In face of a pandemic: The international community and South Asia

By Dr Srimal Fernando

The 2020-2021 coronavirus outbreak in South Asia has caused severe impacts on the South Asian countries, including the disruption of economies, food insecurity, and economic uncertainties, amongst others. Ever since the onset of the pandemic, the economies of South Asian countries have experienced the harshest economic conditions since the Asian financial crisis of 1997 and the global economic crisis. However, the South Asian economy is set to expand seven per cent in 2021 (World Bank). These prospects can arguably be described as the region’s strongest post-recession of the century. Notably, these regional prospects are still subject to several potential uncertainties, such as the unpredictable Covid-19 waves and its potential downsides on the economies of South Asian countries.

Given these realities, various regional and international players have committed to supporting the recovery of South Asian nations to continue promoting the growth and development of the region. As of May 2021, the World Bank has obligated the vaccination purchase and rollout efforts in several South Asian countries, including Afghanistan, Bangladesh, Nepal, and Sri Lanka. As of June 2020, US$ 2.75 billion was obligated to support India’s recovery aid response to the Covid-19 pandemic. The organization also obligated $500 million to support the recovery of over 550,000 Indian Small and mid-size enterprises (SMEs) who the economic impacts of the pandemic had hard hit.

Apart from the economic impacts of the COVID-19 pandemic to South Asian countries, the pandemic has also overwhelmed the South Asian health systems and affected the availability of quality healthcare services amongst South Asian countries. The pandemic has also caused significant public health resources to be directed towards providing basic healthcare services. For example, the second wave of the coronavirus weakened India’s healthcare systems and with the government struggling to contain the increased number of deaths with inadequate healthcare resources. However, India has received support from global powers such as the United Kingdom (UK) and the United States (US) in the form of healthcare resources and vaccines to help manage the new surge of the coronavirus. Notably, the emerging wave of COVID-19 infections has disrupted the economic recovery efforts of South Asian economies.

In light of these developments, the United Nations (UN) has also taken initiative to address the impacts of the pandemic in South Asia. As of 21st May 2021, the UN had obligated US $164 million to help purchase personal protective gear and other COVID-19 management resources to help South Asian countries extricate themselves from the devastating impacts of the newly emerging waves of coronavirus infections in the region. In Nepal, UN agencies have called for the implementation of a national response plan that is estimated to cost about $83.7 million. These resources are mean to finance the COVID-19 response in Nepal by addressing the humanitarian needs arising from the impacts of the pandemic and preventing the loss of lives through logistic support and response in healthcare. UN agencies have also been actively involved in the response and recovery initiatives in the region in other South Asian countries, such as the Maldives, Sri Lanka, Bangladesh, Afghanistan, Pakistan, and Bhutan.

With large investments from international organisations and the South Asian governments, a huge part of these response and recovery initiatives are country-specific. For instance, the World Bank has obligated $153 million to support Pakistan’s COVID-19 vaccination initiatives and over a billion dollars to support the same efforts in Bangladesh. Overall, the COVID-19 response and recovery initiatives as of June 2021 are estimated to be around $8.9 billion. Over 28 initiatives have been implemented to this end.

Policymakers across the region have been focused on mitigating the near-term impacts of the pandemic on their economies. But going by experience from past recessions, the pandemic is set to create long-term impacts on the fragile economies of South Asian countries. The long-term economic effects of the pandemic are likely to be severe for South Asian countries that are dependent on tourism and other services that require person-to-person contact. For instance, in Sri Lanka, the tourism sector is the second largest export earner accounting for close to 55 percent of GDP before the pandemic. The Maldives also heavily relies on tourism which accounts for 39 percent of the nation’s Gross domestic product (GDP)

According to the International Monetary Fund (IMF), the projected economic prospects of the broader Asian Pacific region are optimistic. However, the new surges of Covid-19 infections in countries such as India are a major concern. As new waves of infections continue to emerge and the impact of the pandemic continues to grow, so will the need for collective efforts amongst South Asian economies with support from international players and regional players such as the South Asian Association for Regional Cooperation (SAARC). As a result, shifts beyond country-specific initiatives will be likely, as will be increasing investment in economic recovery and response plans for the region. While the investments aimed at supporting the health systems and vaccination amongst the South Asian countries are of the essence, investments in the economy are equally important.

About the Author:

Dr. Srimal Fernando received his PhD in the area of International Affairs. He was the recipient of the prestigious O.P. Jindal Doctoral Fellowship and SAU Scholarship under the SAARC umbrella. He is also an Adviser/Global Editor of Diplomatic Society for South Africa in partnership with Diplomatic World Institute (Brussels). He has received accolades such as 2018/2019 ‘Best Journalist of the Year’ in South Africa, (GCA) Media Award for 2016 and the Indian Council of World Affairs (ICWA) accolade. He is the author of ‘Politics, Economics and Connectivity: In Search of South Asian Union.’