APEC Faces USD 2.1 Trillion in Output Loss to COVID-19
Singapore, 20 April 2020
The health and economic crisis brought by the COVID-19 pandemic has afflicted more than two million people globally, with 40 percent coming from the APEC region, according to a new policy brief by the APEC Policy Support Unit.
The policy brief, entitled “APEC in the Epicentre of COVID-19,” breaks down the vast and unparalleled impact of the pandemic on the livelihoods of people and small businesses, which account for 97 percent of all firms in the region.
The APEC region’s growth is expected to decline by 2.7 percent this year, compared to the 3.6 percent growth in 2019, making it the most significant drop since the near-zero growth rate recorded in 2009 during the global financial crisis.
This reduction in growth translates to an estimated output loss of USD 2.1 trillion due to the economic fallout from the pandemic. This is compounded by an additional 23 million people becoming unemployed in 2020.
“The APEC region is on the frontlines for meeting this challenge because member economies are among the first and worst affected by the pandemic,” said APEC Secretariat Executive Director, Dr Rebecca Sta Maria. “A crisis of unprecedented severity calls for a response of unprecedented scale.”
The policy brief projects an economic rebound in 2021, with the APEC region anticipated to grow by 6.3 percent, higher than the projected global economic growth of 5.8 percent.
“As hopeful as it looks, the rebound is conditional on the effectiveness of members’ containment mechanisms to avoid a further wave of the pandemic later this year,” said APEC Policy Support Unit Director, Denis Hew.
The unprecedented shock to the global economy requires a well-targeted and coordinated regional response towards socioeconomic recovery, including greater support for healthcare systems and increased social protection.
The APEC region has an average of 4.1 hospital beds, 1.9 physicians, and 3.9 nurses or midwives per 1,000 people. While these figures have improved since the SARS outbreak in 2003, the current capacity of health systems is insufficient considering significantly higher infection rates and the uncertainty of the duration of the COVID-19 pandemic.
All 21 APEC member economies are rolling out significant and targeted fiscal measures ranging from 1 percent to 20 percent of gross domestic product to address the impact of COVID-19, including assistance for the unemployed and small and medium-sized enterprises.
“Member economies quickly rose to the challenge by introducing fiscal and monetary measures,” said Sta Maria. “The focus now is for members to come together for coordinated multilateral cooperation to support our people and small businesses.”
“Only by working together will we be better equipped to weather this pandemic and fast track our recovery.”
Regional and international organizations such as APEC have a key role to play in ensuring that members continue to exchange relevant public health information including updates on containment measures, and the development of testing kits, treatments and vaccines. Regional cooperation can likewise contribute to improving healthcare access and capacity among member economies.
The policy brief also recommends that APEC members should work to ensure an uninterrupted supply of medical goods and food. This includes eliminating trade-restrictive measures on essential goods to help with the response to the crisis and eventual recovery.
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