According to the United Nations Development Program, low-income Asian countries are not spending enough to support their populations during the coronavirus pandemic.
The governments of rich countries switched to the “all that is needed” mode to stimulate their economies during the crisis, but low-income countries received much lesser responses.
The UN found that a group of developed G-7 countries spend on average 5.6% of their GDP to save their economies, while poorer Asian countries have announced tax packages ranging from 0.02% to 0.8% of GDP. Despite the fact that India has provided a great incentive, only those who are vulnerable receive only 0.8% of GDP.
A health worker checks the temperature in the Dharavi slums during the Covid-19 pandemic on June 20, 2020 in Mumbai, India.
Satish Bate | Hindustan Times | Getty images
The amounts are “too small” and “do not correspond to the task of counteracting the destructive impact on (well-being) of vulnerable segments of the population,” the authors of the article write.
In addition, funds may not reach those most in need, as “more than half of the poorest members of society” are often not included in programs.
“We find this to be a very thin stream for the most vulnerable communities that have very few and have lost their jobs,” said Kanni Vinyaraja, Director of the UNDP Regional Office for Asia and the Pacific. “They are most at risk for coronavirus. This is very worrying now. ”
Last week, she told CNBC Squawk Box Asia that most people who have lost their livelihood live below the poverty line or just above it.
“Such a shock (Covid-19) really pushes them all back … to extreme poverty,” Vinyaraja said.
“This will not be immediately addressed by the fiscal stimulus that goes to larger enterprises and companies,” she said. “We really have to look at the millions and millions of people who are on the street.”
Leaders must make a “bold, strong” choice
According to Vinyaraja, in the short term, a minimum income will be useful as a “temporary bridge” for the next six to nine months.
In the long term, measures such as health insurance, unemployment benefits, and a reliable pension scheme can be implemented.
“Leaders must step in and make a very bold, strong political choice,” she said. “This is not a cash flow problem. Many of our countries have financial choices. ”
On the contrary, many governments generously spend on fossil fuel subsidies. “Therefore, it is urgent for us to change some of these fiscal factors and create a space to choose what can have devastating consequences for a large number of people,” she said.