The updates on the Asian Development Bank (ADB) COVID-19 Policy Database has shown that economies have remained active in pursuing income support, liquidity support, and credit creation measures. Central banks continue to play a significant role, not just in promoting liquidity and credit creation, but also in financing government fiscal measures. The impact of all these measures depends to some extent on the real sector - agriculture, industry, foreign trade, and services. .In the South Asian region, the COVID-19 lockdown and the economic disruption in its aftermath would affect the countries depending on the resilience of the real sector.

Hit badly by COVID-19 pandemic, South Asia is expected to contract by 3.0 percent in 2020, compared to 4.1 percent growth predicted in April this year by the ADB. Growth prospects for 2021 are revised down to 4.9 percent from 6.0 percent, according to the chief economist of the ADB.  We shall now see how resilient has the real sector been in the South Asian region. We would assess the resilience by studying the trends in the growth performance and share in GDP (Gross Domestic Product) of each of the important segments of the real sector in the economies of South Asia.

We begin with agriculture which is the mainstay of people in many South Asian countries. India had registered the highest estimated average annual growth (3.8 percent) the rate during the period 2015-2019, followed by Bhutan (3.7 per cent), Bangladesh (3.4 percent), Maldives (3.1 percent), Nepal (2,8 percent), Pakistan(1.8 percent),  Sri Lanka(1.4 percent) and Afghanistan (-1.3 per cent).(see table1)

Table 1: the growth rate of agriculture and share of agriculture in GDP of South Asian countries

Note: Figures in brackets for the years 2015 and 2016 are share of agriculture in GDP 

Source: ADB Data Library, data. adb.org

We next, see the industrial growth rates and share of industry in GDP in the South Asian countries. Bangladesh (11.2 percent),  had registered the highest estimated annual average  growth rate during the period 2015-2019,  followed by Maldives (10.6 percent), India (6.1 percent), Nepal (5.0 percent), Pakistan (4.4 percent), Bhutan (3.5%) Sri Lanka (3.1 percent) and Afghanistan (2.7 percent).

Table 2: the growth rate of industry and share of industry in GDP of South Asian countries

Note: Figures in brackets for the years 2015 and 2016 are share of agriculture in GDP 

Source: ADB Data Library, data. adb.org

We next present the growth of  services and their share in the GDP of South Asian countries 

Table 3: the growth rate of services and share of services in GDP of South Asian countries.  Bhutan had registered the highest average annual growth(8.6 percent) rate during the period 2015-2019, followed by India (7.9 percent), Bangladesh (6.4 percent), Nepal (5.9 percent), Pakistan and Maldives  (5.5 percent), Sri Lanka (4.4 percent) and Afghanistan (2.0 percent). (see table 3)

Table 3: the growth rate of services and share of services in the GDP of South Asian countries

Note: Figures in brackets for the years 2015 and 2016 are share of agriculture in GDP 

Source: ADB Data Library, data. adb.org

We will next, see the dependence of countries on exports. Within Asia, between 2015-2019 exports from South Asia grew at 1.6 percent followed by both East Asia and Southeast Asia at 1.5 percent.

Within the south Asian region, Afghanistan had registered the highest average annual growth (8.8 percent) rate during the period 2015-2019, followed by Bangladesh (6.1 percent), Maldives (4.9per cent), Sri Lanka (4.6 percent), India (1.5 percent), Bhutan (0.9 percent), Pakistan (-0.4 percent) and Nepal (-4.2 percent).

Table4: Growth of exports from South Asian countries

Note: Figures in brackets for the years 2015 and 2016 are share of agriculture in GDP 

Source: ADBData Library,data. adb.org

We will next, see the dependence of countries on imports. Within the Asian region, imports grew fastest in both South Asia and Southeast Asia (2.8 percent) followed by East Asia (1.5 percent). Among  the countries within the South Asian region, Nepal had registered the highest average annual growth in imports (13.0 percent) rate during the period 2015-2019, followed by Bangladesh (8.9per cent), Maldives (6.7 percent), Pakistan (5.3 percent) Afghanistan (2.4 percent), India  (1.8 percent), Sri Lanka and Bhutan (0.8 percent). (see table 5)

Table5: Growth of imports from South Asian countries-2015-2021

Note: Figures in brackets for the years 2015 and 2016 are share of agriculture in GDP 

Source: ADB Data Library, data. adb.org

We  next present the data for  South Asia on the proportion of the employed population below $ 1.9  a day in 2019. The data presented would help us to understand the variation in the vulnerability of the population across countries  as expressed by their daily earnings. (see table6)

Table 6: Proportion of employed population below $1.9 a day in 2019 

Source: Basic Statistics 2020, adb.org/publications/basic stat, www://http adb.org/mobile/basic-statistics-2020

The data presented in tables1 to 5 shows the resilience of countries in terms of their real sectoral growth before the pandemic and in its aftermath in the foreign trade sector.

Countries which have performed better in the agriculture sector are expected to have a better cushion to face the pandemic as compared to industry, foreign trade and services in view of the  lesser dependence of agriculture on global supply chains as compared to the other sectors. Countries dependent on the foreign trade and services sector which includes domestic and foreign tourism and hospitality have become the most vulnerable along with industries dependent on foreign supplies of raw material and migrant labour.

In terms of a more vulnerable population which is less well paid, Afghanistan, India, Bangladesh and Nepal are more vulnerable as compared to the rest of the countries of the region. Within the Asian region, South Asia seems to be more vulnerable in terms of its dependence on the foreign trade sector as compared to either east or South East Asia, but with more poor people living in South Asia, the vulnerability of the region seems to have gone up even more. The vulnerabilities of the region call for greater intraregional economic cooperation to take advantage of each other’s' strengths and opportunities to face the pandemic with a unified strategy in the spirit of neighbourly cooperation. 

(The writer is a retired Indian Economic Service officer who worked in the labour ministry. The views expressed are personal. He can be contacted at ppmitra56@gmail.com) 

Reference:  https://data.adb.org/story/key-responses-covid-19-asia-pacific-economies-update-adb-covid-19-policy-database

Developing Asia to Grow Just 0.1% in 2020 — ADB

News Release | 18 June 2020

https://www.adb.org/what-we-do/covid19-coronavirus