03 June (Punjab Mail) – The social and economic impacts of the novel corona virus are amplified in Asia excluding China out of 48 Countries 47 and Central Asia under threat, where healthcare resources are limited, supply chains are vulnerable, and government revenues are dependent on a narrow range of commodities produced by extractive industries or retail revenue of Refined Oil. While the spread of the disease in Asian subcontinent and Central Asia is moderate still, the economic repercussions are more serious. With cross-border trade volumes and commodity prices at historic lows due to COVID lockdown measures, the region’s national governments are straining to implement policy measures that address both disease containment and economic stimulus – a difficult balancing act that if executed poorly could significantly exacerbate the consequences of coronavirus. May lead to unrest in some countries, further lead to making of new Countries.
The pliability of the province, or the capability of its people, communities, governments and systems to endure the impacts of negative events and to continue to grow despite them, is being put to the test. Amid this COVID-19 crisis four primary areas of resilience-building that, if addressed, will enable Asia Subcontinent and Central Asia to not only weather the remainder of the COVID storm, but emerge with stronger and more competitive economies that can continue to improve quality of life for its citizens.
The resilience of each country will be tested by their ability to develop pro-growth economic recovery programs amidst economic lockdowns and rising unemployment. Responses must include immediate term emergency relief actions to protect the health of their people and provide a social safety network.
Measures such as short-term unemployment insurance are needed but have to be applied cautiously in order to not destroy work incentives. Any such programs must have a clear sunset date. Work from home to be treated as work for Company. There should be moral and ethical liability of the Government and Industry to help their staff. If not able to pay the staff now due to liquidity crisis then at least Promise them to pay. Promissory note is very important in their notices. In case of India after 20 Trillion Stimulus Announcement, Industrialist have no choice, but to stay with staff with full salary. Or, the Government is lieing about the 20 Trillion Stimulus announces in five days of press conference by Finance Minister Shrimati Nirmala Sitharaman. It should be clear to people that 20 Trillion Stimulus Exist then Company has to pay to the staff, or Industry needs to prove its fake then Government will be paid in next election automatically by electronic voting machine.
Close will open, and it will open. But it has shown us the mirror that we are not well equipped with health care system, and neither in agriculture independence. While the health crisis has seen an unprecedented closing of borders around the world, open borders are essential for trade to resume and fuel the economic recovery.
The diversification of supply chains that has been a stated priority of many advanced economies poses a comparative advantage to the countries of Asian Subcontinent and Central Asia. This, combined with concerns around the world about food security, can open new markets—both westward and eastward—and spur growth in the agricultural and food processing industries of Asian Subcontinent and Central Asia. Indians can grab this opportunity both in Healthcare services and Food exports; I mean agriculture goods supply to east and west.
The world energy market will impact differently in Asian subcontinent and Central Asia, as some of the County are major exporter of Crude Oil. But in this pandemic, it hardly makes a difference, both hs been hit – The exporting and Importing Countries at the same time. According to the IMF, crude oil prices will continue to reflect a frail demand into 2021. It is predicted that the price of a barrel of oil will remain below $45 through 2023, 25% lower than the average price in 2019 ($61.4). This decline of commodity prices will especially affect energy exporters in the region, as oil and gas exports constituted 20-35% of GDP for Kazakhstan and Turkmenistan. Whereas this decline will help India and other Asian subcontinent countries to somehow control the debts to some extent.
China’s imports from Central Asia fell dramatically in the first quarter: just China’s trade turnover with Kyrgyzstan fell almost 12%. Furthermore, the economies of Kyrgyzstan, Tajikistan, and to a lesser extent, Uzbekistan rely on remittances sent by migrant workers from Russia: they accounted for 33% (2018), 34% (2019), and 15% (2018) of the countries’ GDP, respectively. As Russia’s economy declined, and Moscow barred entry for all foreigners, the seasonal workers will have to stay home, further contributing to unemployment in the region.
In case of India, it is worst then China. As Government of India is not having clear cut stand on anything. This uncertainty has made economy churning to the extent where its recovery is unlike not expected till 2024, and it is because, sloganeering and nothing concrete is seen. Government announcement is such that no one can understand who is poor in this Country. Government of India killed Industrialist since 2017 to showoff that India is now “free from corrupt industrialist” then forcing them with too many new laws, this uncertainty is killing Indian job. But it will help political parties, as poor India votes well.
What is good in the hands of Asian Subcontinent Countries and Central Asian Countries is their sizeable currency reserves, especially Dollar reserve, so that opening again will not see sudden lack of foreign reserves. These Countries needs to print more money to boost economy, and foreign reserves to be intacted for opening. This will help them to recover fast to see the run way, take off is still far. But it will assure them the economy will take off to height of GDP upto 4 to 5 percent in 2022.
