As of April 30th, 2020 the total cases affected with Covid-19 in South Asian region were 58,854 - a mere 1.8% of the global toll of 3,220,970 - despite the fact that South Asia has a 25% share in world's population. Infection fatality ratio of South Asia is 2.8% against 7% globally and 5.59% of China. Given the population size, and intense population density it has fared better than many other parts of the world.
Lockdowns by the governments across the region have clearly contained the chain of transmission through social and physical distancing. However, scarcity of testing kits and the massive size of population, improved testing might change the statistics. Moreover, difference of climate, factors of immunities and social behavior might have an impact on disease spread, morbidity and high mortality.
The lockdowns have saved precious lives, but endangered livelihood of billions of people in developing economies including those in South Asia. The global economy has been pushed into recession by Covid-19 pandemic. The recession is getting worse with the passage of time and uncertainties accrued to it. The South Asian regional growth rate is forecasted by the World between 1.2 to 2.8%, against 6.3% projected worst performance in the last 40 years with 7 to 10% GDP deficits.
Economies across the region may face high intensity supply and demand shocks, with higher demand for food and consumer goods like food and medicines, but this demand might be offset by other non-essential consumer goods. India, Pakistan, Bangladesh and Nepal have a large diaspora especially in the Gulf and the EU; remittances might reduce rapidly due to layoffs and weaken the purchasing power of family back at home. Disruption in supply chains will reduce the availability of raw materials and may result in higher inflation; especially of consumer goods.
More than 85% of the South Asian economies consist of MSMEs; self-employed, small-scale entrepreneurs, and daily wages informal labourers. The lockdown puts them in a hard trade-off of getting infected or going hungry. While the governments are locking down economies, special social protection is needed as ensuring livelihoods is the most important aspect of saving lives. Therefore expansionary measures would be needed for provision of employment and domestic production. Moreover, cutting down the interest rate and exchange rate is a must for a constant flow of funds for businesses to carry on during this difficult time.
Since viruses do not understand politics and respect the manmade borders, the Covid-19 calls for global and regional solutions. We need to come up with solutions that would work and aid the most vulnerable with collaborative efforts to respond to the extensive socio-economic impact on people. Landlocked Afghanistan and Nepal are most vulnerable in the South Asian region, the other factor is their close proximity to hard hit areas of Iran and China, respectively. Maldives, which relies solely on tourism could face devastating economic shocks. Therefore, India and Pakistan, being the immediate neighbours and larger economies, need to assist the most vulnerable economies of the region.
This crisis has provided us a huge opportunity to reboot our regional cooperation. Given that isolation is not a long-term solution, the South Asian nations have to exhaust the palpable vacuum in regional cooperation, and realize that only multilateral efforts and cooperation will make a difference.
The platform of SAARC may be used for dialogues at the level of heads of government to chalk out a common agenda, revitalizing the regional agreements and institutions. Revival of core Technical committees on health, trade and social issue should be done on a war-footing to establish dialogue and formulate the required strategies.
Establishing SAARC Covid-19 Emergency Fund and revving the Technical Committee on health is a positive premonition but the peoples of the South Asian region are looking beyond it. The region needs resumption of regional trade, transit trade for the landlocked economies. We just not need each other during this pandemic but in post-pandemic recovery from the damages and losses due to lockdowns would need intense regional cooperation as well. Avoiding conflicts, the regional stakeholders need to start a new chapter of regional cooperation in wake of Covid-19.
(The Writer is Director at SAARC Chamber of Commerce and Industry, an apex body of SAARC)