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Buoyant South Asian Economies Can Revive Global Demand and Spur Growth

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With its vast workforce, strong growth and expanding purchasing power, South Asia will be the key to reviving global demand, Nirmala Sitharaman, Minister of State for Commerce and Industry of India, said at a session on Harnessing Regional Cooperation in South Asia at the World Economic Forum Annual Meeting. “The world cannot afford to ignore the region that will be key to reviving demand,” the minister said.

Despite the South Asian Association for Regional Cooperation (SAARC) annual summit being cancelled in 2016 because of a terrorist incident in India, Sitharaman said, it is important to remember that the South Asian Free Trade Agreement is still going strong and has achieved major gains in intra-regional trade in the past few decades. She cited border haats, or markets, on the India-Bangladesh border and the India-Myanmar-Thailand trilateral highway as other examples of increasing regional integration.

Prime Minister Sheikh Hasina of Bangladesh added that the India, Bangladesh, Bhutan and Nepal motor vehicles agreement signed two years ago is another sign of closer ties within South Asia. She said better connectivity of this kind will be an indispensable part of any strategy aimed at bringing nations and people together.

With 1.8 billion people, 7% GDP growth rate and 25% of the world’s middle class, South Asia offers trade and commerce that can improve people’s quality of life while also keeping the peace in a volatile region, the panellists agreed. Manvinder S. Banga, Operating Partner, Clayton, Dubilier & Rice, United Kingdom, said that as the world begins to de-globalize, there will be more opportunity for intra-regional trade within South Asia.

He added that countries must set aside political irritants and improve connectivity – a huge advantage for trade – as well as build common physical and social infrastructure, which can be a source of catalytic growth and enable countries to meet the common challenge of fighting hunger and poverty and providing education and healthcare to their people.

Business can help catalyse social infrastructure, particularly through digital technology, Banga said, citing the example of education where information technology offers the opportunity to transform educational reach while reducing the need for brick-and-mortar schools and teachers. Through digital technology, an entrepreneur needs much lower investment and even education to set up a business, Banga said. “There is an opportunity for digitally supported businesses at an unprecedented scale,” he added.

Mosharraf Zaidi, Founder and Campaign Director of Alif Ailaan – Time to End Pakistan’s Education Emergency, Pakistan, highlighted the need for better education for the under-25 population that gives South Asia its unparalleled demographic advantage over other regions. However, he warned that countries’ oversized emphasis on defence spending is leaving little to invest in building the region’s social capital.

Also underlying the discussion was the subtle acknowledgement that political issues such as state-supported terrorism and the legacy of mistrust between nations cannot be wished away.

Ranil Wickremesinghe, Prime Minister of Sri Lanka, admitted that Sri Lanka prefers to deal bilaterally with its larger trading partners outside South Asia as well as those within the region. Nevertheless, he said, intra-regional relations of various kinds continue to thrive between his country and other South Asian countries – such as the “camel trade” between southern India and Sri Lanka in which traders commute daily between the two places. “There is a crisis only when you stop playing cricket with each other,” he said on a lighter note.

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Human Rights

Famine risk spikes amid conflict, COVID-19 and funding gaps

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Mobile health clinics are distributing nutritional supplements to children in Yemen. WFP/Saleh Bin Haiyan

The impact of conflicts old and new, climate shocks and COVID-19, in addition to a lack of funding, have left millions more on the verge of famine than six months ago, the World Food Programme (WFP) said on Friday.

In an appeal for $5 billion “to avoid famine” and support the “biggest operation in its history”, WFP spokesperson Phiri Tomson said that millions of refugees faced “uncertainty and hunger” as the impact of the pandemic on emergency aid budgets became clearer.

“The number of people teetering on the brink of famine has risen from 34 million projected at the beginning of the year, to 41 million projected as of June”, he said. “Without immediate emergency food assistance, they too face starvation, as the slightest shock will push them over the cliff into famine conditions.”

