Covid-19 worsens Asia’s staggering inequalities

Between March and December 2020, the equivalent of 147 million full time jobs were lost in the Asia Pacific region.

Amitabh Behar

Amitabh Behar

The Jakarta Post


Grim: People in a low-income area relax near railway tracks at Pintu Air Karet, Tanah Abang, Central Jakarta. According to the World Bank, more and more poor people across the globe, including Indonesia, will fall into extreme poverty as a result of the COVID-19 pandemic. It is expected that the world could see 150 million people in extreme poverty by 2021. (JP/P.J. Leo)

January 13, 2022

NEW DEHLI – In the decades before the pandemic, Asia was often celebrated as a shining example of policies resulting in economic growth. But to talk about economic growth and reduction in absolute poverty was to only tell half of the story.

Asia was also deeply unequal. Since the 1990s, neoliberal economic policies, a failing global tax system, and runaway income and profits at the top channelled income and wealth into the hands of an elite few. While billionaire wealth in fast growing economies such as China and India accelerated at an unprecedented rate, the vast majority of those living in Asian countries were left behind.

This gulf between rich and poor fuelled unjust and persistent disparities in life chances and impacted the ability of countries in the region to achieve development goals.

When the COVID-19 pandemic hit this deeply unequal region, the impact was also far from uniform. The virus not only claimed more than a million lives in Asia, it has also combined with high levels of inequality to set back progress on equitable development by decades.

Between March and December 2020, the equivalent of 147 million full time jobs were lost in the Asia Pacific region. In 2020, the World Bank estimated that between 140 million people in Asia were pushed into poverty and in 2021 another 8 million became poor.

Vulnerable groups such as women, ethnic and religious minorities and migrant workers were worst affected. Across Asia, informal and migrant workers suffered an estimated 21.6 percent fall in their income in the first month of the pandemic. Even as women make up over 70 percent of healthcare workers, over 60 percent women faced barriers in accessing healthcare.

In South Asia, health service disruptions caused an estimated 11,000 additional maternal deaths in 2020. Adolescent pregnancy, unsafe abortions, and violence against women have also risen during the crisis.

But as Oxfam in Asia’s latest report highlights while the vast majority of Asians were worst off, a small minority were shielded from the impact of the pandemic and even thrived. The number of billionaires in the region grew from 803 in March 2020 to 1,087 in November 2021 and the region’s billionaires were able to grow their wealth by 74 percent.

Some of Asia’s richest have even benefited directly from the crisis. By March 2021 there were 20 new Asian billionaires whose fortunes came from equipment, pharmaceuticals, and services needed for the pandemic response. This means that by November 2021, Asia’s richest 1 percent owned more wealth than the poorest 90 percent.

As billionaires pocketed additional income and wealth, the chances for poor to catch up have been further narrowed. In 2020, UNESCO estimated that 10.45 million children in Asia would drop out of school or university forever due to the pandemic, and more recent lockdowns and school closures have only made matters worse.

This has exacerbated already high-level of education divide. School closures and a move to online learning has favored wealthier students, and girls are also less likely to have access to the internet or mobile phones which means the pandemic has put them at an even greater disadvantage in accessing education. This will have far reaching impact on equal opportunity.

As the Delta and Omicron variants push up case numbers and continue to hamper economic recovery, governments must rise to the challenge. The crisis has also shown that budget allocation is a question of priorities and where there is political will, there is a way. In Indonesia, for example, an allocation of 1.7 percent of gross domestic product could pay for a package of universal social safety nets that would contribute to reducing the poverty rate from 22 percent to 15 percent.

Across Asia, governments implemented some progressive policies in response to the crisis, and demonstrated the importance of social protection and strong public health systems in protecting the lives and rights of the majority of their citizens.

However, these measures were far from perfect, often being temporary and either failing to meet the needs of or excluding the most vulnerable people. Such measures must be scaled up and made permanent so they would better equip countries for future crises, help to reduce health and economic inequalities and ensure that no one falls through the cracks.

Oxfam’s report shows that a wealth tax of 2 to 5 percent on Asia Pacific’s multi-millionaires and billionaires, could raise an additional US$776.5 billion every year. That would be enough to increase public spending on health in the region by 60 percent and can prevent unnecessary and pre-mature deaths in the future or enhance education opportunities to bridge the gap.

There is a need to eschew longstanding neoliberal policies of privatization and austerity and build on recovery measures already being taken to ensure universal social protection and quality public health services.

Governments must ensure region’s recovery embraces the priorities of tackling inequalities through policies designed to level the playing field, and redistribute wealth and power, build a feminist future where social and economic policies ensure equal rights, freedoms, and opportunities for women and girls, especially those from oppressed and marginalized groups.

We must also ensure a green recovery that protects the planet we all live on and more responsible private sector where an inclusive business model, that upholds human rights and promotes equality.

This means increased taxation of rich individuals and corporations, and regional and global cooperation to enforce it, greater investment in public services and vaccines for all, and for social protection and care work, decent work, living wages, and robust labor rights for everyone and national and regional plans to reduce economic and social inequalities.

Crises shape history, and coronavirus offers a once in a generation chance for Asia to build back better, and choose a progressive regime that put the needs of the many before the profit and wealth of the few.

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