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China’s Expanding Media Influence in South Asia

The establishment of Confucius Institutes and Classrooms in 162 countries further supported this narrative, according to Khabarhub…reports Asian Lite News

Chinese President Xi Jinping’s 2015 statement, “Wherever the readers are, wherever the viewers are, that is where the tentacles of propaganda reporting should be extended,” serves as a backdrop to the Chinese government’s increasing control over its media and its expanding efforts to shape narratives beyond its borders, Kathmandu-based media house Khabarhub reported.

Under Xi’s leadership since 2012, China has significantly tightened its grip on the nation’s media. Simultaneously, it has sought to establish its preferred narrative globally. State broadcaster CCTV, rebranded as CGTN for international audiences and the Xinhua news agency have rapidly expanded their presence worldwide.

The concept of Soft Power became crucial for China since 2007, and it invested heavily in state-owned media outlets such as China Daily and CGTN, aiming to emphasize the “Rise of China” by showcasing its economic achievements. The establishment of Confucius Institutes and Classrooms in 162 countries further supported this narrative, according to Khabarhub.

Despite being one of the world’s worst performers in press freedom, China’s media companies, both state-owned and private, are actively involved in content production, investment in other media ventures, and media development efforts. Managing public opinion overseas, especially concerning the Communist Party’s legitimacy, Tibet, alleged Uyghur rights violations in Xinjiang, Hong Kong’s political rights, and the country’s role in the COVID-19 pandemic, is a significant part of their propaganda.

China’s influence in South Asia and its potential interference in democracy is a complex and evolving issue. Chinese media has been shaping public opinion and political discourse in South Asian countries, often engaging in self-censorship to avoid criticism of China’s policies.
China’s control over Pakistan’s domestic media is facilitated by the China-Pakistan Economic Corridor and the rhetoric of an all-weather friendship between the two countries. In Afghanistan, China’s state news agency Xinhua has become the second-most-influential news source, trailing only The Associated Press.

China’s media influence in South Asia also extends to new media tactics, such as cyberbullying, fake social media accounts, and targeted disinformation campaigns. These efforts are often conducted by state media outlets and proxies. While China’s media influence in South Asia is complex, the impact varies depending on local media landscapes, government regulations, and the resilience of democratic institutions. Public awareness of China’s activities is growing, and social media platforms are improving their monitoring and response capabilities.
China’s influence tactics also extend to cyberspace, with fake social media accounts, targeted disinformation campaigns, and coordinated online harassment of journalists.

However, South Asian countries’ media landscapes, democratic institutions, and public awareness about China’s activities determine the extent of its success. As China continues to expand its media manipulation efforts in South Asia, there is growing awareness of its actions, and social media platforms are improving their ability to respond to these challenges, Khabarhub reported. (ANI)

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‘Time to invest in Indian, South Asian languages’

Further stressing upon the trade agreement between both countries, Gareth highlighted India’s economy as a bright spot against global economic headwinds…reports Asian Lite News

United Kingdom government needs to invest in the teachings of the South Asian language as these language skills are integral to maximizin the relationship between both countries, said Gareth Thomas, Labour and Co-op Member of Parliament for Harrow West in Northwest London. “The UK needs to start putting serious financial and academic backing behind South Asian language teaching. The teaching of Gujarati, Urdu and Hindi are important to Britain’s economic future as well as an opportunity for academic excellence among young people in our country”, Gareth said.

“As the UK seeks to strengthen its trade links with India we must invest in the languages of South Asia, these language skills are integral to maximising our relationship. India has not only a growing population and economy but also a growing middle class which makes India a key partner for the UK”, he added.

Appreciating the strong links between India and UK, the MP said that “the shared history and communities should be maximised for the economic and cultural benefits that our two great nations deserve.”

Further stressing upon the trade agreement between both countries, Gareth highlighted India’s economy as a bright spot against global economic headwinds.

“The robustness of India’s economy is indeed a bright spot against global economic and geopolitical headwinds and a Trade agreement between the UK and India can only further enhance India’s and further establish India as one of the key nations to shape the 21st century,” Gareth said.

