The lockdowns to control the infection of Covid-19 have devastated economies, as the economic activities of people paused to a great extent, according to the International Chamber of Commerce – Bangladesh (ICC-B).
Analysts have identified the pandemic as a turning point in world history, with ramifications for everything from climate change to the global balance of power, the ICC-B said in its quarterly news bulletin for Jan-Mar’21.
Just a year ago, on March 11 in 2020, the World Health Organisation (WHO) declared Covid-19 a global pandemic.
According to WHO, the virus has infected over 135.65 million people worldwide and caused 2.93 million deaths, as of March 31.
To fight the pandemic, regional cooperation is needed to bolster South Asian capabilities, the chamber said.
South Asia has done better in containing the pandemic in the form of a single metric: the number of deaths from Covid-19 per million people.
According to World Bank’s South Asia Economic Focus released on March 31, prospects of an economic rebound in South Asia are firming up as growth is set to increase by 7.2 per cent in 2021 and 4.4 per cent in 2022, climbing from historic lows in 2020 and putting the region on a path to recovery.
But growth is uneven and economic activity is still well below pre-Covid-19 estimates, as many businesses need to make up for lost revenue and millions of workers (mainly informal sector), still reel from job losses, falling incomes, worsening inequalities, and human capital deficits.
The region is set to regain its historical growth rate by 2022. Electricity consumption and mobility data is a clear indication of recovering economic activity, the ICC-B also said.
India, which comprises the bulk of the region’s economy, is expected to grow more than 10 per cent in fiscal year 2021-22 — a substantial upward revision of 4.7 percentage points from January 2021 forecasts.
The outlook for Bangladesh, Nepal and Pakistan has also been revised upward, supported by better than expected remittance inflows, World Bank added.
According to the United Nations World Economic Situation Prospects (WESP) 2021 released in January, the pandemic and the global economic crisis have consequently left deep marks on South Asia, turning this former growth champion into the worst performing region in 2020.
But to grow back stronger, South Asian countries will need first to redouble their efforts to diversify their economies, while at the same time taking stock of global trends initiated by the crisis, such as restoring of global value chains and a decreased appetite for contact-intensive services.
Achieving resilience to external shocks should be among the most important considerations within the decision framework for policymakers in South Asia, who are currently rethinking their industrial policies, UN WESP 2021 added.