While the digital revolution has already brought many benefits to Southeast Asia, the region has a unique opportunity to achieve even faster progress by reinforcing the foundations of its growing digital economy. To realize this vision, a new World Bank report, The Digital Economy in Southeast Asia – Strengthening the Foundations for Future Growth, analyzes the opportunities and challenges facing the region to scale up digital development, and for ensuring the economic and social dividends of technology can reach everyone.
“Every sector of the economy in ASEAN countries can do more to use digital technologies and smarter business models. To help our private sectors governments also need to transform themselves: to use technologies such as data analytics and intelligent systems, develop our digital platforms and harmonize our approaches to regulatory procedures particular for cybersecurity, digital identity, and data management. We should work towards a regional digital market,” said H.E. Dr. Pichet Durongkaveroj, Minister of Digital Economy and Society.
“Southeast Asian countries has made significant headway in the digital sector,” said Boutheina Guermazi, the World Bank’s Director for Digital Development. “But even though the population has embraced digital services, adoption by businesses and governments has generally been slower. Regulatory bottlenecks and a lack of trust in electronic transactions stifle the growth of digital systems. This groundbreaking research can help ASEAN countries overcome these challenges to create strong, inclusive digital economies.”
The report identifies six main areas of focus for digital development in Southeast Asia, starting with the expansion of connectivity, the backbone of the digital economy. Although half of the region’s population uses the internet—on par with the global average—this can continue to be expanded with policies and actions that will significantly lower prices, increase speeds, and bring reliable broadband internet to underserved areas. In middle income countries in this region only 2 out of 5 people have access to high speed (4G) mobile internet—in lower income countries it’s only 1 out of 5. Active collaboration between the public and private sectors and proactive regulatory approaches will be critical to unlocking the needed investments in digital infrastructure and fostering greater competition across the telecommunications sector.
With digital technology transforming almost all sectors of the economy, the skills of the region’s workforce need to keep pace. Education systems will have a key role to play in developing the technical knowledge and soft skills that are required to compete in the global digital economy. Given the rate of technological change, adaptability and lifelong learning will be more important than ever, as well as more effective collaboration between the public and private sectors.
Digital payments are another essential underpinning of the digital economy, but the report finds that they remain underdeveloped in Southeast Asia compared to other parts of the world. In most countries in Southeast Asia, payments are overwhelmingly cash based. The World Bank’s global financial inclusion (findex) data shows that only 19 percent of financial account holders in the region access their accounts via the internet. Implementing robust regulations and modern digital identification systems can help create the enabling environment for digital finance. At the same time, the digitization of government payments—for pensions, cash transfers, and other social programs—can incentive more change and generate momentum.
The report stresses however that Southeast Asia’s digital development cannot rely solely on virtual foundations. A well-functioning logistics sector is crucial to the growth of the digital economy, especially e-commerce. In the region, a modernized regulatory framework for logistics could increase competition, reduce logistics costs and improve the quality of services. In particular, streamlining customs procedures can make shipping faster, cheaper, more predictable, and give e-commerce a major boost.
Likewise, regional integration, including harmonizing regulations and facilitating transactions between ASEAN countries, can create an integrated digital market benefiting both businesses and consumers.
Finally, to address the risks and vulnerabilities that come with digital transformation, the report suggests prioritizing effective standards and regulations for electronic transactions, cross-border data flows, cybersecurity, data privacy, and consumer protection. Solid measures in these areas are essential to build trust in online platforms and create secure, sustainable digital economies.
Smarter Food Policy Could Boost Health and Economic Recovery of Asian Cities
Across the world, the COVID-19 pandemic has highlighted the critical importance of reliable food systems that provide healthy and affordable diets to all. That is true also in Asia where cities, large and small, contend with a wide range of food-related issues on a daily basis but often lack a dedicated or coherent set of food policies.
Arguing that food systems are central to the topmost priorities of Asian cities, from nurturing jobs and businesses that are core to a city’s identity to managing waste and congestion, a new World Bank book calls for cities to “get smart to get RICH”—that is, to pursue policies that foster reliable, inclusive, competitive, and healthy (“RICH”) food systems that are better aligned with cities’ contemporary challenges and aspirations.
“RICH Food, Smart City seeks to put food on the menu of urban decision-makers in Asia to generate positive feedback loops between healthy people, a healthy planet, and healthy economies,” said Martien van Nieuwkoop, Global Director of Agriculture and Food, World Bank.