“A free trade agreement between our two nations has the power to provide not only opportunities for business but opportunities for individuals who wish to study, travel and experience what our two nations can provide”, he added.

Gareth Thomas is a Labour and Coop Party MP and Shadow Minister for Trade. Gareth has represented the constituency of Harrow West since 1997 and has served as a Trade and Development Minister under the last Labour government.

For Harrow West, in Northwest London, Gareth’s constituency is a diverse community with a large community from the South Asian diaspora. His constituency has allowed him to see first-hand the work Temples, Mosques do in helping young people learn south Asian languages. (ANI)

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South Asia is the hotspot of the climate crisis: Guterres

Making his appeal for “massive investments” to help Pakistan recover from the flood damage, the UN Chief linked the devastation to climate change..reports Arul Louis

South Asia is the hotspot of the climate crisis with the people there most prone to die from its impact, according to UN Secretary-General Antonio Guterres.

“South Asia is one of the world’s global climate crisis hotspots — in which people are 15 times more likely to die from climate impacts than elsewhere,” he said on Monday.

“As always, those developing countries least responsible (for climate change) are the first to suffer” because of it, he added at a UN-sponsored fund-raising conference in Geneva to help Pakistan recover from last year’s devastating floods.

“We need to be honest about the brutal injustice of loss and damage suffered by developing countries because of climate change,” he said and “if there is any doubt about loss and damage — go to Pakistan”.

Pakistan received pledges of more than $9 billion at the conference and for the first time more than half the commitments came from developing countries, Stephane Dujarric, the spokesperson for UN Chief, said.

That amount is a little more than half the $16 billion that Guterres added that Islamabad will need.

Making his appeal for “massive investments” to help Pakistan recover from the flood damage, the UN Chief linked the devastation to climate change.

“Pakistan — which represents less than one per cent of global (greenhouse gas) emissions — did not cause the climate crisis, but it is living with its worst impacts,” Guterres said.

More than 33 million people were affected by the floods that hit Sindh and Balochistan, killing more than 1,700 people and laying waste to 1.8 million hectare of farmland, according to the UN.

Guterres, who has made fighting climate change one of the major pillars of his agenda, held developed countries to their promise made at last year’s UN conference in Egypt on climate change to fund developing nations’ efforts to cope with it.

“Developed countries must deliver on their commitment to double adaptation finance, and meet the $100 billion goal urgently, without delay,” he added.

“And we need to reverse the outrageous trend of emissions going up, when they must go down to prevent further climate catastrophe,” he said.

At a news conference, he chided world leaders for not doing enough.

“I am deeply frustrated that global leaders are not giving this life-or-death emergency the action and investment it requires,” he added.

Guterres also brought up the issue of the international debt burden faced by some countries, notably Pakistan, which he called “a victim of the man-made disaster of a morally bankrupt global financial system”.

“I renew my call to global leaders and multilateral development banks to join forces and develop creative ways for developing countries to access debt relief and concessional financing when they need it most,” he said.

Pakistan is seeking a $1.6 billion bailout from the International Monetary Fund.

(Arul Louis can be contacted at arul.l@ians.in and followed at @arulouis)

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Anti-China protests blur Beijing’s influence in South Asia

Sri Lanka is now facing the brunt of repaying the debt which is worsened because of China’s Belt and Road Initiative…reports Asian Lite News

China’s ambitious policy of exerting its influence in the South China Sea appears blurred as neighbouring countries like Sri Lanka, Bangladesh, Nepal, and the Maldives have launched the anti china protest.

Notably, the anger amongst these countries is because of the debt trap of massive loans from china and their interference and presence in their country. The ongoing economic crisis in Sri Lanka, which led to the Chinese occupation of Hambantota port over non-repayment of loans, has added to the problem, according to The Singapore Post.

Sri Lanka granted the Hambantota port to the Chinese on a 99-year lease but is now facing the brunt of repaying the debt which is worsened because of China’s Belt and Road Initiative.

