The APEC region posted a 6.1 percent increase in economic growth in the first quarter of 2021, bouncing back strongly from a 2 percent decline in the first quarter of 2020, according to an updated report by the APEC Policy Support Unit. This number comfortably puts the region on track to achieve growth expectations for the year, which is now estimated at 6.4 percent, or slightly higher than the earlier prediction.
High growth in the first quarter of 2021 is due to a combination of factors, including the low comparison point following substantial economic contraction a year ago as well as higher government spending given the sustained impact of the pandemic on economic activities, while domestic consumption grew considerably during this period.
In the near term, the APEC Policy Support Unit still sees sustained stimulus measures from governments driving the region’s economic growth. Private consumption will also get a boost of confidence as consumers are expected to draw on their accumulated savings, bolstered in part due to cash transfers and wide-ranging subsidies to households.
“Vaccination programs and rollout still drive economic growth and the recovery progress in the region,” said Dr Denis Hew, Director of the APEC Policy Support Unit.
“We are still seeing a disparity in access to vaccination coverage across APEC; economies with faster rollouts and sustained fiscal support will recover faster and stronger, while economies that struggle with vaccine access and have limited fiscal space will take more time to recover due to these uncertainties,” explained Dr Hew.
Vaccination coverage across APEC is noticeably diverse, ranging from 148 doses per 100 residents to a low of only one dose per 100 residents. As a result, the rate of fully vaccinated people across economies varies greatly, from as low as 0.2 percent to as high as 72 percent of the population as of mid-August.
“The race to vaccinate as many people as possible in the shortest amount of time is extremely crucial,” said Rhea C. Hernando, an APEC Policy Support Unit researcher who updated the report. “Economies cannot afford to keep imposing restrictions, close borders and indefinitely provide wide-ranging fiscal and monetary support.”
Hernando explained that multilateral cooperation is key in facilitating the free flow of vaccine components and related supplies as this will significantly contribute to the accessibility and affordability of vaccines, especially for low- and middle-income economies.
“It is now clear that for economic recovery to be on firmer footing, health must be safeguarded, which in turn necessitates access to vaccines to protect as many people as possible, as soon as possible,” she added.
In terms of trade, the region performed positively in the first quarter of 2021, with the value of merchandise exports and imports growing at a higher rate of 16.8 percent and 16.2 percent, respectively, from a contraction of 6.1 for exports and 4.1 percent for imports during the same period last year. This improved performance is brought mainly by pharmaceuticals and office and communications equipment, while the agrifood, apparel, metals and minerals sectors also added to the trade boost.
The unfaltering impact of COVID-19 on the transport and travel sectors continues to drag APEC’s commercial services performance. For the period January to March 2021, commercial services declined further to 12 percent for exports and 15.2 percent for imports, compared to a decline of 9.5 percent for exports and 9.2 percent for imports for the same period in 2020.
The updated report also notes an increase in inflation during the first half of 2021 to 2.3 percent, compared to 1.6 percent in the first half of 2020, due to the gradual normalization of prices. Inflation is expected to revert to its pre-pandemic levels globally once prices factor in pandemic-related supply-side disruptions.
The whole-year forecast of inflation for the APEC region is 2 percent while it could increase to 2.2 percent in 2022. There is a risk that the upward trend in inflation could persist as consumption activity strengthens following successive quarters of pent-up demand. The report notes that price pressures require continued monitoring and clear communication from monetary policy authorities to guide inflation expectations.
“Addressing the ongoing health crisis, primarily through rapid vaccination rollouts even as appropriate health measures continue to be observed, remains paramount to strengthen economic recovery,” Hernando concluded. “When people feel safe, they are more confident to go out, work and spend accumulated savings while business could resume investment activity, supporting a gradual but uninterrupted economic reopening toward a stronger recovery.”
Global Policy-makers Face Complex Set of Divergent Economic Challenges in Coming Year
From the impact of a new COVID variant to continued inflation, governments will continue to face economic challenges in 2022. In a session on the global economic outlook, policy-makers outlined their immediate and long-term actions to stabilize the global economy to business, government and civil society leaders taking part in the World Economic Forum’s virtual event, the Davos Agenda.
