World Bank urged right mix of polices on health and economy to mitigate economic shock of COVID – 19

The World Bank says countries in East Asia and the Pacific must act now to mitigate economic shock of COVID-19.

The organisation said this in its Economic Update for East Asia and the Pacific report released on Monday.

Developing economies in East Asia and the Pacific (EAP), recovering from trade tensions and struggling with COVID-19, now face the prospect of a global financial shock and recession, the report said.

Impacts on the economic growth of Myanmar in 2019/20 are also estimated to be severe, but dampened by strong performance before the pandemic. The economy can recover quickly with the right mix of health and economic policies.

Building on early announcements the government should focus on adding health resources where most needed, supporting firms with access to credit and households with temporary relief for lost incomes, the World Bank, said.

“Countries in East Asia and the Pacific that were already coping with international trade tensions and the repercussions of the spread of COVID-19 in China are now faced with a global shock. The good news is that the region has strengths it can tap, but countries will have to act fast and at a scale not previously imagined,’’ said Victoria Kwakwa, Vice President for East Asia and the Pacific at the World Bank.

The report provides six main policy recommendations:

1. Adjust both health policies and macroeconomic policies to prevent the spread of infection. Early investments in health can reduce the need to take costly preventive measures when epidemics strike. For example, countries like Singapore and the Republic of Korea seem to have benefitted from high levels of testing, tracking, and quarantines. 

2. Urgently boost health care capacity to meet what may be an overwhelming demand for a sustained period.

3. Adjust fiscal and monetary policy to meet the COVID-19 crisis. 

4. In the financial sector, ease access to credit for households to ease hardships and smooth consumption, and ease access to liquidity for firms to help them survive the current disruption. 

5. Trade policy must stay open to retain the production of essential supplies for domestic consumers as several countries have imposed restrictions on exports of medical products. 

6. In all of these areas, boost international cooperation and develop public-private partnerships, particularly to ensure the supply of key medical products. 

“Countries in East Asia and the Pacific and elsewhere must fight this disease together, keep trade open and coordinate macroeconomic policy,” said Aaditya Mattoo, Chief Economist for East Asia and the Pacific at the World Bank.

The World Bank Group is rolling out a US$14 billion fast-track package to strengthen the COVID-19 response in developing countries and shorten the time to recovery.

(The Myanmar Times: https://www.mmtimes.com/news/world-bank-urges-right-mix-policies-health-and-economy.html )

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