Currently, Sri Lanka blames China for their economic crises. Earlier, several politicians had led anti-China protests as it had declined the restructuring of their loans, according to Nectar Gan, an author in The Singapore Post.

Sri Lankan central bank.(photo:Facebook)

“If the Chinese government and Embassy do not look after the interests of our Lankan people… there will be a China go home campaign soon,” Gan quoted a 32-year-old legislator Shanakiyan Rasamanickam. However, China’s loans were opposed in Sri Lanka way back in 2017. Buddhist monks had warned the government of Sri Lanka that it would become a Chinese colony if it fell for the BRI but the government ignored their warning.

Financial experts based in Bangladesh have criticized the Chinese loans for being expensive and with no option of grants unlike the loans given by the World Bank (WB), Asian Development Bank (ADB) or Japan International Cooperation Agency (JICA), reported The Singapore Post.

In Bangladesh, the second-highest receiver of Chinese loans Ahsan H Mansur, executive director of Dhaka-based think tank Policy Research Institute (PRI) highlighted the deception used by the Chinese contractors. He said they show lower cost while taking up contracts but increase it significantly later. This adds to the debt principal and interest, thus increasing the loan burden, according to The Singapore Post.

Loans defaulted by Bangladesh have now reached USD 12.38 billion approximately. The Singapore Post reported by quoting Bangladesh’s Finance Minister Mustafa Kamal who had warned Bangladesh to think twice before taking Chinese loans. He said, “Everybody is blaming China. China cannot disagree. It’s their responsibility”.

Bangladesh sees similar protests against China for its treatment of ethnic minority Uyghur Muslims in Xinjiang, China.

Maldives, where the political landscape is divided into pro-India and pro-China groups also protested for Uyghur Muslims. Now as the Pro Indian government is in power in Maldives china’s interference in the country has been restricted and an India First policy has been adopted, Gan reported.

Both of these investments of USD 12.38 billion approximately in Bangladesh and USD 1.5 billion in Maldives are raising concerns for China as both of these countries are strategically important. The Maldives especially finds itself in problems as it is not able to raise revenue to repay its huge loan to China with its USD 4.9 billion dollar Gross Domestic Product (GDP). All this is the opportunity for India to regain influence with Maldives as it is helping the country with its debt resulting in the recapture of the support that it had lost to China, according to The Singapore Post.

Nepal which signed itself for the BRI in 2017 has now revoked itself from the BRI due to its concerns about a possible debt trap. This comes when China is already facing allegations of encroaching on its territory. Resulting which the block on export and the closure of the border for months.

The South Asian countries have now been carefully observing China’s questionable economic activity in the area and trying to save itself from the debt trap. (ANI)

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Business

Levi’s names Amisha Jain as South Asia head

Most recently, Jain was the chief executive officer at Zivame, India’s number one intimate-wear brand and platform where she is known to be a transformational leader and a turnaround specialist…reports Asian Lite News

Levi Strauss & Co. on Monday announced the appointment of a new leader in its commercial organization. Amisha Jain has been named as the company’s new senior vice president and managing director of South Asia-Middle East and Africa (SAMEA).

She will be responsible for leading the company’s operations in SAMEA and ensuring that the geography continues to drive expansion and growth, contributing to the company’s success in Asia and around the globe.

Jain brings more than 20 years of experience across multiple industries including physical and digital retail, consumer goods and technology and a strong track record of leading profitable, sustainable growth and transformation initiatives in both multi-national and domestic companies in India to the company.

Most recently, Jain was the chief executive officer at Zivame, India’s number one intimate-wear brand and platform where she is known to be a transformational leader and a turnaround specialist. During her tenure there, she scaled the business nine times in three years before the business was acquired by Reliance Group in 2020.

Amisha has an MBA from INSEAD and a master’s degree in electrical engineering from the University of Texas at Arlington. She started her career as an engineer with Motorola Inc. and has held roles across multiple functions including sales, operations and strategy at organizations like McKinsey & Company, Nike and Arvind Group.

