Putting East Asia and the Pacific on a Path to Recovery from the COVID-19 Crisis  

KEY HIGHLIGHTS

• $1.9 billion committed across 18 COVID-19 health response projects in the EAP region between April 2020 and October 2022.
• 33 million vaccine doses provided to the Philippines (13 percent of total vaccine supply in the country).
• Vaccines procured to vaccinate up to 66 percent of the total population with two doses in Mongolia.
• 76 percent of population fully vaccinated in the Lao PDR with support from the World Bank and other partners.
• 60 million suspected cases were tested, and 6 million COVID-19 cases successfully treated in Indonesia, of whom 51 percent were female.

Challenge

The COVID-19 Pandemic: Disrupting Lives, Reversing Development Gains

The East Asia and Pacific region (EAP) was the first to be impacted by COVID-19, and among the hardest-hit. The World Bank estimated that the COVID-19 shock would increase the number of people living in poverty in the region by 38 million in 2020—including 33 million who would have otherwise escaped poverty, and another 5 million who would be pushed back into poverty—using a poverty line of $5.50/day (2011 PPP).

The region saw dramatic and widespread declines in sales and employment. Firm sales in some EAP countries were 38 percent to 58 percent lower in April and May 2020, compared with the same months in the previous year. The pandemic is expected to have a lasting impact on productivity growth as business indebtedness and increased uncertainty inhibit investment, and firm closures and unemployment lead to a loss of valuable intangible assets. Small and medium enterprises (SMEs) were particularly affected, both because they were more vulnerable to the crisis and because they are generally less able to adapt than larger firms, have more limited access to finance, and are disproportionately reliant on a few key customers. The monthly sales of SMEs fell by 7 to 24 percentage points more than those of larger firms in EAP countries from May to July 2020. Globally, many countries were deeply impacted by the health and economic double shock of COVID-19. Before these countries could recover, Russia’s war in Ukraine caused a new series of destabilizing shocks, which have added to existing inflationary pressures, and are placing additional burdens on these countries and their health systems. In the EAP region as elsewhere, rising debt stress poses a threat to many countries’ capacity to invest in health and, ultimately, to their prospects for equitable economic growth.

COVID-19 also caused significant learning losses in the region; school closures could result in a loss of 0.7 learning-adjusted years of schooling in EAP countries. As a result, the average student in the region could face a reduction of 4 percent in expected earnings every year of their working lives.

Approach

Fast Tracking a Regional Response, Repurposing Existing Projects

Since April 2020, the World Bank has deployed over $157 billion to fight the health, economic, and social impacts of the pandemic, the fastest-moving and largest crisis response in its history. This financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jumpstart a climate-friendly recovery. In EAP, the World Bank supported a number of emergency operations through the COVID-19 Fast-Track Facility to address the pandemic’s severe economic, social, and poverty impacts. These included financing for the purchase of medical and laboratory supplies, training of medical staff, and strengthening national public health systems. A Multiphase Programmatic Approach (MPA) supported health dialogue, deepened the early response to COVID-19, and then expanded to develop early access to vaccines and planning for the strengthening of health systems. 

The World Bank also worked to redeploy existing EAP projects, reallocating funds by triggering the Contingent Emergency Response Components (CERCs) of existing projects, and activating Catastrophe Deferred Drawdown Options (CAT DDOs), in countries including Cambodia, the Federated States of Micronesia, Mongolia, the Philippines, Tonga, Tuvalu, Samoa, and Vanuatu. In a second phase of the COVID-19 response, to address the pandemic’s severe economic, social, and poverty impacts, the World Bank worked with EAP countries to strengthen social protection measures for the poor and vulnerable; support businesses and safeguard jobs; and advance reforms needed to shorten the time to recovery and build conditions for broad-based and sustainable growth. 

Results

Responding to the Pandemic, Building Social and Economic Resilience

Various countries in EAP supported through the World Bank’s emergency response initiatives saw strong results. The World Bank has committed $1.93 billion in the EAP region across 18 COVID-19 health response IBRD/IDA projects and Trust Fund grants, between April 2020 and October 2022. An additional $40.5 million was reallocated through CERCs of existing projects and activating CAT DDOs in countries such as Cambodia, Samoa, Tonga, and Vanuatu.

The Indonesia Emergency Response Project reported that as of February 2023, 6 million cases of COVID had been successfully treated, and 60 million suspected cases tested through rapid molecular testing. With the World Bank’s support, the Ministry of Health trained over 176,000 vaccinators during the height of the pandemic in 2020 and 2021. In the Lao People’s Democratic Republic (Lao PDR), the COVID-19 Response Project contributed to the full vaccination of 76 percent of the population in less than two years and strengthened the capacity of national disease surveillance and testing throughout the country, with 94 percent of COVID-19 testing samples reported within 48 hours of testing. The project also established 24 acute health facilities with isolation centers, which had not existed prior to the World Bank support. Having received adequate donations of COVID-19 vaccines from other sources, Lao PDR was one of the first countries to reallocate funds marked for their purchase to non-COVID-19 vaccines and essential drugs, thereby filling critical gaps in essential service availability. 