Based on the first systematic survey of urban food policies in 170 Asian cities in 21 countries, undertaken in partnership with the UN Food and Agriculture Organization, the study finds that only 8% of surveyed cities are “food-smart”—intervening in the food system in ways that are forward-looking, holistic, and inclusive. Nearly three-fourths are either at an early stage of effective engagement or fully in reactive mode, responding to problems as they emerge. A reactive approach could prove very costly, both in terms of realized risks and missed opportunities.
The COVID-19 pandemic has served to highlight the essential functions of urban food supply chains and businesses and the vulnerability of urban populations to food insecurity. Even before lockdowns and other responses to the pandemic impacted people’s purchasing power and disrupted supply chains, many residents of cities, especially low-income ones, faced challenges accessing safe, affordable, and nutritious food. In 2016, some 23 percent of urban residents in emerging Asia surveyed by the FAO reported being food insecure. Chronic malnutrition is similarly widespread. More than one-quarter of children under five are stunted in urban Bangladesh, Bhutan, India, Lao PDR, Nepal, and Pakistan, indicating that shortcomings in urban food systems could curtail the economic prospects of many Asian cities and their youngest generation.
Moving from a reactive approach to a more proactive management of food systems holds considerable promise for urban policy makers wishing to make progress on issues that matter to citizens, from food safety and affordability to good health, job opportunities, freedom from pollution and congestion, prosperity, and livability. Asia’s growing middle class and its demand for higher quality, more diverse, and convenient foods also provides enormous business, employment and revenue-raising opportunities for cities.
However, risks associated with urban food systems and changing demand patterns will need to be managed carefully. These include risks related to disease, biosafety, and environmental degradation. In 2017, the proportion of deaths attributed to dietary risks reached 30 percent in East Asia, 22 percent in Southeast Asia, and 19 percent in South Asia, according to the Global Burden of Disease. Overweight and obesity levels are growing nationally, and obesity prevalence tends to be three or four times higher in urban areas than in rural ones.
Many cities in emerging Asia are national if not international ‘hotspots’ for biosecurity and food safety risks, food waste, and the accumulation of plastic packaging waste. The rapid encroachment of cities into natural ecosystems and peri-urban cropland also raises risks to cities’ fresh food supply. Well-informed urban leadership is much needed to turn these urban, national, and even broader food system challenges around.
RICH Food, Smart City argues that city leaders and planners have a key role to play in molding the future trajectory of food systems and offers many examples of how they might do so. The study addresses cities of different sizes and resource levels, presents a menu of potential solutions, and provides concrete illustrations of the many policies and programs that Asia’s cities can learn from and implement to improve food system outcomes. For example,
- Measures to protect peri-urban cropland and develop short supply chain marketing channels can sustain a critical source of fresh produce to cities, contributing to urban productivity, resilience, and circular economies.
- Investments in upgrading community markets that provide fresh food can help ensure more equitable access to nutrition and reduce the incidence of foodborne and chronic illness.
- Neighborhood food loss and waste partnerships and initiatives can support waste prevention, secondary food use, composting, and the bioeconomy.
- Institutional food procurement and marketing standards, paired with technical support to food businesses, can exert significant influence over food markets and dietary patterns in ways that support public health and welfare, the environment, and local economies.
With their power to influence the uses of space and the built environment, to regulate and stimulate private enterprise, and to shape public service delivery, cities’ embrace of food policy can be game-changing, according to the book.
“Municipal leaders are uniquely placed to develop and pursue integrated food policies that respond to citizens’ needs and boost cities’ overall resilience” said Gayatri Acharya, study co-author and Lead Economist, World Bank. “We hope this study will inspire them to seek ambitious solutions for sustainable and healthy food systems that improve the welfare of urban populations.”
Sustainable infrastructure can drive development and COVID-19 recovery
Zimbabwe has long struggled with crippling power outages, some of which can last up to 18 hours a day. The cuts have been especially hard on the country’s hospitals and clinics, forcing nurses to deliver babies by candlelight and doctors to postpone emergency surgeries.
But that is starting to change. Since 2017, Zimbabwe has installed solar panels atop more than 400 healthcare facilities, steadying power supplies and replacing expensive and polluting diesel-fired generators. The “Solar for Health” initiative is a prime example of the type of sustainable infrastructure development that will be vital to combating climate change, improving public services and driving the economic recovery from COVID-19.
So says a new report from the United Nations Environment Programme (UNEP). It urges planners and policymakers to take a more systematic approach to sustainable infrastructure, incorporating it into their long-term development plans and ensuring human-made systems work with natural ones.
“We can no longer use the business-as-usual approach to infrastructure, which is leading to ecological destruction and massive carbon dioxide emissions. Investments in sustainable infrastructure are not only environmentally sound but also bring economic and social benefits. Low-carbon, nature-positive infrastructure projects can help minimize the sector’s environmental footprint and offer a more sustainable, cost-effective path to closing the infrastructure gap,” said Inger Andersen, Executive Director of UNEP.