Kristalina Georgieva, Managing Director of the International Monetary Fund, emphasized that the response to the pandemic crisis has been anything but orthodox. “In a highly coordinated fashion, the world central banks and fiscal authorities have prevented the world falling into another great depression,” she said.
“Policy flexibility is critical in 2022 – persistent inflation, record fiscal debt levels and COVID-19 combine to present a complex obstacle course for policy-makers,” she added. In particular, vaccination rates represent a dangerous divergence between countries; more than 86 countries did not meet end-of-year vaccination targets.”
Georgieva expects the economic recovery will continue in 2022, but she cautioned: “It is losing momentum amid persistent inflation and record debt levels which now exceed $26 trillion.” More than 60% of developing countries are heading towards debt distress”, she said, more than twice as many as a few years ago.
Christine Lagarde, President of the European Central Bank, said that during the COVID-19 crisis, monetary and fiscal policies joined hands to respond exceptionally to the pandemic. “In Europe, so far, we are not seeing inflationary pressure spiral out of control. We see wages and energy prices stabilizing from the middle of the year as bottlenecks reduce and wage inflation normalizes.”
She added: “In Europe we are unlikely to see the kind of inflation increases that the US is experiencing; demand and employment participation are only just returning to the pre-pandemic levels.” She stressed that “Europe is stronger and more united than it was before the pandemic and we will act if we need to.”
Kuroda Haruhiko, Governor of Bank of Japan, said Japan has been relatively successful in minimizing the death rate from COVID-19, although the economic recovery is still lagging. “Public sector debt in Japan is now well over 200% of GDP,” he said, “but the government projects a primary surplus from 2025, hence thereafter public debt should decline.”
He was optimistic about progress so far. “The Bank of Japan’s accommodative monetary policy has been working well and the Japanese economy is now emerging from the spectre of 15 years of deflation.” He went on to say: “In Japan we expect an inflation rate of about 1% in 2022 and the Bank of Japan will continue our stimulative monetary policy”
Sri Mulyani Indrawati, Minister of Finance of Indonesia, revealed that the country should see a strong recovery in 2022. “To build on this, we are expecting more than 1% of additional GDP growth from a series of recent reforms.”
She said that Indonesia is the largest economy in the ASEAN region but “it is vulnerable to a dependence on commodities – the emphasis now is on value-added activities”. She added: “We are improving Indonesia’s investment environment with a comprehensive reform package on tax, regulation and incentives.”
Paulo Guedes, Minister of Economy of Brazil, said his country’s economy is bouncing back strongly and economic output is already above the pre-pandemic level.
“Do not underestimate Brazil’s resilience,” he said. “The country’s debt to GDP ratio has stabilized at around 80%, well less than widespread fears that debt/GDP could exceed 100%.” He pointed out that more than 3 million new jobs were created in 2021 and the government has assisted 68 million Brazilians with direct income transfers.
He was less upbeat about inflation. “Central Bankers are asleep at the wheel – inflation will be a persistent problem for the western world. Inflationary pressures will not be transitory.”
Afghanistan: 500,000 jobs lost since Taliban takeover
More than half a million people have lost or been pushed out of their jobs in Afghanistan since the Taliban takeover, the UN International Labour Organization (ILO) said on Wednesday.
In a warning that the economy has been “paralyzed” since the de facto authorities took control last August, ILO said that there have been huge losses in jobs and working hours.
Women have been hit especially hard.
By the middle of this year, it’s expected that job losses will increase to nearly 700,000 – with direst predictions topping 900,000 – as a result of the crisis in Afghanistan and “restrictions on women’s participation in the workplace”.
Women’s employment levels are already extremely low by global standards, but ILO said that they are estimated to have decreased by 16 per cent in the third quarter of 2021, and they could fall by between 21 per cent and 28 per cent by mid-2022.