Support for Cambodia enabled the upgrade of national, regional, and provincial laboratory capacity for testing; the supply of equipment and consumables needed for treating severe cases; improved infection prevention and control; the equipping of emergency operating centers at all provincial health department offices and the Ministry of Health; support for referral; improvements that increased the capacity of the national hotline; and supply of cold chain equipment for the transportation and storage of vaccinations. Indonesia, Lao PDR, Mongolia, and the Philippines received support for the purchase or distribution of COVID-19 tests, treatments, and vaccines. In Vietnam, through a grant from the Pandemic Emergency Financing Facility, the World Bank helped ramp up testing capacity for 84 laboratories nation-wide, cutting the turnaround time from 24 to 48 hours to four to six hours. 

Myanmar’s COVID-19 Emergency Response Project was on track to achieving its aims prior to the military coup of February 2021. The project supported the procurement and installation of critical medical equipment and supplies for 65 hospitals, which was contracted out to the United Nations Office of Project Services (UNOPS) by the Ministry of Health to strengthen COVID-19 surveillance, treatment, and response. Despite the extremely challenging context and a pause in disbursements across the lending portfolio, UNOPS was able to continue implementation through March 2022. In total, 775 out of 838 units of COVID-19 response equipment and medical devices were delivered to the final destinations, and installation and training services have been completed among 676 of the delivered units.

The World Bank supported a number of small island developing states in the Pacific throughout the pandemic, including Fiji, Kiribati, the Marshall Islands, the Solomon Islands, and Samoa. In Fiji, the World Bank approved funding of $7.4 million to support the government in strengthening its health systems, with improved connectivity for health facilities throughout Fiji, the provision of personal protective equipment, and intensive care unit beds and ventilators. In the Marshall Islands, World Bank-financed project activities directly contributed to the government’s swift and effective response; with a fatality rate of 0.11 percent, the Marshall Islands has one of the lowest COVID-19 case fatality rates in the world. In Samoa, the World Bank supported the government’s efforts to safeguard against future pandemics, training public health surveillance personnel for case detection, outbreak investigation, contact tracing and monitoring, and the design of a public health laboratory for human and animal health.

To counter the impacts on poverty and job losses across the region, the World Bank stepped up its investments in human capital, working with governments to scale up social protection programs. The Philippines was hit particularly hard by COVID-19. Gross domestic product (GDP) contracted 9.5 percent in 2020, driven by significant declines in consumption and investment growth, and exacerbated by the sharp slowdown in exports, tourism, and remittances. Many people lost jobs and experienced food shortages and difficulties accessing health care. The World Bank focused its response on community engagement, redeveloping dialogue with the government to strengthen health systems, and expanding social protection for vulnerable groups.

At the onset of the pandemic, the World Bank helped the government of the Philippines to expand existing cash transfer support to provide monetary and food support to vulnerable households, including people with disabilities, Indigenous persons, and migrant workers. The support targeted 4.4 million households in which at least 85 percent of the recipients were women. The government also fast-tracked the use of digital payment and verification systems and links to the national identification system to improve coverage of vulnerable households and build longer-term capacities for managing emergency assistance. The long-running KALAHI Disaster Response Operations Modality Project was adjusted to provide cash transfers to protect populations during the COVID-19 pandemic, including for employees who lost their jobs and returned to their communities and support for community-run projects focused on building local resilience during the pandemic, such as communal gardens and cleaning of facilities.

A Multiphase Programmatic Approach (MPA) supported health dialogue, deepened the early response to COVID-19, and then expanded to develop early access to vaccines and planning of health systems strengthening. In addition to support for procurement and deployment of 33 million doses of vaccines, 13 percent of the total number of doses the Philippines received, World Bank support funded purchases of emergency medical and laboratory equipment and supplies, ambulances, and civil works, including the construction of negative pressure rooms for frontline health facilities.

Data Highlights 

Partnerships 

A Broad Coalition for a Multi-faceted Response

The World Bank collaborated with a range of partners in its support to EAP countries grappling with the impacts of COVID-19, including the multilateral COVAX initiative, other multilateral development banks, international agencies, and donor governments like Australia, New Zealand, and the United States. It worked with the Asian Development Bank (ADB), the Asian Infrastructure and Investment Bank (AIIB), and directly with the World Health Organization (WHO) on project preparation and vaccine financing, as well as with the United Nations Children’s Fund (UNICEF), the Global Alliance for Vaccines and Immunization (GAVI), and other partners to procure related supplies and deploy vaccines. 

Looking Ahead 

A Global Roadmap for Cross-border Crises

The World Bank’s EAP Economic Update released in April 2023 indicates that most major economies in EAP have recovered from recent shocks, including the COVID-19 pandemic, and are growing, with exports and private consumption on the rise. In Vietnam and China, GDP per capita was 14 and 11 percent higher, respectively, in 2022 than it was in 2019. For the same period, Indonesia, the Marshall Islands, and Timor-Leste’s GDPs increased between 5 and 9 percent. However, output remains below pre-pandemic levels in most Pacific Island countries. The Evolution Roadmap for evolving the World Bank’s mission, operations, and financial model prioritizes urgent action to address the growing crisis of poverty and economic distress, and global challenges, including climate change, pandemic risks, and rising fragility and conflict. This requires an approach that can support long-term development at greater scale in low-and middle-income countries, while recognizing the increasingly cross-border nature of the challenges.