabian Sea, will be the worst hit economy because its economy is dependent on high-end tourism which has been the worst hit industry in the coornavirus pandemic because of near complete shutdown of travelling and tourism. The report warned that the economy of the country could shrink by as much as 13 per cent because of the pandemic impact.
The World Bank report also predicted that the growth rate for the largest economy of the region – India, could fall to as low as 1.5 per cent for the current fiscal year compared to the earlier projected growth rate of about 5 per cent.
The World Bank, through the report, advised governments to “ramp up action to curb the health emergency, protect their people, especially the poorest and most vulnerable, and set the stage now for fast economic recovery”.
Among the other suggestions made by in the report, the World Bank has stressed on temporary work programmes for migrant workers, as well as providing debt relief for businesses and individuals while also reducing bureaucratic interference delaying essential imports and exports.
The Washington DC-based World Bank had announced last week of a $160bn package of financial support for targeted to those vulnerable countries that have been the hit by the pandemic and are finding it hard to cope up with the health as well as economic fall outs. The funds will also be used for helping in staging economic recoveries.
(Adapted from BBC.com)