THE WORST ECONOMIC SLUMP IN AS CORONAVIRUS CRIPPLES ECONOMIES
Photo: Toni Ervianto (Writer)
By : Toni Ervianto
The Covid-19 pandemic will likely slow South Asia’s once-bustling economies to the lowest level seen in decades, the World Bank has warned in its latest report. The rapid spread of the virus and its aftermath for the global economy are so unprecedented that it’s hard to make an accurate projection, the World Bank said in its South Asia Economic Focus report, which presented a range forecast, rather than a point forecast, for the first time.
The slowdown is expected to be seen in each of the region’s eight countries, with growth projected to range between 1.8 and 2.8 percent this year, a dramatic drop from the previously forecast 6.3 percent. Even the upper level of the range forecast would be more than three percentage points below average growth since 1980.
“South Asia finds itself in a perfect storm of adverse effects. Tourism has dried up, supply chains have been disrupted, demand for garments has collapsed and consumer and investor sentiments have deteriorated,” the report says.
After what the bank calls “disappointing” growth rates in previous years, in the fiscal year that started on April 1, the country’s GDP growth is projected to stand between 1.5 and 2.8 percent. While the forecast expects India to face the mildest impact of the coronavirus crisis, the negative effect is still set to overtake the signs of a rebound that were seen at the end of 2019.
Other countries in South Asia such as Nepal, Bhutan and Bangladesh are also expected to suffer a steep decline in economic growth. The Maldives is expected to be hit hardest, with its economy possibly contracting up to 13 percent this year. Pakistan, Afghanistan, as well as Sri Lanka could also fall into recession due to the pandemic. However, in the worst-case scenario the whole region would experience a contraction of GDP.
The crisis is likely reinforce inequality in South Asia, with many of the poorest facing a higher risk of food insecurity. While there are no signs of widespread food shortages so far, the bank warns that protracted lockdowns could deteriorate the situation. “After tackling the immediate Covid-19 threat, South Asian countries must keep their sovereign debt sustainable through fiscal prudence and debt relief initiatives,” said Hans Timmer, World Bank chief economist for the South Asia region (https://www.rt.com/business/485637-south-asia-economic-slump/).
Will go to politic and economic crisis ?
The slump in of global, regional and national economics situations as Covid-19 is worried to create politic and economic crisis around the world, especially in several countries which have deep and huge foreign debt trap, huge unemployment and disguised unemployment, daily cash flow probems, and the lack of food security, fresh water and goods suply chain problems.
However and essentially, several countries have been facing seriously economic resilience related to the unfinished outbreak of Covid-19.
Unfinished Covid-19 can create politic and economic crisis which is triggered by the raise of social, economic and politics situations which are not control again by the government.
Either China or the United States as major global player and economic hegemonic actors who are always dying, bleeding, sorrow and confusion on the search satisfy solutions to end global pandemi. Both China and the US internal economic has crippled by those viruses and both of two countries can not safe another country even their allies to safe from long lasting period of Covid-19.
Indonesia has faced seriously problems to tackle the negative impacts of Covid-19 due to the lack of national dicipline to obey the government’s order to make physical distancing and social distancing, because the raise of Covid-19’s victims are not stop until today and it is going to fast each day.
The continue of Covid-19 is worrying several pundits and observer, it can create politic and economic crisis in this country. There is no way and point of no return for all of Indonesian’s citizen to obey to all of government orders to realize physical and social distancing also stay at home, pray at home and work at home or we will face nightmare and unforgotten moment while our lifes in Indonesia. We pray to the God, it is not come to us. Hopefully. The God bless Indonesia.
*) The writer is an international and strategic problems pundits. He had earned his master at the University of Indonesia (UI) and bachelor degree at Jember University (Unej).
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