COVID-19 pushes 150 million into poverty and exacerbates economic inequality in Asia



Urgent government actions are needed to counter rising poverty and inequality and recoup gains towards achieving the Sustainable Development Goals (SDGs) that have been made in the recent years but wiped out by the pandemic  / Jakarta, 10 November 2022.


The COVID-19 pandemic has left massive scars on societies and economies in Asia. Given the less preparedness with weak economies, poor social protection systems and inadequate public health system in a large part of the Asia-Pacific region, the economic and social impacts of the pandemic are devastating.


While full economic and social costs have yet to be determined, some initial estimates indicate that over 1.5 million people have lost their lives, and economic crises have pushed 150 million people into poverty. The gains made in recent years to reduction in poverty, decline in inequality, and achieving gender equality have been wiped out by the pandemic.


Among other factors, rising unemployment, reduced working hours, decreased household incomes, food inflation, crowding out of government equity-enhancing spending, loss of schooling and learning opportunities, glaring digital divide, loss of earning family members and significant reduction of remittances contributed to the increase in poverty and inequality. These are the major conclusion of a multi-country research ‘Implications of COVID-19 on Economic Inequality in Asia’ published by Bloomsbury and launched today in Jakarta by SDGs center of the University of Padjadjaran. The research was carried out in Japan, Korea, China, India, Malaysia, Philippines, Thailand, Indonesia, Pakistan and Bangladesh by prominent economists in Asia.


The research finds:

  1. Pandemic have pushed 90 million people into extreme poverty based on the $1.90-per-day and over 150 million and 170 million under the $3.20 and $5.50 poverty line, respectively, by 2021, in the developing countries of the Asia-Pacific.
  2. Region’s income inequality is likely to have risen on an average by 8% during the COVID-19 pandemic. Between-country inequality rose by 1.2% between 2017 and 2021, the first such increase in a generation. Wealth inequality has also grown during COVID-19. In 2021, the top 1% held a fifth of wealth in all countries in Asia, and over 25 per cent in 18 countries.
  3. COVID-19 containment measures led to widespread job losses and rising unemployment. In 2020, there was 7.9% reduction in working hours, equivalent to 140 million job losses. Job losses and quarantines hit poor and low-income households.
  4. Informal workers being more vulnerable to social distancing and lockdown measures, and high shares of women working in the informal sector, the pandemic has worsened gender inequality.
  5. It was estimated that the labour income was declined at 13.4% for South Asia, 5.0% for South-East Asia and the Pacific, and 4.1% for East Asia in 2021. 83%, 70%, 55%, 75% and 48% of households in Cambodia, Vietnam, Philippines, Thailand, and Laos reported falls in income, respectively.
  6. Food prices in July 2022 increased by 7–9% in India, Indonesia, Malaysia, Nepal, Philippines, and Thailand, 20-22% in Kazakhstan, Laos and Mongolia, 29% in Pakistan and 91% in Sri Lanka, compared with the same month in 2021.
  7. Connecting with internet enables workers to work from home and kids to access online education. However, this luxury was not available to many. Not having access to internet denied timely access to public services including benefits, work options and e-learning opportunities.
  8. 10.45 million children in Asia may have drop out of school or university forever due to the pandemic. In 2021 more than 800 million children across Asia had been disrupted due to school closures since the start of the COVID-19 pandemic in early 2020.

Governments in the region responded the crisis according to their fiscal space in 2020 and 2021. These measures included direct cash transfers, subsidies on food and utilities, grants to firms under workers retention schemes, support to SMEs to withstand the economic shocks, increasing health spending, extending subsidized loans to households and firms and tax credits. However, these measures were temporary and inadequate, said professor Arief Anshory Yusuf one of the authors.


The pandemic has exposed significant weaknesses in existing healthcare systems in many countries of Asia-Pacific due to many years of underinvestment in public health. There has been a lack of health facilities, trained medical professionals, medical equipment, testing facilities and medicines. Majority of people pay out of their pocket to get essential medical services. Across the region, social protection systems are not equipped to provide adequate responses to economic and social shocks brought about by the pandemic. Majority of populations were excluded and large majority of those excluded were informal workers, said Mustafa Talpur one of the authors.


The research recommends following actions while rebuilding the post-covid economies to tackle rising poverty and inequality in Asia:

  1. Increase investment in public health systems to prepare for any future health crises, by building more hospitals, training more doctors and nurses, and making available more medical equipment, and striving to achieve universal health coverage
  2. Expand the scope and coverage of social protection to achieve universal access. Social protection programmes should include all informal workers and go beyond pensions and cover unemployment, healthcare, and protection of injuries.
  3. Invest more in the public education system to create equal opportunities and making up for the lost schooling years especially for girls. Reducing and eliminating the digital divide by providing affordable and subsidized access to the internet is also essential.
  4. End gender discrimination by providing more employment opportunities to women, women’s economic and political empowerment, and increased investment in care infrastructure and services to reduce disproportional care responsibilities of women.
  5. Asia-Pacific is highly vulnerable to climate change. Therefore, given the opportunity of rebuilding post COVID-19 economies, countries must expedite the transition to renewable energy, invest in climate adaptation and achieve their carbon emission reduction targets.
  6. Increase progressive tax revenue measures to fund social protection and public services. These may include taxes on capital gains, properties, and inheritance; reducing exemptions and incentives; levying ‘solidarity taxes’ on the rich and ‘windfall taxes’ on companies profiting from oil prices, and ensuring multinational corporations pay fair taxes by reducing harmful tax practices and tax avoidance. Introduce wealth taxes, both as one-off emergency measures and on a recurrent basis as ongoing redistributive policies.




Restu Almiati:
You can find the book here:–covid19-on-economic-inequality-in-asia-9789356402140/