‘Huge gap’ on vaccine access cramps Asia rebound, ADB chief says

Coronavirus vaccine roll-outs have been delayed throughout Southeast Asia, including the Philippines. — Photo by Michael Varcas, The Philippine Star

A “huge gap” between demand and supply of vaccines is threatening the rebound across developing Asia, according to Asian Development Bank President Masatsugu Asakawa.
“We need to invest more in vaccine manufacturing companies in the region to expand the production function,” Asakawa said in the Bloomberg Television interview with Haslinda Amin.

The ADB has made progress in providing financing to help the vaccine production, Asakawa said. A $9 billion financing instrument approved in December — the Asia Pacific Vaccine Access Facility, or APVAX — has approved four constituencies for funding: Indonesia, Philippines, Afghanistan and South Pacific islands.

Delays in vaccine roll-outs across the region and the constant threat of virus resurgences top a list of “many, many downside risks,” he said. The ADB earlier this week boosted its economic outlook for developing Asia to 7.3% growth this year — better than its 6.8% December estimate — after a 0.2% contraction in 2020.

Growth will rebound this year on base effects but also led by the “two giants” of China and India, he said in the interview.

Asakawa also expressed concern about the accumulation of debt in the region, stemming from necessary stimulus to mitigate pandemic effects.

“The resulting accumulation of public debt, especially if it’s denominated in U.S. dollars, is our concern” since U.S. policy normalization could lead to significant capital outflows and currency shocks, he said.

Among other priorities for recovery spending, Asakawa noted a critical need to “invest in human beings” via health and education.

Green infrastructure is another ADB priority, with Asakawa citing a goal to provide $80 billion in climate financing between 2019 and 2030. Governments should also address the digital divide through enhanced broadband access, and look to expand tax policy to boost revenue in the region that has remained unusually low, particularly in Indonesia, he said. — Bloomberg

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