“We are thrilled to welcome such a dynamic, proven leader to the company,” said Seth Ellison, executive vice president and chief commercial officer of Levi Strauss & Co. “Amisha’s years leading digital and physical retail businesses, her track record of delivering results while connecting with consumers and her passion for innovation are a combination that will set our SAMEA cluster up for accelerated growth.”

“I am excited to join LS&Co. and the Levi’s® a brand—one that I have always admired as a consumer and a business leader. The team has had an incredible journey thus far, and I am delighted to be part of this passionate and high-performing group. Together we will strive to take the brand to even greater heights in the region,” said Amisha Jain, senior vice president and managing director of South Asia-Middle East and Africa (SAMEA), Levi Strauss & Co.

Jain fills this role following the transition of Sanjeev Mohanty in late 2021. Mohanty, the company’s previous senior vice president and managing director of SAMEA, is currently Levi Strauss & Co.’s senior vice president and managing director of the U.S. and Canada.

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Be wary of China’s military sales in South Asia

Poor quality and workmanship of these Chinese military weapons and systems has turned out to be the bane for its clients. Countries like Pakistan, Bangladesh, Sri Lanka, Thailand and Nepal has found this out the hard way, writes N.C. Bipindra

Of late, China has raised security concerns in the Indian Ocean region with strategic military sales like submarines to Bangladesh and Pakistan. China contends to be a key defence exporter to many Asian and Southeast Asian countries in India’s neighbourhood.

Many of these countries, who are unable to acquire expensive military technology from other reliable sources, procure seemingly inexpensive weapons and systems from the Chinese market.

To this effect, the Bangladesh military imported two Type-035G submarines of 1970s vintage and Type-053H frigates from China, with its import dependence on Chinese hardware touching nearing 85 percent.

Myanmar, after the military coup in 2021 and sanctions by the West, has turned towards China for procuring majority of its military hardware.

Pakistan is shifting its reliance to cheap Chinese hardware with its procurement of Yuan class submarines, J-10/JF-17 fighter’s aircraft and Type-054 stealth warships.

Sri Lanka has been given warships and military aircraft (Harbins, J-7) in recent times. Nepal is also being aggressively pursued by China in the recent years for procuring Chinese military hardware with NPR 2.5 billion grant for the Nepalese Army.

Chinas-Army-continues-to-build-up-infra-along-LAC

Chinese development of overseas bases in the region is also bothering Indian military planners. Commissioning of the Djibouti military base in 2017, development of Gwadar port in Pakistan and taking over of Hambantota port in Sri Lanka gives them a credible infrastructure to position military assets in the region.

The new entrant in this club is Pekua port in Bangladesh. China plans to develop this port and offer it for berthing and maintenance of submarines given to Bangladesh. However, its real intent might be to establish a transit base for its nuclear submarines, which are likely increase their forays in the Indian Ocean region in the future. Hence, if we envisage a conflict with China or our neighbouring countries, we can anticipate that stance of these countries will be largely driven by Chinese interest in the region.

However, everything is not so rosy for Beijing’s customers as it seems. They, at their own peril, however, do not factor the life cycle costs and reliability factors of Chinese products.

Poor quality and workmanship of these Chinese military weapons and systems has turned out to be the bane for its clients. Countries like Pakistan, Bangladesh, Sri Lanka, Thailand and Nepal has found this out the hard way.

Thai Prime Minister Prayut Chan-o-cha on April 4, threatened to cancel a deal for purchase of Chinese S26T Yuan Class submarines, unless Beijing includes the German-made MTU 396 engine.

Military vehicles of the Chinese People’s Liberation Army arrive in Moscow, Russia, Aug. 14, 2021. (Photo by Yu Xiaoping_Xinhua)

Beijing has supposedly requested modification in the contract to replace the German engines with Chinese MWM 620 engines.

Considering the poor reputation related to anything Chinese made, the Thai don’t appear willing to go ahead with the deal unless their demands are met.

