--BY NEWBIZ TEAM

Unveiling the  latest report titled 'Economic and Social Survey of Asia and the Pacific 2022' prepared by  Economic and Social Commission for Asia and the Pacific, Kiatkanid (Wan) Pongpanich, Macroeconomic Policy and Financing for Development Division, Macroeconomic Policy and Analysis Section, United Nations Economic and Social Commission for Asia and the Pacific said that 85 million people in the Asia-Pacific region have been pushed below the extreme poverty line due to pandemic. She also said that the central banks should uplift the minorities and vulnerable communities by reducing the interest rates. "Covid has shown the need to protect minorities and vulnerable communities," she said, adding "so governments in these areas should only spend in areas where there is potential. Central banks should try to reduce economic inequality by lowering interest rates." She was presenting the report at a programme organised by United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and South Asia Watch on Trade, Economics and Environment (SAWTEE) to disseminate the findings of the ESCAP flagship report, the Economic and Social Survey of Asia and the Pacific 2022 on 1 July 2022 in Kathmandu.

The report says Asia-Pacific region experienced a strong economic rebound in 2021, however, the level of output is about 2% below the pre-pandemic path and recovery is still nascent and uneven between countries. The report further says that outlook is riddled with uncertainty. "Recovery is expected at a more moderate pace in 2022 and 2023, and full resumption is influenced by availability of vaccines, stringency of restrictions, labour market recovery. The Russia-Ukraine conflict will cast a shadow on recovery prospects whereas inflation, along with interest rates, is expected," says the report. It suggests that there is a need to maintain expenditures in healthcare, education and social protection by the government.

"We still cover the economically backward communities and classes through guided loans, refinancing and concessional loans," said Prakash Shrestha, Executive Director, Nepal Rastra Bank. "Now we have to put more emphasis on economic stability," he said.

Biswo Nath Poudel, vice-chairman of the National Planning Commission, also said that the economically backward communities and classes have been included in Nepal through the central bank.

He said that the role of the market should be strengthened as the programs to eliminate inequality from taxes have not been effective as in developed countries.

Stating that the country was in a difficult situation, Paras Kharel, director of research at South Asia Watch on Trade, Economics and Environment (SAWATEE), said the government policies are not favourable.

"The government has increased the revenue target by 28% in the next budget. Imports will be reduced by 20 percent. As 50% of the source of revenue is imports. How is that possible?" he asked.  Kharel said that the government was losing revenue as it had increased taxes on raw materials used in domestic production. According to him, domestic industries and businesses are likely to be hit by the government's decision to raise import duties on raw materials.