ADB's support for recovery from the COVID-19 pandemic in Asia and the Pacific
 
May 30, 2020
Category:

The coronavirus disease (COVID-19) pandemic has threatened health, livelihoods, and social wellbeing across much of Asia and the Pacific. The Asian Development Bank (ADB) has been responding to the crisis from its early stages, focusing on a broad set of challenges related to the public health emergency, its economic fallout, and the path to recovery.

Beginning in February 2020, emergency assistance grants helped to ensure the supply of essential medicines and personal protective equipment. A $20 billion comprehensive response package announced in April 2020 is providing substantial ongoing support through finance, knowledge, and partnerships to address the immediate and long-term impacts of COVID-19.

Helping to meet budget shortfalls and finance country responses

With government revenues strained due to sharp declines in economic activity, ADB has made large-scale financing available through a budget support instrument originally developed in response to the global economic crisis in 2008.

The financing will support policies and expenditures that extend social assistance, protection for economically vulnerable groups, resources for COVID-19 containment and prevention, and relief to affected workers and small businesses.

In the first three months of the COVID-19 outbreaks, over $5 billion in financing has helped to alleviate the fiscal strain in several developing member countries—including India, Indonesia, and the Philippines, which received loans of $1.5 billion each; Bangladesh ($500 million loan); Bhutan, ($20 million loan); the Kyrgyz Republic ($50 million loan and grant package); and Mongolia ($100 million loan).

Financing for country responses to COVID-19 extends beyond budget support.

New and expanded forms of assistance are reaching countries as they obtain medical supplies and equipment, upgrade health systems, and provide emergency cash subsidies to vulnerable households. New loans are being extended to Bangladesh ($100 million loan), Pakistan ($300 million loan), and the Philippines ($200 million loan). An ongoing health sector project in Mongolia is receiving an extra $30 million to support COVID-19 preparedness and response, along with other resources.

Grants to address country-level challenges

In combination with financing from loans, grants are helping countries update their pandemic response plans, assess health system and economic impacts, improve regional coordination to tackle outbreaks, and build long-lasting systems to address communicable diseases.

$78 million in grants to 40 countries across Asia and the Pacific were approved for this within three months.

In the Pacific, technical assistance and other grants are providing support for COVID-19 response in the Solomon Islands, the Marshall Islands, Samoa, and Tonga. A disaster-contingent financing loan is also supporting Palau’s response.

Quickly disbursing grants for disaster response are enabling countries to meet immediate expenses related to the pandemic. 10 countries received a total of $11.5 million in these grants by the end of April 2020.

Pakistan, which received $2 million from the disaster response fund, is also being supported through $50 million in underutilized disaster response resources that have been reprogrammed to help fight the COVID-19 pandemic, in addition to the new emergency assistance loan of $300 million.

Afghanistan is receiving a $40 million emergency assistance grant to address critical health system needs.

Engaging partners for more effective response

ADB is coordinating closely with member countries and international partners, including the World Bank and other multilateral development banks, the International Monetary Fund, bilateral agencies, the World Health Organization, and the United Nations Children’s Fund. This coordination has increased the available resources for ADB’s response and avoided duplication in the support provided by partners.

Cofinancing from international partners for COVID-19 response is expected to reach at least $5.8 billion.

Member countries are making $165 million in additional grant financing available to complement ADB’s operations, including $150 million from the Government of Japan to help ADB strengthen the capacity of developing member countries to contain the spread of COVID-19.

$4 million of the $44 million ADB has allocated for technical assistance is cofinanced by the People’s Republic of China (PRC) and the Republic of Korea.

Enabling the private sector

ADB’s private sector assistance includes a focus on rejuvenating trade and supply chains and helping liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs.

$475 million in financing to the private sector was approved by early May 2020, including $142 million in cofinancing.

In all, $2 billion of the $20 billion ADB COVID-19 comprehensive response package will provide support to the private sector. $200 million focuses on strained supply chains, with financing for private sector companies that manufacture and distribute medicines and other items needed to combat COVID-19.

Rapid funding to the private sector enabled the continued supply of essential medicines and personal protective equipment, along with natural and liquefied petroleum gas deliveries to households, hospitals, industry, and services in Wuhan and other affected areas in Hubei province, PRC in the weeks following the outbreak there.

Knowledge resources to inform COVID-19 response

ADB is also providing knowledge to improve country response and policymaking.

The Asian Development Outlook (ADO) 2020 contained a special section on the likely economic impact of the COVID-19 outbreak on the economies of developing Asia. The data from the report and an updated assessment—which projects global losses of up to $8.8 trillion—are publicly available.

A policy database focuses on key economic and noneconomic measures that governments are taking to address the COVID-19 crisis to help countries assess approaches for different situations.

Focusing on the private sector, ADB released a supply chain tracking tool to assist banks, investors, and governments with information on supply chains for the manufacture of goods critical to fighting COVID-19, such as ventilators and masks.

Adding to the expertise offered to countries through operational projects, ADB has been sharing insights and practical knowledge from ADB experts and the wider community of development practitioners, academics, and policymakers on a range of critical challenges raised by the COVID-19.

Supporting communities and innovators

ADB’s COVID-19 response also aims to reach local communities in need of immediate assistance, and to inspire digital innovators to tackle the longer-term challenges from the pandemic.

In partnership with the Philippine government and private sector partners, a food program in Metro Manila, Philippines (where ADB is headquartered) and surrounding provinces delivered critical food supplies to 162,000 vulnerable households suffering from lost income and access to food and supplies during a two month-long community-wide quarantine.

The program, which received additional support from individual donors including many ADB staff, offers a model that can be replicated in other countries confronting similar issues.

ADB is co-hosting a virtual challenge to crowdsource ideas and digital solutions that can help countries in Asia and the Pacific deal with the medium- and long-term effects of the COVID-19 pandemic. Promising solutions will be pilot tested throughout 2020.

The path to recovery

This mobilization of financial resources, expertise, and coordination capacity reflects ADB’s institutional commitment to supporting the long-term development of Asia and the Pacific.

Through large-scale support for economies in developing Asia, contributions to global knowledge, and relief at the local level, ADB aims to empower governments, businesses, communities, and innovators to confront and recover from the COVID-19 pandemic as swiftly as possible.