VULNERABLE COUNTRIES in Asia and the Pacific such as the Philippines need to invest more in projects that make them more resilient against climate change, according to experts from the Asian Development Bank Institute (ADBI) and United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP).
The Philippines is among the countries suffering the most from the pandemic, past financial crises, natural disasters and other climate-related shocks in the Asia-Pacific, Sweta Saxena, head of the Macroeconomic Policy and Financing for Development Division of ESCAP, said in an online forum arranged by the two organizations Thursday.
“The socio-economic impact of the COVID-19 pandemic was amplified due to lack of resilience and investment in people and the planet. Continuity in policy support is a must and recovery policy packages should focus on building resilience and investing in the 2030 agenda,” she said.
After the region sustained around 450 shocks since the 1960s, the Asia-Pacific has succeeded in lowering the frequency of financial crises, but not much has been done to mitigate the impact of other shocks.
“However, the frequency of other things like natural disasters and pandemics have actually risen over time. All these shocks tend to have a big impact on these economies, and in social and environment aspects as well,” she said.
“These shocks are quite taxing on the economies because they leave long-term scars,” she added, citing reduced investments five years after the past financial crisis, higher inequality and lower environmental performance especially during natural disasters.
The Philippines is among the countries worst hit by natural disasters over the past two decades, based on the climate risk index, which according to John Beirne, research fellow at the ADBI, makes it more difficult for such countries to boost their resilience against climate change.
In the worst-case climate change scenario, Mr. Beirne said the Philippines is the most vulnerable country in Southeast Asia, with projected losses of 0.98% in output per capita by 2030.
The damage is expected to amount to 3.09% of gross domestic product per capita by 2050 and 8.46% by 2100.
Also on the vulnerable end of the table are Indonesia and Vietnam, while Cambodia will likely suffer the least.
The Asia-Pacific region’s progress in achieving the 17 Sustainable Development Goals by 2030 has also been lagging even before the pandemic reversed gains achieved by these countries.
ESCAP’s Ms. Saxena urged countries to undertake “ambitious spending” to offset the reverses, especially the least developed countries.
“Countries should do whatever it takes to safeguard sustainable development in times of crisis; having supportive macroeconomic policies and external financing alongside adequate social services, they could reduce the setbacks in incomes, human capital and environment,” she said.
The number of poor people will be reduced by 180 million in the long term, reducing inequality, bringing down carbon emissions by 30% and improving air quality, assuming the adoption of “ambitious spending” packages.
“If you invest in this kind of a package, that’s definitely going to be beneficial. By how much? It depends as the more sugar you put, the sweeter it’s going to be. However, the negative side is that it’s going to jack up debt levels in the region,” she added.
She estimated Asia-Pacific debt levels to be currently equivalent to 50% of the region’s total output, possibly rising to 75% in 2030 if governments boost their spending. — Beatrice M. Laforga
