Director & Head | South and South-West Asia Office | United Nations ESCAP
Dr. Nagesh Kumar is Director and Head of South and South-West Asia Office, of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) based in New Delhi. He has previously served as Chief Economist; Director, Macroeconomic Policy and Development and Social Development Divisions, based at the UN-ESCAP headquarters in Bangkok. Before joining UNESCAP in 2009, Dr. Kumar was Director-General of the Research and Information System for Developing Countries (RIS), a New Delhi based premier policy think-tank of the Government of India. He has also served on the faculty of UNU-MERIT in Maastricht, the Netherlands (1993-1998).Dr Kumar has served on the boards of the Export-Import Bank of India, the International Centre for Trade & Sustainable Development (ICTSD), Geneva; the South Asia Centre for Policy Studies (SACEPS), Kathmandu, among other institutions. He has served as consultant to the World Bank, ADB, UNCTAD, UNIDO, UN-DESA, UNDP, ILO, ERIA, the Commonwealth Secretariat, among others. A PhD from the Delhi School of Economics, Dr Kumar is recipient of the Exim Bank’s first International Trade Research Award and GDN’s Research Medal. Dr. Kumar has researched extensively on different aspects of economic development, resulting in the publication of 18 books, over 30 flagship reports of United Nations and RIS, and over 120 peer-reviewed papers, attracting over 6200 academic citations. He tweets @nageshkum; email: [email protected]
- The Outbreak of the COVID-19 pandemic has impacted South Asian countries severely in socio-economic terms. How do you see theseimpacts linked with the SDG achievements by South Asia countries?
UNESCAP-SSWA: Starting as a health emergency, COVID-19-the global pandemic has evolved into an economic and a ‘human crisis,’ of mammoth proportions. As governments locked down the populations in an effort to contain the pandemic to save lives, economic activities have been disrupted, leaving millions of people jobless, pushing millions into poverty and hunger, and plunging the world economy into the worst recession since the Great Depression of the 1930s. South Asia, a sub-region with nearly a quarter of world’s population but over a third of world’s people living in extreme poverty and hunger, has been impacted severely given the vast proportion of population living at the margins, fragmented coverage of social protection, pervasive informality in economic activities and employment, and wide gaps in public health infrastructure. Millions of workers have been rendered jobless, inequalities have been accentuated and the crisis is likely to reverse years, if not decades, of gains in poverty reduction, undermining the progress made by the sub-region towards achieving the Sustainable Development Goals (SDGs). UNESCAP study on COVID-19 and South Asia has estimated that upto 132 million people in South Asia may have been pushed into extreme poverty in South Asia, which means reversal of gains in poverty reduction for a whole decade. The South Asian economies will be shrinking in 2020 for the first time in four decades!
I would like to say that South Asia’s slow progress in achieving SDGs has affected its preparedness to deal with the pandemic. As a result, the socio-economic impacts on South Asian economies have been more severe than in Southeast Asian economies, for instance.SDGs, with their commitment to universal social protection, zero hunger and universal health cover, among other aspects of dignity of life, reflect important means and capacities countries and their people may have to cope with and recover from the immediate and longer-term impact of shocks such as COVID-19. SDGs are particularly relevant for South Asia, a sub-region home to nearly one-third of the world’s food-deprived population and of those living in extreme poverty, with pervasive informality, lack of decent work opportunities and low rates of female labor force participation. The COVID-19 outbreak hit South Asia at a time when the SDGs were gaining traction and countries had begun to make progress towards some of the Goals although not on track to achieve most of the SDGs. The UNESCAP’s SDG Progress Gateway indicates that while South Asia has made some good progress on SDGs, such as SDG 4 (education), and SDG 7 (energy), its progress in other Goals including access to drinking water and basic sanitation, zero hunger, income inequality and gender equality has been slow.
In particular, South Asia spends less than a percent of GDP on health compared to the global average of 5.8% and 4.5% for East Asian countries. Poor investments in the health sector seems to have resulted in poor public health infrastructure measured in terms of number of beds, and health personnel as many countries in the sub-region fall much below the world averages on these indicators. Gaps in public health infrastructure have been exposed in addressing the pandemic. Also, the sub-region does not provide sufficient access to basic sanitation facilities, and broadband connectivity to facilitate alternative working arrangements during the containment phase. However, on an average Bhutan, Maldives, and Sri Lanka are better equipped in terms of these basic amenities than other countries in the sub-region.
Furthermore, pervasive informality of employment and inadequate social protection increased vulnerabilities. The bulk of the people in South Asian countries is employed in the informal sector of the economy that provides no social security coverage. Lack of social security and poor coverage of national social protection makes the workers vulnerable to any economic shocks that affect their livelihood. Therefore, the pandemic which started as a health crisis has become a humanitarian and livelihood crisis exposing millions of workers especially migrant workers, casual labourers and daily wage earners to income, food and other forms of insecurity.
- What actions are recommended by UNESCAP for mitigating the crisis in South Asia?
