JAKARTA (REUTERS) - South-east Asia is on the brink of a "socio-economic crisis" caused by the Covid-19 pandemic that could reverse decades of poverty reduction, the United Nations has warned.
"The crisis threatens to destroy the livelihoods of South-east Asia's 218 million informal workers," a UN policy brief released on Thursday (July 30) said.
"Without alternative income, formal social protection systems or savings to buffer these shocks, workers and their families will be pushed into poverty, reversing decades of poverty reduction."
The region-wide economy was expected to contract by 0.4 per cent in 2020, it said, while remittances from South-east Asians working abroad were likely to fall by 13 per cent or US$10 billion (S$13.8 billion).
The paper urged nations to fix "fiscal termites": budget-sapping problems like tax evasion, transfer pricing and fossil fuel subsidies so they can deliver large stimulus packages to help vulnerable populations and boost their economies.
Current low oil prices provided an ideal opportunity to reverse fossil fuel subsidies, it added.
In Indonesia, the region's most populous country, fossil fuel subsidies in 2020 will exceed its entire Covid-19 social assistance and stimulus measures, the UN report said.
As well as boosting social welfare payments, South-east Asian nations should prioritise higher health spending, said Armida Salsiah Alisjahbana, head of the UN Economic and Social Commission for Asia and the Pacific.
Six of the 11 countries in the region - including its two biggest nations, Indonesia and the Philippines - received the lowest rating for health spending on the UN's five-tier human development index. Three others were on the second-lowest tier and the remaining two were on the middle tier.
The report covered the Philippines, Vietnam, Laos, Cambodia, Thailand, Brunei, Malaysia, Myanmar, Singapore, Indonesia and Timor-Leste.