Earlier in January, Nepal Airlines had grounded six Chinese-made aircraft, saying that it was proving to be unaffordable to fly them. These sub-standard planes delivered extremely poor serviceability rates and required heavy maintenance.

The loan from China for these aircraft has, however, continued to haunt the airlines. Dues worth $35.1 million, at a steep interest rate along with a service charge and management expenses, are still pending.

Beijing had gifted two 1970s era Ming class Type-035G submarines to Bangladesh valued at $100-million each in 2017. These were later re-inducted by the Bangladesh Navy as BNS Nobojatra and BNS Joyjatra.

However, both the platforms have been lying idle due to technical issues and could not be used as intended. The year 2020, witnessed China gifting Dhaka with two Chinese 053H3 frigates — BNS Umar Farooq and BNS Abu Ubaidah.

According to sources, the Type-053H3 frigates gifted to the Bangladesh Navy have defects in fire control system as well as in the helicopter fuelling and defueling system.

Defects have also been discovered in the gyro compass. The frigates were supplied by Poly Technologies Inc. Poly Technologies is a subsidiary of China Poly Group Corporation, a trade company with headquarters in Beijing, which deals with missiles and other military hardware.

With regard to naval platforms built by China Shipbuilding and Offshore International Co. Limited, issues that have surfaced are poor metallurgy, lack of spare part support, machinery failure, defective radars and poor armaments.

Defects have also been detected in basic trainer aircraft and K-8 aircraft for the Bangladesh Air Force and short-range air defence system for the Bangladesh Army.

Pakistan, despite being closest to Beijing, has also faced similar issues. Pakistan armed forces, which have been traditionally used to superior quality products made in the West, has had to deal with defective military equipment supplied by China.

The Chinese-supplied WL II UCAVs was grounded within days of induction into the PAF due to serious defects. A similar story has emerged with the joint production JF-17 fighters.

As per reports, approximately 40 aircraft are not airworthy due to a shortage of spare parts and the RD-93 engine have reportedly experienced frequent cracks in guide vanes, exhaust nozzles, and flame stabilizers.

Chinas-Army-continues-to-build-up-infra-along-LAC

The Chinese are desperately trying to replace the existing engine with the Chinese made WS-13 engines. However, when these will be made available to Pakistan remains the moot issue. Similar is the case with the SAM system on the Zulfiqar class frigate procured through a multi-million-dollar loan from the Chinese EXIM Bank.

The system, itself a clone of the French Crotale system, has been plagued with serviceability issues leading to the Pakistan Navy turning to European suppliers for future inductions.

Other cases of supply of poor-quality drones, armoured personnel carriers, missiles and even warships across the globe are well documented.

In some cases, loss of lives due to malfunctioning equipment have also been reported. The lack of quality of military hardware from China is increasingly coming under scanner and has brought to fore the substandard capabilities being sold to economically weaker countries in the garb of supporting them.

The world over, reliability and quality of defence equipment are known as the true mark of a nation’s technology, manufacturing ability and maintenance practices.

One would have expected Chinese defence manufacturers to have taken this onboard as an inviolable fundamental. If one is to believe open-source narratives, here too China seems to have missed the mark entirely, opting for quantity and quick delivery over quality.

Buyers beware!

(N.C. Bipindra is Chairman, Law and Society Alliance, a New Delhi-based think-tank. He can be reached at ncbipindra@gmail.com)

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Business

Ukraine war to hit South Asia

The war will severely reduce the inflow of tourists to Maldives, a mainstay of its economy, especially from Russia and Ukraine, while it deals with large energy import bills…reports Asian Lite News

The World Bank has said in a new report that the war in Ukraine will slow down South Asian countries recovery from economic devastation caused by the Covid-19 pandemic, though the impact on India will be “moderate” compared to some of other countries that are already feeling the brunt of it.

The World Bank said that the Indian economy will grow at 8 per cent, which is slightly less than 2021, dding that the lingering impact of the investment programmes will keep the economy growing in the first half of 2022-23.