A source of emissions
Built infrastructure, which includes everything from office blocks to highways to power plants, is responsible for 70 per cent of all greenhouse gas emissions, mentions the report, the International Good Practice Principles for Sustainable Infrastructure. Poorly designed, infrastructure can also displace communities, endanger wildlife and weigh, often for decades, on public finances.
“There is an urgent need to include sustainable and climate resilient infrastructure as an integral part of green growth to deliver energy, water, and transportation solutions that will facilitate opportunity, connection, and sustainable growth,” said Ban Ki-moon, former United Nations Secretary-General and the President of the Global Green Growth Institute, a UNEP partner.”
Ban said the new report is a “very useful guiding framework for governments to lay the groundwork for a future where sustainable infrastructure is the only kind of infrastructure we know.”
To help countries reach that goal, the new UNEP report offers guiding principles for governments to integrate sustainability into their decision making on infrastructure. Among other things, it recommends that states align their infrastructure planning with the United Nations Sustainable Development Goals, humanity’s blueprint for a better future. It also urges them to minimize the environmental footprint of construction projects and meaningfully engage local communities in infrastructure decision making.
Return on investment
The report also highlighted the economic return on sustainable infrastructure, which includes renewable energy plants, eco-friendly public buildings and low-carbon transport. Investing in renewables and energy efficiency, it said, creates five times more jobs than investments in fossil fuels. Similarly, investing in resilient infrastructure in developing countries can create a return of US$4 for every US$1 invested, according to the World Bank.
In Ecuador, the government has turned to nature-based solutions to bolster water supplies to several major cities. By replanting trees, fencing off rivers and purchasing land for conservation, one region has revived watersheds that support more than 400,000 people.
In Singapore, which is aiming to have 80 per cent of its buildings certified as green by 2030, builders have used recycled materials to construct everything from schools to corporate offices. (The country was the first to unveil a building constructed entirely of recycled concrete aggregate and demolition waste.)
With COVID-19 sparking a global wave of stimulus spending, Ambroise Fayolle, Vice President of the European Investment Bank said the publication of the principles “is timely, reminding us all of the importance of building back better by tackling the long-term challenges we face.”
COVID-19 is reversing the important gains made over the last decade for women
Progress for women in work could be back at 2017 levels by the end of 2021 as a result of the COVID-19 pandemic, according to analysis conducted for PwC’s annual Women in Work Index, which measures female economic empowerment across 33 Organisation for Economic Cooperation and Development (OECD) countries*. The evidence emerging globally is that the damage from COVID-19 and government response and recovery policies, is disproportionately being felt by women.
For nine years, countries across the OECD* made consistent gains towards women’s economic empowerment. However, due to COVID-19 this trend will now be reversed, with the Index estimated to fall 2.1 points between 2019 and 2021, according to analysis undertaken for PwC’s annual Women in Work Index. The Index will not begin to recover until 2022, where it should gain back 0.8 points.
In order to undo the damage caused by COVID-19 to women in work – even by 2030, progress towards gender equality needs to be twice as fast as its historical rate.
Bhushan Sethi, Joint Global Leader, People and Organization at PwC, said:
“The setbacks that we are experiencing with COVID-19 in terms of the workforce tell a worrisome story. While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work. This has increased during the pandemic, and it is limiting women’s time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors – such as accomodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”
Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7% in 2019 to 7.4% in 2020). In the US, the female unemployment rate increased sharply from 4% in March 2020 to 16% in April 2020. The female unemployment rate stayed high for the remainder of 2020, ending the year in December 2020 at 6.7%, 3 percentage points higher than in December 2019. In the UK, the full impact of job losses from COVID-19 is yet to be realised due to job retention schemes, but furlough data shows that women are at greater risk of losing their jobs when these schemes come to an end. Between July and October 2020, a total of 15.3 million jobs were furloughed in the UK. For furloughed jobs for which gender was known, 52% of these were women’s jobs, despite women only making up 48% of the workforce.***
The disproportionate burden of unpaid childcare falls on women
Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During COVID-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men** – this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job.
This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy.
While some women may choose to leave the workforce temporarily due to COVID-19 with the intention to return post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects, and women will return to lower paid and lower skilled positions.
PwC Women in Work 2021 Index (performance prior to COVID-19 pandemic)
Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84%), has a small participation rate gap (5%), and even smaller female unemployment rate (3%).
Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.
New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment.
If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6 trillion per annum. The US, with one of the highest female unemployment rates, is expected to gain the most – as much as US$1.7 trillion per annum.
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