From bad to worse

According to the latest IPC food insecurity assessments – which humanitarians use to assess needs on a scale of one to five – the 41 million “are people who are in IPC phase 4 – emergency”, the WFP spokesperson explained.

New refugee influxes linked to conflict and drought have increased needs for people in “IPC phase 5 – catastrophe” and “that number stands at 584,000 people”, Mr. Phiri continued. “These are people in Ethiopia’s Tigray region, Madagascar, particularly the southern part; South Sudan, especially as we are now at the height of the lean season in that country, and Yemen.”

‘Brutal choices’

Launching its Global Operational Response Plan, the UN agency highlighted operations in no less than eight countries and regions where it has had to make “brutal choices” because of significant funding shortfalls.

In practice, this has meant reduced rations “across east and southern Africa, as well as the Middle East…among some of the world’s most vulnerable people who rely on WFP to survive”, said Mr. Phiri.

“In some cases it’s 40 per cent, in some cases it’s 25 per cent, in some cases it’s 60 per cent…The fact is, the assistance we provide is a basic need, the assistance we provide is just enough to help people get by.”

West and Central Africa in crisis

For many vulnerable aid recipients in West and Central Africa, the COVID-19 pandemic has left them without the opportunity to work to supplement their rations and unable to pay for increasingly expensive staple foods. “Countries like Chad, Niger and Burkina, Mauritania; these are all countries of concern, including Sierra Leone as well,” said Mr. Phiri, after a warning by the UN agency that the world was no longer moving towards Zero Hunger.

“Progress has stalled, reversed, and today, more than 270 million people are estimated to be acutely food insecure or at high risk in 2021,” it said in a statement.

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Human Rights

Forced displacement at record level, despite COVID shutdowns

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Congolese asylum-seekers line up to undergo security and health screening in Zombo, near the border between Uganda and the Democratic Republic of Congo. © UNHCR/Rocco Nuri

The number of people fleeing wars, violence, persecution, and human rights violations, rose last year to nearly 82.4 million people, a further four percent increase on top of the already record-high of 79.5 million, recorded at the end of 2019.

According to the UN Refugee Agency flagship Global Trends Report published on Friday, the restrictive COVID-19 pandemic did not slow forced displacement around the world, and instead could have left thousands of refugees and asylum seekers stranded and vulnerable.

The new ‘one percent’

Despite COVID-related movement restrictions and pleas from the international community for a concerted global ceasefire, displacement continued to occur – and to grow. As a result, more than one percent of the world’s population – or 1 in 95 people – is now forcibly displaced. This compares with 1 in 159 in 2010.

The agency explains that while the full impact of the pandemic on wider cross-border migration and displacement globally is not yet clear, data shows that arrivals of new refugees and asylum-seekers were sharply down in most regions – about 1.5 million fewer people than would have been expected in non-COVID circumstances, reflecting how many of those seeking international protection in 2020 became stranded.

New and old crises

According to UNHCR, several crises – some new, some longstanding and some resurfacing after years – forced 11.2 million people to flee in 2020, compared to 11.0 million in 2019.

The figure includes people displaced for the first time as well as people displaced repeatedly, both within and beyond countries’ borders.

By the end of 2020, there were 20.7 million refugees under UNHCR’s mandate. Another 48 million people were internally displaced (IDPs) within their own countries.

Driven mostly by crises in Ethiopia, Sudan, Sahel countries, Mozambique, Yemen, Afghanistan and Colombia, the number of internally displaced people rose by more than 2.3 million.

When considering only international displacement situations, Syria topped the list with 6.8 million people, followed by Venezuela with 4.9 million. Afghanistan and South Sudan came next, with 2.8 and 2.2 million respectively.

Turkey continued to host the largest number of refugees with just under 4 million, most of whom were Syrian refugees (92%). Colombia followed, hosting over 1.7 million displaced Venezuelans.

Germany hosted the third-largest population – almost 1.5 million, with Syrian refugees and asylum-seekers as the largest group (44%). Pakistan and Uganda completed the top-5 hosting countries, with about 1.4 million each.

