Unescap on Covid: lessons and suggestions

Unescap’s recent policy note on the impact and policy responses for Covid-19 in Asia and the Pacific warrants attention. But one hopes that its follow-up reports on the subject will plug four important gaps in literature which its current report doesn’t shed light on.

Released late last month, the policy note talks about corona’s key areas of impact on the socio-economic landscape of Asia-Pacific region, and suggests short and medium-term recommendations for its member states while recognising that it is still too early to assess long term impact.

The report stresses the point that Covid-19’s is “both a supply and demand side shock”. It recommends “immediate and large fiscal measures, supported by targeted monetary easing”, to contain the pandemic, cure people and ensure economic and financial stability. Here, the most important message for governments is that “short-term economic responses should prioritize people over economic recovery.”

The corollary of concurrent emergence of supply and demand side shocks is that cookie-cutter approach to stimuli would not work. Instruments for various monetary and fiscal stimuli ought to be well devised, tailored to specific goals and well targeted. Here, one suggestion, as proposed by BR Research earlier in this space, is to offer proportioned income tax cuts to businesses in various slabs, linked to slab-based employee retention by the businesses. (Read: The perfect storm & our misplaced priorities, March 24, 2020)

The UN body also recommends countries to facilitate “expedient cross-border movement of essential medicines, medical equipment and teams, and other essential goods”, by removing tariffs and non-tariff measures. One might add the need for cross-border collaboration of ideas for public health purposes, be it inventing new ventilators or testing new treatments. On that note, Unescap’s observation that “countries with established universal health care and universal social protection systems are better positioned to address the pandemic” will hopefully drive a healthy debate in Pakistan and lead to at least the tabling of relevant policy choices.

Onto the gaps in Unescap’s policy note, which one hopes the UN body will address in its follow-up notes or at least in its detailed report after the pandemic ends.

The first one relates to data. The Unescap alludes to the importance of data when it talks about targeting concerns in the absence of (or poorly updated) administrative data systems of individual incomes and expenditures in relation to support to low income households. But it doesn’t shed enough light on the degree to which various countries are helped by a solid database not only of the poor for social spending, but also of businesses, farming and industrial production, service sector SMEs, taxation, and so forth for the purpose of tailoring fiscal and monetary stimuli.

Second relates to local government. This is a subject not entirely new to Unescap. It has previously embarked on exercises to understand the role of local governments and their future, and also looked at the role of sub-national governments in basic services delivery in conflict affected areas. In the same vein, one expects Unescap to shed light on what has been the role of local governments in this region in national response to Covid, and whether or not countries with effective local governments have fared better in the management of this crises. (See also BR Research’s, PM’s ‘corona’ tigers, not paper tigers? April 2, 2020)

The third gap that one would like Unescap to address relates to the role of transparency and inclusiveness in disaster management. What kind of institutions, broadly conceived, member countries have to ensure accountability and transparency in the managing of disaster related aid received from international and domestic donors?

Likewise, what institutions, mechanisms and information basis exist to ensure fair distribution of endowments (like tax cuts, subsidies, etc) among the various sections of business community – both between and among various economic sectors – during this ongoing disaster?  Answer to these and other related questions are paramount for judicious disaster preparation and disaster management.

Lastly, how have member countries organized, and using their third sector and non-profits in dealing with this crisis. This includes both government coordination with local think tanks, policy research institutes and academia in their preparation of response to the disaster, as well as coordination of charity organizations to avoid duplicity of efforts.

Given Unescap’s unique position as arguably the largest regional intergovernmental platform working as a think tank to offer analytical products on evolving economic social developments, one expects the UN body to address these knowledge gaps for the collective benefit of all stakeholders.