The Fiji Times »COVID-19 Recession – The Impact on the Pacific Region

The socio-economic impacts of COVID-19 devastate communities in the Pacific and Timor-Leste as much as the virus itself, and sometimes to an even greater extent.

World Vision surveyed 752 households (with an average of six people per household) in Papua New Guinea, Solomon Islands, Timor-Leste and Vanuatu in late 2020 to better understand the secondary impacts of the pandemic at the community level.

The sample size was relatively small (because the survey was carried out in an emergency context under government restrictions), but the results nonetheless provide valuable insight into the profound and sometimes unexpected ripple effects of COVID- 19 in the region. Unsurprisingly, the loss of livelihoods was the main concern of the households surveyed.

Almost 60% of those surveyed either lost their jobs, lost income or resorted to other sources of income due to the economic impacts of the pandemic.

The top five reasons cited by households for this loss of income were reduced demand for goods / services (29%), closed markets (20%), lack of access to subsistence inputs such as seeds and materials. (18%), movement restrictions (15 percent) and transport limitations (10 percent).

These disruptions cripple the same industries that are the traditional engines of Pacific economies – tourism, agriculture, small and medium-sized businesses and the money sent in by seasonal workers.

Street vendors and farmers have been hit the hardest, with 56% of vendors and 55% of agriculture and livestock workers saying their work has been fully or severely affected by the pandemic in the past two years. weeks preceding the survey.

These data are consistent with concerns expressed by the Lowy Institute that the Pacific has been particularly hard hit by the economic fallout from COVID-19 and could face a “lost decade” of economic progress as a result.

According to current projections, average income per person in the Pacific will not return to 2019 levels until 2028, unless a multi-year stimulus package is urgently adopted.

The loss of livelihoods does not only affect the activity of consumers; it has significant ripple effects in Pacific societies.

The ‘Pacific Aftershocks’ survey revealed the cruel choices families are forced to make as their incomes plummet, with households resorting to selling assets and even skipping meals to cope:

  • Only half of the households surveyed were able to fully cover their food expenses, with one in four (24%) skipping meals or eating cheaper meals since COVID-19;
  • More than half (51.7%) of households drew on savings to cope with the loss of income;
  • 5 percent of households had sold productive assets such as livestock or equipment;
  • 14% of households sent their children to work to compensate for the loss of income; and
  • 14% have engaged family members in begging or high-risk jobs With tourism set to be one of the last sectors to recover from the pandemic, there is a real risk that the Pacific will face its own version of ‘Long COVID’ – a slow and prolonged rise to economic normalcy over the next decade, during which the above socio-economic impacts could become a kind of ‘new normal’.

But that doesn’t have to be the case. In the short term (over the next six months), efforts are needed to urgently scale up social protection measures (such as cash and voucher assistance and, where this is not possible, food) in order to help poor families with disrupted income to meet their needs. immediate needs.

In many settings in the Pacific region, assistance in the form of cash and vouchers minimizes market distortion while ensuring that families do not resort to negative coping mechanisms such as eating less or straining their families. children to work.

To rebuild better in the medium to long term (one to five years ahead), a series of initiatives should be deployed to boost the Pacific economy and rebuild livelihoods.

This could include improving access to finance for small businesses, strengthening market systems to make them work better for the poor, investing in women’s economic empowerment, and restoring environments through regenerative agriculture at low cost.

As a mechanism to coordinate and steer this work, it is recommended that all national governments and donors in the Pacific region, including Australia, work together to develop an Economic Stimulus Pact – a roadmap for rebuild the regional economy in a way that leaves no one behind.

By rebuilding livelihoods, starting at the bottom of the economic pyramid, donors and national governments can increase productive capacity, broaden the consumer base, and build resilience across the market system, while supporting those who need it most.

Just as regional governments have worked together to establish the Pacific Humanitarian Pathway on COVID-19, the region should again rally around the longer-term recovery effort – because a regional crisis like this requires a response. regional.

For more information, see World Vision’s Pacific Aftershocks report: Unmasking the impact of COVID-19 on lives and ways de vie in the Pacific and Timor-Leste.

  • JONATHON GURRY is the Senior Policy Advisor for World Vision Australia, which leads policy development on livelihoods, food security and climate change. He is a former lawyer with many years of international experience in the aid and development sector.
  • Dane Moores is Policy Officer at World Vision Australia, where he oversees policy analysis and influence on children’s rights, livelihoods and food security, conflict and fragility, and policies of First Nations.
  • This article was first published on Devpolicy Blog (devpolicy.org), from the Development Policy Center at the Australian National University. The opinions expressed in this article are those of the authors and not of this journal.
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