“The negative impact of the war in Ukraine on FY2022/23 growth is expected to be moderate, so growth will begin to taper off in the second half of 2022,” the report said.

The World Bank attributes its India projection to constrained purchase by Indian households, incomplete recovery of the labour market in which unskilled workers were hit the hardest, and inflation.

On the negative side, business expectations and investment, which had improved, might sour amid elevated input prices and a faster-than-anticipated increase in borrowing costs, the World Bank said, adding that the travel services balance may improve as India allows international flights to resume, while exports of computer and professional services are expected to remain strong.

Other countries of the region are projected to be hit harder by the war and they are already dealing with its impact, such as the balance of payment crisis in Sri Lanka, crisis in Pakistan, and the humanitarian disaster in Afghanistan.

“South Asia has faced multiple shocks in the past two years, including the scarring effects of the Covid-19 pandemic. High oil and food prices caused by the war in Ukraine will have a strong negative impact on people’s real incomes,” Hartwig Schafer, World Bank Vice President for South Asia, said in a statement released along with the report.

“Given these challenges, governments need to carefully plan monetary and fiscal policies to counter external shocks and protect the vulnerable, while laying the foundation for green, resilient and inclusive growth,” Schafer added.

The war will severely reduce the inflow of tourists to Maldives, a mainstay of its economy, especially from Russia and Ukraine, while it deals with large energy import bills.

The report said that in Sri Lanka, the economic outlook is “highly uncertain; higher food prices will further exacerbate food insecurity in Afghanistan; and the most serious challenge facing Pakistan will be its energy subsidies, which are the largest in the region. And Bangladesh will be hit by weakened demand in Europe for its exports”.

The war has also brought the region an opportunity to review its reliance on oil and fuel, the World Bank said, adding that it can provide a much-needed “impetus to reduce reliance on fuel imports”.

The report recommends that countries should “steer away from inefficient fuel subsidies that tend to benefit wealthier households and deplete public resources”, and move towards a greener economy by gradually introducing taxation that puts tariffs on products which cause environmental damage.

“The introduction of green taxation can have multiple quantifiable benefits for South Asia, including improved energy security, environmental gains and increased fiscal revenues,” said Hans Timmer, World Bank Chief Economist for the South Asian Region.

“These revenues could be utilised for adaptation against climate-related disasters and to strengthen social safety net systems,” Timmer added.

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Ukraine war to hit South Asia

The World Bank attributes its India projection to constrained purchase by Indian households, incomplete recovery of the labour market in which unskilled workers were hit the hardest, and inflation….reports Asian Lite News

The World Bank has said in a new report that the war in Ukraine will slow down South Asian countries recovery from economic devastation caused by the Covid-19 pandemic, though the impact on India will be “moderate” compared to some of other countries that are already feeling the brunt of it.

The World Bank said that the Indian economy will grow at 8 per cent, which is slightly less than 2021, dding that the lingering impact of the investment programmes will keep the economy growing in the first half of 2022-23.

“The negative impact of the war in Ukraine on FY2022/23 growth is expected to be moderate, so growth will begin to taper off in the second half of 2022,” the report said.

The World Bank attributes its India projection to constrained purchase by Indian households, incomplete recovery of the labour market in which unskilled workers were hit the hardest, and inflation.

On the negative side, business expectations and investment, which had improved, might sour amid elevated input prices and a faster-than-anticipated increase in borrowing costs, the World Bank said, adding that the travel services balance may improve as India allows international flights to resume, while exports of computer and professional services are expected to remain strong.

Other countries of the region are projected to be hit harder by the war and they are already dealing with its impact, such as the balance of payment crisis in Sri Lanka, crisis in Pakistan, and the humanitarian disaster in Afghanistan.

“South Asia has faced multiple shocks in the past two years, including the scarring effects of the Covid-19 pandemic. High oil and food prices caused by the war in Ukraine will have a strong negative impact on people’s real incomes,” Hartwig Schafer, World Bank Vice President for South Asia, said in a statement released along with the report.

