APEC region faces US$2.1t output loss in 2020 due to Covid-19

KUALA LUMPUR (April 21): The Asia-Pacific Economic Cooperation (APEC) region’s growth is expected to decline by 2.7% this year, translating to an estimated output loss of US$2.1 trillion compared with the 3.6% growth in 2019, due to the economic fallout from the Covid-19 pandemic.

APEC Secretariat executive director Tan Sri Dr Rebecca Fatima Sta Maria said this is the most significant drop since the near-zero growth rate recorded in 2009, during the global financial crisis.

“This is compounded by an additional 23 million people becoming unemployed in 2020. The APEC region is on the front line for meeting this challenge because member economies are among the first and worst affected by the pandemic,” she said in a new policy brief by the APEC Policy Support Unit.

Titled “APEC in the Epicentre of Covid-19", the policy brief breaks down the vast and unparallelled impact of the pandemic on the livelihoods of people and small businesses, which account for 97% of all firms in the region.

According to the report, the health and economic crisis brought by the Covid-19 pandemic has afflicted more than two million people globally, with 40% coming from the APEC region.

However, the policy brief anticipates an economic rebound in 2021, with the APEC region anticipated to grow by 6.3%, higher than the projected global economic growth of 5.8%.

Commenting on this, APEC Policy Support Unit director Denis Hew said 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.

“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," he said.

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% to 20% 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.

“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,” said Sta Maria.

Regional and international organisations 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 work to ensure an uninterrupted supply of medical goods and food, including eliminating trade-restrictive measures on essential goods to help with the response to the crisis and eventual recovery.

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