Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interest
SAARC – Uniting to combat COVID-19
Context: With the pandemic showing no signs of abating, growth prospects for the world’s fastest-growing region, South Asia, appear grim.
COVID-19 in South Asia
India has the second largest number of COVID-19 cases in the world (over 55 lakh) after the U.S
Bangladesh has around 3.5 lakh cases.
Bhutan and the Maldives have managed to largely contain community transmission and avoid prolonged lockdowns due to a higher testing rate.
Low Mortality: Unlike other regions, South Asian countries are experiencing a lower mortality rate despite having a higher infection rate.
Reasons for Low Mortality: The region’s tropical climate, protection offered by a tuberculosis vaccine (BCG), exposure to malaria, and a weaker strain of the virus are considered as some of the reasons for low mortality
Have the governments in South Asia announced stimulus package?
India, in late March, announced a $22.5 billion relief package to ensure food security and cash transfers to save the livelihoods of an estimated 800 million people living in poverty. RBI slashed the repo and reverse repo rate to create liquidity for businesses.
Bangladesh, in early April, announced a stimulus package worth about $8 billion in addition to an earlier $595 million incentive package for export-oriented industries.
Pakistan, in late March, unveiled a comprehensive fiscal stimulus package of $6.76 billion. Its central bank also slashed the interest rate.
Maldives, in late April, mobilised a $161.8 million emergency fund and Afghan government allocated about $25 million to fight COVID-19.
Concerns:
Inadequate Testing: Countries facing a surge in cases, such as India, could have flattened the curve by increasing the number of tests
Data Reliability: South Asia houses one-fourth of the global population and one-third of the global poor, many COVID-19 deaths might have gone unnoticed, unreported or even under-reported.
Implementation of Economic Package: Although countries like India and Bangladesh announced financial and material stimulus packages, distribution concerns remain unaddressed
Inoperative SAARC COVID-19 fund: The fund was created following Indian PM Narendra Modi’s call to South Asian leaders, but governments are yet to decide on its modus operandi.
Narrow Geopolitical Rivalry: This crisis is likely to result in prolonged economic slowdown in South Asia which will be further complicated by narrow geopolitical rivalry.
Way Ahead – A coordinated response mechanism
South Asia region could leverage its existing institutional framework under the umbrella of SAARC to effectively respond to the crisis.
For instance, SAARC Food Banks could be activated to tackle the imminent regional food crisis,
The SAARC Finance Forum can be activated to formulate a regional economic policy response