UNESCAP-SSWA: We have urged the South Asian countries to building back better through a large, people-centred, inclusive and sustainable relief and stimulusprogramme. These extra-ordinary times for South Asia also require extra-ordinary measures in the form of large, people-centred relief and stimulus packages which not only mitigate the challenges faced but also build more inclusive, sustainable, and resilient societies. Simulations conducted within the framework of the UNESCAP-SANEM South Asia CGE Model indicate stimulus packages ranging between 7-14% of GDP covering public health infrastructure needs, social protection and economic revival: Bangladesh (11% of GDP), India (14% of GDP), Nepal (9%), Pakistan (7%), while Sri Lanka may do with a package of roughly equivalent to 2.5% of GDP. The key priorities for these packages could include the following.
Saving Lives through strengthening public health infrastructure: South Asian Governments have lined up resources to deal with the health emergency caused by the outbreak of the pandemic and to scale up the public health infrastructure that has been overwhelmed. Closing the gaps in public health infrastructure by increasing annual spending and targeting universal health cover would not only help in addressing the most immediate challenge but will also build resilience for future besides accelerating achievement of SDG 3 (good health for all).
Enhanced social protection for livelihood security: In the immediate term, the South Asian governments can rapidly scale up the existing social safety net programmes such as unconditional cash transfer programme and food and cash for work in Bangladesh; the direct benefit transfers and the National Rural Employment Guarantee Act (NAREGA) in India, the Benazir Income Support Programme (BISP) and the Ehsaas emergency cash programmes in Pakistan, to cover more vulnerable urban and rural groups with a focus on gender. When the pandemic abates, the South Asian governments should build on these national programmes to move towards universal social protection systems.
Green, inclusive and gender-sensitive programmes to address multiple and intersecting deprivations: To augment aggregate demand, South Asian countries could also consider launching massive public work programmes (reforestation and environmental friendly public spaces, waste recycling, waste-to-energy, micro-hydel projects, home-solar systems, climate-smart and organic farming practices), in conjunction with the social safety nets that would help to decarbonize the economies while generating jobs and creating public goods of long-term value. Provision of clean cooking fuel in rural areas of South Asia would have important health and gender impacts in the context of COVID-19 and at large.
Re-igniting South Asia’s growth engines: As South Asian economies gradually emerge from lockdowns, reviving MSMEs through immediate infusion of funds and support through deferred payments of taxes, rents, interest payments is critical. Monetary measures to prevent liquidity mismatches and insolvencies are important. Fiscal support and stimuli could also assist in generating demand especially by focusing on large scale sustainable and resilient infrastructure and closing any gaps in the digital connectivity and broadband networks to ensure that all sections of the society including school children have access to online learning tools.
- How can regional cooperation in South Asia help in recovery and building back better
UNESCAP-SSWA: Greater regional cooperation among South Asian countries is critical not only to manage the pandemic’s impact but also to recover in a sustainable manner, as follows:
Sub-regional cooperation for addressing the health emergency: The COVID-19 pandemic has already brought the South Asian countries together through a virtual meeting of the leaders held in March 2020. Following that meeting, a number of cooperative activities have already started including a US$ 22 million COVID-19 Emergency Fund. Besides keeping their markets open for trade in medicines, health care equipment and other essential goods and services, South Asian countries could fruitfully collaborate by pooling of resources and sharing of good practices in digital technologies to improve public health infrastructure and efficiency, developing international helplines, health portals, online disease surveillance systems and telemedicine, and for development and manufacture of affordable test kits, vaccines and treatments for COVID-19.
Harnessing the potential of intra-regional trade for accelerating recovery: Against the backdrop of collapse of the world trade, South Asian countries may consider harnessing the unexploited potential of intra-regional trade to speed up their recovery from the pandemic. UNESCAP analysis shows that two-thirds of such trade potential worth US$55 billion remains unexploited. Formation of regional production networks and value chains could create jobs and livelihoods in a mutually beneficial manner. Harnessing this potential would require action on an agenda to strengthen transport connectivity and facilitation at the borders to bring down costs of intraregional trade, and other barriers.
Financial cooperation for addressing the post-COVID-19 challenges:
The Regional Currency Swap Arrangement of $2 billion operated by the Reserve Bank of India (RBI) to address temporary liquidity problems affecting South Asian countries members has been drawn upon in the context of COVID-19 by Maldives and Sri Lanka. RBI could consider enhancing the corpus of the facility to $5 billion in view of the growing requirements of South Asian countries. For their development finance needs in the post-COVID scenario, South Asian countries could consider transforming the SAARC Development Fund into a South Asian Development Bank, enabling it to raise capital from the markets and catalyzing much larger infrastructure projects through co-financing arrangements with other financial institutions.
Strengthening South Asian freight corridors in the aftermath of COVID-19: South Asia entered the lockdown with poor transport and logistics systems. Lack of digital trade/transport documentation processes and manual transshipment practices at the South Asian ports and border crossings reduce the effectiveness of emergency transport measures. Immediate priority should be to restore regular freight transport operations post-COVID-19 lockdown. South Asian countries need to upgrade infrastructure for modernized cargo tracking, inspection and clearance and move towards a sub-regional electronic cargo tracking system besides coordinated development of corridors through a connectivity masterplan linking together key segments of UNESCAP’s Asian Highway (AH) and Trans-Asian Railway (TAR) networks passing through the sub-region.
