The social crisis

Governments are now facing the task of avoiding a vicious downward cycle due to twin supply- and demand-side shocks. On the one hand, higher unemployment and loss of income will scale back demand for goods and services. On the other hand, the pandemic has severely disrupted global value chains, choking production and therefore the supply of goods and services. This affects economies highly integrated in value chains, such as China, but strong spillover effects will make the impact severely felt also in East and South-East Asia and in other regions.

The pandemic’s effects on employment in Asia and the Pacific are cascading: first, through reduction in production and increased trade barriers, then via reduced global demand, and now due to restrictions on movement. Even before the pandemic spread to Europe and the United States, job losses in Viet Nam were estimated to range from 350,000 to 820,000 people. In Cambodia, Bangladesh and Myanmar, smaller garment factories are closing down due to the pandemic and, as a consequence, shedding jobs that were mostly held by women. In Bangladesh, where 45 percent of the population is vulnerable to falling into poverty, garment factories are crucial for providing incomes, especially to the near-poor. As the pandemic spreads, massive numbers of people will lose jobs and livelihoods. The “return wave” of infections from Europe and the United States combined with the spread from within the region has forced even more countries into closing borders and restricting internal movement. Fear of the pandemic has also led to millions of people to self-isolate, even in the absence of government-imposed restrictions. The pandemic is causing massive job and income

losses in the Asia and the Pacific region, disproportionately affecting people in informal employment. The impact is sudden for millions of people who are losing incomes and jobs overnight—e.g. daily and hourly laborers, domestic and cross-border migrants. Their sheer number illustrates the potential scale of devastation to livelihoods in the absence of supportive measures. Of the total workforce of Asia and the Pacific, estimated at 1.9 billion in 2019, around two thirds, 1.3

billion people are informally employed. 24

Migrants and displaced persons are severely affected by the pandemic. Measures taken by governments to suppress COVID-19 and corresponding disruptions to economic activity in migrant destination countries are causing massive numbers of migrants to return to their home countries, often having lost their livelihoods overnight. For example, in the last week of March, tens of thousands of migrant workers from Cambodia, Myanmar and the Lao People’s Democratic Republic sought to return home from Thailand when it announced the closure of its borders. Many are stranded due to the border closures and testing requirements, without jobs or income. They also present a health risk to their home countries whose public health systems and capacities to screen and monitor entrants are woefully inadequate. Undocumented migrants also