The COVID-19 crisis also hit the forcibly displaced hard, who faced increased food and economic insecurity as well as challenges to access health and protection services.

At the peak of the last year, over 160 countries had closed their borders, with 99 States making no exception for people seeking protection.

According to UNHCR, the dynamics of poverty, food insecurity, climate change, conflict and displacement are increasingly interconnected and mutually reinforcing, driving more and more people to search for safety and security.

A call to end the suffering

UNHCR is urging world leaders to step up their efforts to foster peace, stability and cooperation in order to halt and begin reversing nearly a decade-long trend of surging displacement driven by violence and persecution.

“Behind each number is a person forced from their home and a story of displacement, dispossession and suffering. They merit our attention and support not just with humanitarian aid, but in finding solutions to their plight”, reminded the UN High Commissioner for Refugees, Filippo Grandi.

In a statement, Mr. Grandi underscored that while the 1951 Refugee Convention and the Global Compact on Refugees provide the legal framework and tools to respond to displacement, a much greater political will is needed to address conflicts and persecution that force people to flee.

“The tragedy of so many children being born into exile should be reason enough to make far greater efforts to prevent and end conflict and violence,” he added.

Girls and boys under the age of 18 account for 42 percent of all forcibly displaced. They are particularly vulnerable, especially when crises continue for years.

New UNHCR estimates show that almost one million children were born as refugees between 2018 and 2020. Many of them may remain refugees for years to come.

Low rate of return

The agency emphasized that over the course of 2020, some 3.2 million internally displaced and just 251,000 refugees returned to their homes –a 40 and 21 percent drop, respectively, compared to 2019. Another 33,800 refugees were naturalized by their countries of asylum.

Refugee resettlement registered a drastic plunge with just 34,400 refugees resettled, the lowest level in 20 years – a consequence of a reduced number of resettlement places and COVID-19.

“Solutions require global leaders and those with influence to put aside their differences, end an egoistic approach to politics, and instead focus on preventing and solving conflict and ensuring respect for human rights,” urged Grandi.

The UN Refugee agency reminded that 2020 is the ninth year of uninterrupted rise in forced displacement worldwide. There are twice as many forcibly displaced people than in 2011 when the total was just under 40 million.

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Development

Financing to Support Reforms for Inclusive Growth and Development

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The World Bank approved the second in a series of three single-tranche Inclusive Growth Development Policy Operations (IGDPO) to support key reforms for enabling inclusive growth in Liberia.  The financing, amounting to $40 million, comes in the form of an International Development Association (IDA) concessional credit of $20 million and an IDA grant of $20 million to be disbursed as budget support. The underlying reforms being supported seek to remove distortions in selected sectors, strengthen public sector transparency, and promote economic and social inclusion.

“The continued implementation of critical policy reforms in sectors such as energy and agriculture helps create a conducive environment for transformative investments being made in these sectors by the Government, with support from development partners,” said Dr. Khwima Nthara, World Bank Liberia Country Manager.  

Building on reforms supported under the first reform program approved last year, the key reforms under this second program are expected to help increase agriculture productivity by promoting farmers’ access to certified seeds; reduce power theft and commercial losses at the Liberia Electricity Corporation (LEC) by making electricity affordable for the small consumers with the reduction in electricity tariffs for poor households from $0.385/kWh to $0.22/kWh in May 2021; streamline and increase the transparency of tax waivers and in turn, improve revenues to enhance the provision of public services, especially for poor households; strengthen the oversight and transparency of State-owned Enterprises (SOEs); promote financial inclusion through the amendment of the Payments Act and introduction of digital credit; and finally, create an efficient, transparent and sustainable Social Safety Net System.  

“Strengthening Domestic Revenue Mobilization, through reduction of duty waivers and tax holidays, is critical to expanding fiscal space for increased public investment that is domestically financed,” said Mamadou Ndione, World Bank Senior Economist and Task Team Leader of the IGDPO program.

The reform programs being supported are aligned with the Liberia’s Pro-poor Agenda for Prosperity and Development and the World Bank’s Country Partnership Framework.

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