Financial stability on the brink

suggests that more men than women are dying, potentially due to sexbased immunological or gendered differences, such as patterns and

prevalence of smoking. A study of some 44,600 people with COVID-19 from the Chinese Center for Disease Control showed the death rate

among men was 2.8 percent, compared with 1.7 percent for women. 31

The economic impact of COVID-19 is adversely affecting the financial sustainability of different economic players, with critical consequences on their ability to withstand and respond to shocks. The combination of the severe economic downturn, ushering in lower revenues and higher public expenditures along with tightening financial conditions, is putting pressure on the financial sustainability of governments, corporations and individuals. As the World Bank points out, while macro and financial fundamentals are better than at the beginning of previous financial crises, Malaysia, Thailand and Viet Nam, for instance, record elevated

domestic debt, mostly in the corporate sector. Lower corporate

earnings and greater debt servicing burdens on companies may

lead to increasing defaults, causing job losses, plunging investor

confidence, and potentially triggering a widespread credit crunch

and financial crisis. Surveys in China showed that many SMEs had

enough cash for up to five months of operation, but a third of them

only up to one month. 32 This is even more problematic given China’s high level of non-financial corporate debt (153 percent of GDP in 2018, though much of it held by state-owned enterprises (SOEs)). 33

Fiscal space is limited by several factors. One half of Asia-Pacific

economies are now recording fiscal deficits, which are fairly large in the case of Viet Nam, Cambodia and the Lao People’s Democratic Republic. Cambodia and Laos, as well as Mongolia, Malaysia, and Papua New Guinea also face high external debt, making them vulnerable during a time of financial stress. 34 High debt service

levels constrain government spending, already squeezed by

the pandemic response. As of 27 March, the G20 reported fiscal

measures totalling some 5 trillion dollars (6 percent of the global GDP). 35 However, lower-income countries generally lack fiscal

resources to fund large-scale stimulus measures, and are therefore seeking much needed grants, concessional loans or possible future debt service relief through the IMF, World Bank and others.

31  Wenham, C., Smith, J. and Morgan, R. (2020). COVID-19: the gendered impacts of the outbreak. The Lancet. Volume 395, Issue 10227, pp. 846–848, available at https://www. thelancet.com/journals/lancet/article/PIIS0140-6736(20)30526-2/fulltext?dgcid=raven_jbs_etoc_email; and World Economic Forum (2020). The coronavirus fallout may be worse for women than men. Here’s why. 32  UNDP China (2020). Assessment Report on Impact of COVID-19 Pandemic on Chinese Enterprises. 7 April 2020 33  IMF (n.d.). IMF DataMapper. Government Finance Statistics database. Available at https://www.imf.org/external/datamapper/NFC_LS@GDD/CHN 34 World Bank. World Bank East Asia Pacific Economic Update, April 2020. 35  IMF (2020). Opening Remarks at a Press Briefing by Kristalina Georgieva following a Conference Call of the International Monetary and Financial Committee (IMFC). Available at https://www.imf.org/en/News/Articles/2020/03/27/sp032720-opening-remarks-at-press-briefing-following-imfc-conference-call