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Potential Economic Impact of COVID-19 related School Closures+

  • IASbaba
  • May 28, 2022
  • 0
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In News: India’s GDP to take a big hit due to pandemic-linked learning losses for students: ADB study

  • A new working paper titled ‘Potential Economic Impact of COVID-19 related School Closures’ was published by the Asian Development Bank (ADB)

Findings

  • The GDP of India, which is among the countries with the longest school closures during the COVID-19 pandemic, would see the highest decline in South Asia due to learning losses for the young
  • Starting with a $10.5 billion dent in 2023, the country’s economy could take a nearly $99 billion hit by 2030, translating into a 3.19% reduction in GDP from the baseline growth trends
  • India may thus account for over 10% of the global GDP decline of $943 billion estimated by the ADB on account of earning losses in 2030, with jobs for skilled labour expected to decline by 1%, and unskilled labour by 2% that year.
  • Economies with a significant population of schoolchildren and college-going youth in rural areas and in the poorest and second wealth quintile — have been worst-hit as they lack access to stable Internet connection needed to study online
  • Learning and earning losses are significant because a notable portion of the impacted population will migrate to the unskilled labour force
  • A large part of India’s work force is constituted by unskilled labour4 million as per the ADB paper’s estimates, compared to 72.65 million skilled workers.
  • In terms of absolute change, India experiences the highest GDP decline in South Asia, at about $98.84 billion in 2030.
  • School closures lead to declines in global GDP and employment. Moreover, the losses in global GDP and employment increase over time. Declines in global GDP amount to 0.19% in 2024, 0.64% in 2028, and 1.11% in 2030.

Recommendations

  • India has the highest number of children enrolled in primary and secondary education among the Asian economies covered in the paper, at 255.74 million.
  • The number of students in tertiary education were second only to China at 36.39 million
  • While mooting greater investments in education and skills with a focus on narrowing the digital divide, the study has suggested the most immediate challenge for governments is to help students recover “lost opportunities” by conducting assessments among impacted children.
  • Governments need to direct adequate funding and resources to young populations most affected by closures, such as those from the poor, rural and socially disadvantaged groups.
  • It is important to keep school-age children in education as much as possible by providing financial support and incentives, while giving additional support for skills training to youth already out of school

Asian Development Bank

  • ADB is a regional development bank established on 19th December 1966.
  • ADB now has 68 members, 49 from within Asia.
  • ADB is headquartered in Manila, Philippines.
  • ADB’s five largest shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3%), and Australia (5.8%).
  • It aims to promote social and economic development in Asia.
  • ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Previous Year Questions (PYQs)

Q.1) With reference to Asian Infrastructure Investment Bank (AIIB), consider the following statements: (2019)

  1. AIIB has more than 80 member nations.
  2. India is the largest shareholder in AIIB.
  3. AIIB does not have any members from outside Asia.

Which of the statements given above is/are correct?

  1. 1 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Source: The Hindu

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