Asia's Unequal Recovery Sounds Warning Bells for Global Economic Rebound

Business Standard Asia's unequal recovery sounds warning bells for global economic rebound

Asia is an important barometer for the world economy because it accounted for more than two-thirds of global growth in 2019 and is home to a majority of those between the ages of 15-24.

Asia’s head start in the economic recovery from Covid-19 is sending a warning to the rest of the world: inequalities exacerbated by the virus are unlikely to be reversed any time soon.

Even as the region’s rebound gathers pace, many workers who lost their jobs early in the crisis find themselves stuck in new positions with less pay. Economists caution that while a lasting shift toward the digital economy will create opportunities, it risks stoking divisions unless governments pour more investment into the workforce. The Asian Development Bank and International Labour Organization say as many as 15 million jobs for teenagers and young adults in the region could be lost this year.

Asia is an important barometer for the world economy because it accounted for more than two-thirds of global growth in 2019 and is home to a majority of those between the ages of 15-24. It also began recovering from the worst economic crisis since the Great Depression earlier than much of the West, fueled by a rapid snap back in China.

“The big risk is that right now, especially when you interact the crisis with technological change, there’s a real risk that inequality gets worse,” said Aaditya Mattoo, the World Bank’s chief economist for the East Asia and Pacific region.

Even those who have been able to adapt are uncertain about the future. In Jakarta, Fanny Febyanti, 38, made an unlikely shift to catfish farming as she struggled to keep afloat a public relations business that she runs with her husband. It’s already clear to her that the recovery is going to take time.