After the hard-hitting economic blow in 2020 due to the global Covid-19 pandemic, things are finally looking optimistic, as indicated by the ‘Economic and Social Survey of Asia and the Pacific 2021: Towards post-Covid-19 resilient economies’ report released by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The report predicts India’s economic growth to rebound by 7% in 2021-22, a promising turnaround from the contraction of 7.7% observed in the previous fiscal year.
Observations on India’s Economic Position
Despite a robust decrease in new COVID-19 cases and commencement of vaccination roll-outs, India’s economic output in 2021 is expected to remain below the 2019 level. India’s economic growth was already subdued before entering the pandemic, and it experienced severe economic disruptions due to one of the world’s most stringent lockdowns in 2020. However, India did see an impressive economic turnaround in the later months of 2020 due to changes in lockdown policies and successful reduction in infection rates.
Challenges Faced by India
Two significant hurdles stand in the way of India’s rapid recovery – maintaining low borrowing costs and controlling non-performing loans. Both these factors pose substantial challenges to the economy’s stability and growth.
Observations on Asia-Pacific Countries
The socio-economic impact of the Covid-19 pandemic across Asia-Pacific countries was intensified due to inadequate resilience and investments in people and the planet. China, however, with its swift and effective response, emerged as the only major economy worldwide to achieve a positive annual economic growth rate in 2020. On average, developing Asia-Pacific economies are forecasted to grow by 5.9% in 2021 and 5% in 2022.
K-Shaped Recovery
The phenomenon of K-shaped recovery was highlighted as a major policy challenge. In this, different parts of the economy recover at varying rates, times, and magnitudes following a recession, leading to changes in the structure of the economy. It draws its name from the divergence in the path of different parts of the economy when charted together, resembling the letter “K”.
Recommendations for an Inclusive Recovery
For a more inclusive recovery, the report advocates for a synchronised Covid-19 vaccination programme across countries. It stresses the need for regional cooperation and comprehensive risk management approaches to deal with various financial and non-financial shockwaves. The policy packages should focus on building resilience and investing in the 2030 Agenda for Sustainable Development, and fiscal and monetary support must be sustained.
About the Economic and Social Survey of Asia and the Pacific
The ‘Economic and Social Survey of Asia and the Pacific’ is an annual survey launched by the United Nations since 1947. It monitors regional progress, offers top-notch analyses and guides policy discussion concerning emerging socio-economic issues. The 2021 survey dwells on the impact of the Covid-19 pandemic and provides insights for resilient post-Covid-19 economies.
About United Nations Economic and Social Commission for Asia and the Pacific
UNESCAP, the regional development arm of the United Nations for the Asia-Pacific region, was established in 1947. It houses 53 Member States and 9 Associate Members from the Asia-Pacific Region, including India. With its headquarters in Bangkok, Thailand, its primary objective is to provide result-oriented projects, technical assistance, and capacity building to its member states to overcome the region’s greatest challenges.