“The situation in Afghanistan is critical and immediate support for stabilization and recovery is required,” said Ramin Behzad, Senior Coordinator of the International Labour Organization (ILO) for Afghanistan. “While the priority is to meet immediate humanitarian needs, lasting and inclusive recovery will depend on people and communities having access to decent employment, livelihoods and basic services.”
Hundreds of thousands of job losses have been seen in several key sectors which have been “devastated” since the takeover, ILO said.
These include agriculture and the civil service, where workers have either been let go or left unpaid. In construction, the sector’s 538,000 workers – of which 99 per cent are men – have suffered too, as major infrastructure projects have stalled.
The Taliban takeover has also led to “hundreds of thousands” of Afghan security force members losing their job, said ILO, noting that teachers and health workers have been deeply impacted by the lack of cash in the economy, amid falling international donor support.
As the crisis continues to unfold, ILO explained that the Taliban capture of Kabul on 15 August, threatened hard-fought development gains achieved over the past two decades.
Domestic markets have been “widely disrupted”, the UN agency said, while productive economic activity has dropped, which has in turn driven up production costs.
At the same time, because Afghanistan’s reported $9.5 billion in assets have been frozen, “foreign aid, trade and investment…have been severely impacted”, ILO continued, pointing to cash shortages and restrictions on bank withdrawals, causing misery for businesses, workers and households.
Kids pay price
The lack of work also threatens to worsen child labour levels in Afghanistan, where only 40 per cent of children aged five to 17 years old attend school.
In absolute numbers, ILO noted that there are more than 770,000 boys and about 300,000 girls involved in child labour.
The problem is worst in rural areas – where 9.9 per cent, or 839,000 children – are much more likely to be in child labour compared to those in urban areas (2.9 per cent or 80,000).
To support the Afghan people this year, the UN’s top priorities are to provide lifesaving assistance, sustain essential services and preserve social investments and community-level systems which are essential to meeting basic human needs.
In support of this strategy, the ILO has pledged to work with employers and trade unions to promote productive employment and decent work.
The organisation’s focus is in four key areas: emergency employment services, employment-intensive investment, enterprise promotion and skills development, while respecting labour rights, gender equality, social dialogue, social protection,elimination of child labour and disability inclusion.
Construction PPE: What and when to use
Personal protective equipment is essential for construction sites. Every workplace has hazards – from offices to classrooms. However, a construction site has far more hazards than most, and extra caution must be applied. PPE can help keep everyone safe and secure, even when close to a hazard factor. Your employer should provide high-quality PPE to everyone on site. When selecting equipment, use a construction PPE supplier that is CE marked.
How to use PPE
Personal protective equipment is designed to protect you from potential hazards. For example, face masks and eye goggles are worn around toxic chemicals or contaminated air. PPE must fit correctly to be as efficient and safe as possible. A loose-fitting face mask could allow dust particles to squeeze through the gaps. Or ill-fitting thermal trousers could get caught/snag on edges or trail along the ground and cause the worker to fall over. Your PPE needs to be in good condition as well – If there are holes, rips and signs of wear on your PPE, it should be immediately replaced. It is your employer’s responsibility to provide adequate PPE.
PPE is a last resort
PPE is not the only safety measure that needs to be taken. Your employer should reduce the risks on site where possible. For example, a hazardous area should be signposted, and every employee should be trained properly. Every employee should go through health and safety training alongside frequent refresher courses. All employees should be trained in using the machinery on site before they begin operating it. PPE cannot protect someone who does not know how to act safely on site.
What types of PPE are used on-site?
Protective gloves should be worn when handling heavy machinery and sharp tools. The gloves need to allow enough mobility and flexibility so the individual can continue to work. Gloves can also help you grip heavy items and protect you from cold winter conditions.
A tool lanyard is useful for when you are working at a height. The lanyard connects to your wrist so you can carry lightweight tools. For heavier tools, you can use a stronger tether point, like your waist.
High – visibility clothing should be mandatory when working, especially at night. Everyone should wear high visibility clothing on-site, so they are noticeable by moving vehicles. Depending on the weather, you could go for a vest or thick coat.
Stay safe and wear personal protective equipment on construction sites.
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