In case of India, The Prime Minister of India as I read is trying to show that he is working too much for the Country. But results are not in his favour. People are angry, which you can see in the local talks. Community talks. It has not been converted into sentiments still. Prime Ministers election machinery is ready to troll, cut, creep by new slogans for a time being. But it will not help in long run to the Country.
The buoyancy of India, or the ability of its people, communities, governments and systems to withstand the impacts of negative events and to continue to grow despite them, is being put to the test. If Indians loses trust in Prime Minister Modi, it will impact on socio-economic and foreign relation of this Country post pandemic.
Results will depend on the short and long-term policy steps taken by Modi government to combat the virus and bolster their economies against future shocks. Country under his leadership needs to check with four primary areas of resilience-building that, if addressed, will enable India to not only weather the remainder of the COVID storm, but emerge with stronger and more competitive economies that can continue to improve quality of life for its citizens. These four parameters are not strained for India it should be implemented in Asian Subcontinent and Central Asia. My recommendations are:
1. Comprehensive Crisis Management Policy Packages: No one is able to describe the packages and existence. Countries are announcing but not able to deliver. Like in India, I am not able to gauge where 20 Trillion Stimulus is. Only Government and their spokesperson know it. My suggestions to Asian Subcontinent and Central Asia Countries are:
At first, fund and develop approaches for integrating resilience into all levels of government decision making, including the creation of domestic departments/ministries responsible for resilience planning;
Expand existing social safety net programs to include vulnerable populations most affected by the coronavirus and the economic downturn; Ensure. EITHER POCKET IS NOT EMPTY, OR PLATE IS FULL. Delegate increased authority to local governments in order to quickly and efficiently mitigate the possible outbreaks and their economic consequences; decentralize decision-making; Hug new ideas too with old tested one.
Facilitate regional healthcare cooperation with an emphasis on knowledge sharing and need-based medical aid; Expand and accelerate transition to virtual provisions of services, including local and state administration (e-governance), education (e-learning) and healthcare (telemedicine).
2. Elasticity in finances and Economic Diversification: This is most important for recovery implement it with cautious. For Asian Subcontinent and Central Asia Countries have different economies but basis is same:
Accelerate economic diversification away from commodity-export model towards services, manufacturing, renewable energy, agriculture, and SMEs;
Invest in retraining programs for workers of the hydrocarbon and extractive industries to prepare them for the new energy economy; Don’t harvest Government earning of Oil taxes only. Give more opportunity in real not in papers and slogans.
Develop an Intergovernmental Cooperation Strategy for Asian Subcontinent and Central Asia countries in the fields of renewable energy and energy efficiency;
Leverage International Financial Institution (IFIs) resources such as the Green Climate Fund (GCF) to accelerate the transition away from the hydrocarbon economy.
Open hands, open minds, and make path for equal opportunity, and make independent industries dependent on home grown small scale manufacturer.
3. Monetary, Fiscal, Tax and Regulatory Policy Adjustments: Don’t make taxation a hard way in calculation. Complication will give you less tax calculation. DON’T MAKE POLICY FOR FINANCERS OF THE PARTY WHO HELP GOVERNMENT FORMING: –
Adjust government budgets as fiscal balances will significantly deteriorate due the public health and economic consequences of COVID-19 in the region;
Establish a regulatory and fiscal environment that would facilitate both foreign and domestic investment, discouraging the outflow of human capital and tax base; simplify it.
Modify tax policy so that the emergence of services and sustainable
manufacturing is encouraged, diversifying the national economies from their dependence on natural resource mining and extraction;
In the name good governance, don’t complicate governance. Resist the urge of protectionism and use regional and global forums for information sharing and trade policy coordination; Gear financial support packages and tax relief and incentives towards the support of individuals and small businesses that maintain employment; If Companies in this pandemic giving full salary must be incentives.
Reform legal and regulatory frameworks to make it easier for businesses to maintain their operations through the crisis periods, and for new entities to emerge and operate profitably thereafter. Make it easy; don’t make it harsh, in any case they are your citizen.
4. Food Security : Either a citizen should have money in the pocket, or food in their plate. Give them job or free food. Post pandemic for two years it will be best stimulus package to get economy on track and avoid la and order problems.
Guarantee continuity of food supply chains to avoid hunger and social unrest during national disasters. A national emergency supply chain strategy must therefore be established to build resilience against possible future disruptions;
Diversify food imports, improve domestic agriculture capacity, and increase government aid to farmers, including expanding financing and education;
Conclusion: I wrote it for my on knowledge. But sharing just incase, it helps any Government, it will help them, I am sure. I know, Mr Prime Minister of India Shri Narendra Modi is not advice takers. Making propaganda in the name of economy too has been his practice. So, Government of India or any associates doesn’t need to read it. For the other Asian Subcontinent and Central Asian Country policy makers must take a note of it. It will help them.
Article written by Dr Ajay Kumar chairman and Managing director of fox petroleum