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UNESCAP REPORT ON INDIA’S ECONOMIC OUTPUT IN 2021

Context:

‘Economic and Social Survey of Asia and the Pacific 2021’ was released by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) with the focus on the COVID-19 pandemic’s impact.

Relevance:

GS-III: Indian Economy (Economic Growth and Development in India), GS-II: International Relations (Important International organizations and their reports)

Dimensions of the Article:

  1. About UNESCAP
  2. About the Economic and Social Survey of Asia and the Pacific
  3. Highlights of the ‘Economic and Social Survey of Asia and the Pacific 2021: Towards post-Covid-19 resilient economies’
  4. What is a K-shaped recovery?
  5. Way Forwards

About UNESCAP

  • The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region.
  • UNESCAP is headquartered in Bangkok, Thailand.
  • It was established in 1947 has 53 Member States and 9 Associate Members from Asia-Pacific Region including India. In addition to countries in Asia and the Pacific, the commission’s members include France, the Netherlands, the United Kingdom and the United States.
  • It was established in order to increase economic activity in Asia and the Far East, as well as to foster economic relations between the region and other areas of the world.
  • The commission works to address some of the greatest challenges facing the region through results-oriented projects, technical assistance and capacity building to member states along with providing a forum for its member states to promote regional cooperation and collective action in pursuit of the 2030 Agenda for Sustainable Development.

About the Economic and Social Survey of Asia and the Pacific

  • The Economic and Social Survey of Asia and the Pacific is published annually since 1947 and hence, it is the oldest United Nations report on the Asia and Pacific region’s progress.
  • The Survey monitors regional progress, provides cutting-edge analyses and guides policy discussion on the current and emerging socio-economic issues and policy challenges to support inclusive and sustainable development in the region.

Highlights of the ‘Economic and Social Survey of Asia and the Pacific 2021: Towards post-Covid-19 resilient economies’

  • India is estimated to record an economic growth of 7% in 2021-22, over a contraction of 7.7% witnessed in the previous fiscal on account of the pandemic’s impact on normal business activity.
  • Unfortunately, India’s 2021 economic output is expected to remain below the 2019 level, as India entered the pandemic with already subdued GDP (Gross Domestic Product) growth and investment.
  • Maintaining low borrowing costs and Keeping non-performing loans in check are the two major challenges for India on its path to faster economic recovery.
  • China’s swift and effective response to Covid-19 enabled it to become the only major economy worldwide to achieve a positive annual economic growth rate in 2020.
  • On an average, developing Asia-Pacific economies are expected to grow 5.9% in 2021 and 5% in 2022.
  • The prospect of a K-shaped recovery, characterized by uneven post-pandemic recovery across countries and widened inequality gaps within countries, is highlighted as a primary policy challenge.

What is a K-shaped recovery?

  • A K-shaped recovery happens when different sections of an economy recover at starkly different rates.
  • A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.
  • This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter “K.”
COVID magining" vs. and F

Way Forwards

  • For a more robust and inclusive recovery, the report calls for a more synchronised Covid-19 vaccination programme across countries. There is a need to leverage regional cooperation.
  • It recommends that fiscal and monetary support should be sustained, as premature tightening could increase long-term scars.
  • Continuity in policy support is a must and recovery policy packages should focus on building resilience and investing in the 2030 Agenda for Sustainable Development.
  • To deal with various economic and non-economic shocks, a more integrated risk management approach to planning and policymaking is needed.

-Source: The Hindu

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