“Given these challenges, governments need to carefully plan monetary and fiscal policies to counter external shocks and protect the vulnerable, while laying the foundation for green, resilient and inclusive growth,” Schafer added.

The war will severely reduce the inflow of tourists to Maldives, a mainstay of its economy, especially from Russia and Ukraine, while it deals with large energy import bills.

The report said that in Sri Lanka, the economic outlook is “highly uncertain; higher food prices will further exacerbate food insecurity in Afghanistan; and the most serious challenge facing Pakistan will be its energy subsidies, which are the largest in the region. And Bangladesh will be hit by weakened demand in Europe for its exports”.

The war has also brought the region an opportunity to review its reliance on oil and fuel, the World Bank said, adding that it can provide a much-needed “impetus to reduce reliance on fuel imports”.

The report recommends that countries should “steer away from inefficient fuel subsidies that tend to benefit wealthier households and deplete public resources”, and move towards a greener economy by gradually introducing taxation that puts tariffs on products which cause environmental damage.

“The introduction of green taxation can have multiple quantifiable benefits for South Asia, including improved energy security, environmental gains and increased fiscal revenues,” said Hans Timmer, World Bank Chief Economist for the South Asian Region.

“These revenues could be utilised for adaptation against climate-related disasters and to strengthen social safety net systems,” Timmer added.

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IMF cuts Asia economy growth forecast

Most of the downgrades in the region come from emerging market and low-income countries, led by India and the Association of Southeast Asian Nations….reports Asian Lite News

The International Monetary Fund (IMF) has revised down its 2021 economic growth forecast for Asia to 6.5 per cent, down by 1.1 percentage points from its April projection, according to a newly released regional economic outlook.

“The resurgence of the pandemic, amid initially low vaccination rates, slowed the recovery in the Asia-Pacific region, especially in emerging market and developing economies,” Chang Yong Rhee, director of the IMF’s Asia and Pacific Department was quoted as saying by Xinhua news agency.

Noting that the Asia-Pacific remains the fastest growing region in the world, Rhee said as vaccination rates accelerate, the region is expected to grow by 4.9 per cent in 2022, 0.4 percentage points faster than projected in April.

{PIc credits Twitter}

For advanced economies, the latest IMF forecast is broadly unchanged for 2021 with upgrades in South Korea and New Zealand and downgrades in Japan and Australia, according to the report.

Most of the downgrades in the region come from emerging market and low-income countries, led by India and the Association of Southeast Asian Nations.

China is projected to grow by 8.0 per cent in 2021, down by 0.4 percentage point from the April projection, according to the report.

India is projected to grow by 9.5 per cent after a sharp decline in 2020. While the pandemic surge earlier this year had a large adverse impact on growth, the subsequent rebound in activity has gained strength, it said.

The ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, Thailand), are still facing “severe challenges” from a resurgent virus and weakness in contact-intensive sectors.

“The divergence between Asian advanced economies and developing economies is deepening, with output levels in the emerging market economies and low-income countries expected to remain below pre-pandemic trends in the coming years, reflecting differences in policy support and vaccination rollout,” Rhee said.

The IMF official warned that the main downside risk is related to evolving pandemic dynamics, such as the possibility of Covid-19 becoming an endemic, and lower vaccine efficacy against new variants.

Other factors such as persistent global supply disruptions and weakening global value chain participation, elevated financial vulnerabilities in the corporate and real estate sectors in some countries, and potential financial spillovers from US monetary policy tightening also pose important risks for the region, he said.

Rhee said following the global financial crisis, Asia relied on large stimulus packages, which continued during Covid-19. Because of limited policy space, Asian countries have increased leverage overall, creating heightened risk for the region, said the IMF official. Should the US hike interest rates, Asia’s recovery could be jeopardised if growth fails to pick up.

Rhee said a “higher interest rate in the US can cause a capital outflow from the region, that can cause a depreciation, that can cause a domestic financing market cost increase.”

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