Food security and climate-resilient agro-ecosystems:Given their similar agrarian structures, agricultural practices, market orientation, food production and distribution architecture, cooperation for food security has been an important priority for South Asia and a number of initiatives have been taken including establishment of the SAARC Food Bank which has been drawn upon in the context of COVID-19. COVID-19 has highlighted the need for substantial reconfiguration of policy strategies for food security and regional cooperation around an agenda covering building resilience to climate change and future pandemics, regional trade liberalization in agriculture to ensure price and supply stability, sharing of good practices, collaboration on trans-boundary outbreak of livestock diseases, among others.
Sharing of good practices on digital technology: South Asian governments have also turned to digital technologies in their response to the crisis through use of online portals, social media, work from home, on-line learning, direct benefit transfers, delivery of health services through “virtual doctors,” use of drones for sanitation, deploying facial recognition and thermal scanners to identify potentially infected people. Sharing of good practices in e-governance between the South Asian countries could be fruitful. It has also exposed the criticality of closing the digital divide in South Asia to ensure inclusive access to broadband networks in all parts of the sub-region including through UNESCAP-led Asia-Pacific Information Superhighway (AP-IS).
Building disaster resilience through sub-regional cooperation: South Asia especially the coastal parts have been identified multi-hazard risk hotspots where poverty, inequalities and environmental degradation converge with disaster risks, now compounded by COVID-19. Regional co-operation in early warning systems including through WMO/UNESCAP panel on tropical cyclones have helped to save lives by providing timely early warnings. UNESCAP seeks to contribute to resilience building and better recovery from the pandemic by narrowing down the resilience gaps through Asia-Pacific Disaster Resilience Network.
- Against the backdrop of UN@75, how does UNESCAP help the South Asia sub-region in pursuing sustainable development agenda and in building-back better from the pandemic
UNESCAP-SSWA: UNESCAP’s work primarily comprises analytical support to the member states. Our recent report on the COVID-19 socio-economic impact on South Asia is a case in point. We constantly produce analysis on SDGs progress and the policy priorities to achieve them. A UNESCAP-SSWA SDG report produced a few years ago, for instance, showed that exploiting the interlinkages between the SDG goals and targets, South Asian countries could achieve most of the SDGs by focusing on 7 key policy priorities.
Another aspect of UNESCAP’s work focuses on technical assistance and capacity-building especially focused on the least developed countries (LDCs). There are four LDCs in South Asia namely Afghanistan, Bangladesh, Bhutan, and Nepal, all of them except Afghanistan, are likely to move to transition for graduation from LDC status which will bring many challenges for them. UNESCAP is assisting them through analytical work and capacity-building support. UNESCAP is also assisting Afghanistan and Bhutan in building analytical capacity for supporting their process of sustainable development. In the context of COVID-19 pandemic, we are assisting in building capacity of women-led MSMEs for harnessing the e-Commerce and digital marketing of their products in South Asian LDCs and other member states.
The third area of UNESCAP’s work is to promote regional and subregional cooperation through its intergovernmental platform that has resulted in building of institution-building and regional frameworks for regional cooperation in Asia and the Pacific such as international agreements on Asian Highways, Trans Asian Railway, Dry Ports Agreement, Asia-Pacific Trade Agreement, Paperless Trade Agreement, among others. It also facilitates sharing of development experiences and good practices across the region by providing a regional forum for dialogue. At the South Asia level, UNESCAP has been holding South Asia SDG Forums every year (2017: Kathmandu; 2018: New Delhi: 2019: Dhaka). These forums bring multi-stakeholders to discuss initiatives taken by the governments to achieve SDGs, key challenges being faced by them and identify regional solutions.UNESCAPalso organized on 9 July 2020, a high-level policy dialogue on COVID-19 and South Asia bringing together planning/economy ministers of all South Asian countries and Secretary Generals of SAARC and BIMSTEC.It then followed up with another policy dialogue on South Asian cooperation on building back better with heads of policy think-tanks of all the South Asian countries on 9 September 2020. The reports of these dialogues are available at the UNESCAP website and their recordings are available at the UNESCAP Youtube channel. UNESCAP has also been bringing together South Asian experts on cascading risks from multi-hazards and two of them have been held already and their reports are available at UNESCAP website.
Regional and sub-regional cooperation has been considered as the key to operationalizing the UNESCAP framework on socio-economic response to COVID-19 covering 3 pillars viz. (a) protecting people and enhancing resilience, (b) supporting sustainable and inclusive economic recovery, and (c) restoring supply chains and supporting MSMEs.
As a development partner of South Asia with a mandate to promote regional cooperation, and with a subregional office dedicated to it, UNESCAP renews its commitment in the UN@75 year, to assist the member States in exploiting the potential of South Asian cooperation, including in cooperation with SAARC, BIMSTEC, BBIN and other frameworks, to support their effort to build back better and foster inclusive, sustainable, and resilient development!
