The impacts of COVID-19 threaten to put a hold on progress for the sustainable development agenda and erase gains made thus far in the North and Central Asian subregion. By recognizing that it is not a zero-sum game between enacting COVID-19 recovery measures and achieving the 2030 Agenda, countries can align recovery packages with the principles of sustainable development. This will help countries get through this crisis better and prepare the subregion to handle other impending crises more efficiently.
Countries in the subregion have quickly implemented strict measures to curtail the spread of the pandemic. The rising numbers of infected patients exposed the limited capacity of public health systems in the subregion to accommodate such an upsurge in demand for health-care services. Governments scrambled to overcome the bottlenecks of limited hospital beds, insufficient protective equipment and overstretched health-care personnel, and to procure testing facilities. Existing social protection facilities were built upon to provide support to affected social groups in normal conditions.
However, the rapidly changing pandemic situation and incomplete structural economic transformation increased the challenge of effectively targeting these measures. Inequalities and poverty levels are expected to increase, which will especially impact vulnerable population groups. The average gross domestic product growth rate of the subregion is estimated to be -3.2 per cent for 2020. Vulnerabilities in the economic structure, which is dependent on commodity exports, migrant labour and remittances, and the prevalence of employment in the informal sector, pose challenges for post COVID-19 economic recovery. Trade and transport connectivity, which are essential for the landlocked countries in the subregion, were majorly affected by measures put in place.
The recovery measures and packages have reduced the available fiscal space. Substantial fiscal deficits have already been recorded and are expected to widen further in 2021, adding to sovereign debt which was already a concern for some countries. On a positive note, there was a temporary improvement in air quality in major cities in the subregion as socioeconomic activities were scaled down.
In order for countries to recover effectively from the crisis, this policy brief recommends three areas of subregional cooperation.
- Protect people and facilitate inclusivity in social services – The pandemic highlights the vulnerabilities in social systems across the subregion. Emphasis needs to be placed on public health-care funding, targeting vulnerable population groups and ensuring access to quality education.
- Digital transformation can contribute to the double bottom line of economic transformation and achievement of social inclusivity. Digitalisation efforts to facilitate connectivity needs to be preceded by equally accessible ICT infrastructures in rural and urban areas. Matters on online privacy and rights require thorough multistakeholder consultations to uphold the fundamental human right of personal privacy.
- Green economy strategies need to be embedded in recovery efforts to ensure long term sustainability. Low carbon systems and infrastructure ought to be prioritized for investments with supporting policies and financing strategies to shape sustainable economies in North and Central Asia.