Pacific island nations beat coronavirus, but now face economic devastation: report
- The 14 Pacific economies are forecast to shrink an average of 4.3 per cent due to the collapse of trade and tourism, the Asian Development Bank says
- While the countries recorded fewer than 100 coronavirus cases in total, they now face the threat of an additional 1.2 million people entering extreme poverty
Despite recording fewer than 100 coronavirus cases in total, the 14 Pacific economies were forecast to shrink an average of 4.3 per cent this year due to the collapse of trade and tourism, with double-digit contractions expected in the most tourism-dependent nations, the Philippines-based development bank said in its latest Pacific Economic Monitor report.
“Although most Pacific countries appear to have avoided direct health impacts from Covid-19, the pandemic highlights the pressing need to strengthen health and social protection systems in the subregion and thereby alleviate the adverse impacts of prevailing travel restrictions on peoples’ livelihoods,” the report said.
The number of people living in extreme poverty in the region could increase by 40 per cent – a rise of some 1.2 million people – in the short term due to a lack of robust social safety nets, it said.
“In the medium term, the international community can help the recovery by working with the Pacific countries to re-establish their economic links with the rest of the world, through measures to support the safe reopening of the economies and participation in travel bubbles,” said Ananya Basu, principal economist at the Pacific department of the Asian Development Bank.