REGIONAL DEVELOPMENTS AS THE CORONAVIRUS PANDEMIC REACHED EVERY CORNER OF THE WORLD IN 2020, countries responded rapidly with an array of policies to stop the spread of the highly contagious disease, and then with social and economic policies to protect food security, incomes, and livelihoods. This experience brought attention to weaknesses in health, economic, and social protection systems. But it also showcased new innovations, policy approaches, and the surprising resilience of food systems. The diverse experiences of the world’s major regions have important lessons for creating sustainable, equitable, efficient, healthy, and resilient food systems. The impact of COVID-19 on food systems, wellbeing, and future transformation is examined for each major region: ■ Unprecedented scale-up of social protection programs in Africa south of the Sahara ■ Falling household incomes for rich and poor in the Middle East and North Africa ■ Central Asia’s risky reliance on remittances ■ Impacts of South Asia’s stringent lockdowns on migrant and informal labor ■ East and Southeast Asia’s interregional trade expansion and economic recovery ■ Urbanization, obesity, and COVID-19 vulnerability in Latin America and the Caribbean 74 AfricA 76 Middle eAst And north AfricA 81 centrAl AsiA 86 south AsiA 91 eAst And southeAst AsiA 97 lAtin AMericA And the cAribbeAn 102 75 AFRICA SAMUEL BENIN, KWAW ANDAM, AND JOHN ULIMWENGU Samuel Benin is deputy division director for the Africa Region, International Food Policy Research Institute (IFPRI), Washington, DC. Kwaw Andam is a research fellow and country program leader of the Nigeria Strategy Support Program, IFPRI, Abuja. John Ulimwengu is a senior research fellow, Africa Region, IFPRI, Washington, DC. Africa south of the Sahara has so far escaped the dir- est health impacts of the coronavirus pandemic, but short-term policy responses and the global slow- down have had major impacts on growth, value chains, incomes, trade, poverty, and consumption. The medium- to long-term impacts on nutrition and health will depend on the rate of recovery. To build greater resilience to future shocks, African countries will need to take a food systems approach to agrifood policy planning and implementation that includes better anticipation of risks and preparedness for shocks. They must also find ways to expand limited fiscal resources to make investments that embrace inclusion and pro- mote good governance and accountability in all parts of the system. SHORT-TERM IMPACTS OF COVID-19 The health effects of the COVID-19 pandemic in Africa south of the Sahara have been less severe than first antic- ipated given the region’s overall fragility. With 14 percent of the world’s population, Africa had reported less than 5 percent of global confirmed cases of COVID-19, and about 89,000 pandemic deaths as of the end of January 2021.1 Although there may be some underre- porting of cases and deaths, there is growing evidence that the low death rate is largely explained by Africa’s sizable young population, along with other factors including climate, genetics, and behavioral differences.2 However, as in other regions, governments across Africa implemented a variety of lockdown policies in early 2020 to combat the spread of the virus. These pol- icies varied in terms of their geographic coverage (many were restricted to outbreak-affected urban areas, but some applied nationwide), the types of socioeconomic activities that were restricted (based on essential versus nonessential classifications), the start of the lockdowns (mostly in March, with Rwanda being the first, but some, including Botswana, Eritrea, and Malawi, not until April), and their duration (ranging from two to three weeks in Malawi to nearly three months in South Africa). These measures had substantial impacts on economic growth, poverty, and other key socioeconomic indicators. In general, lockdown periods coincided with the agricul- tural seasons in central, eastern, and western Africa, but began at the end of the season in southern Africa. Protests over lockdowns broke out in a number of countries and hint at how the public perceived their respective governments’ motivations for the lockdown policies — for example, to prolong power or quash opposition (Malawi and Ethiopia) or to target certain social groups (Uganda). Public outcry over lack of evi- dence to support the policies, as well as violent attacks on citizens by security forces enforcing the lockdown policies, which led to deaths in countries including Kenya and South Africa, contributed to modification or reversal of the policies in a number of countries.3 Several ex ante analyses of the short-term impacts of Africa’s lockdown policies, conducted and updated throughout 2020, projected an economic recession, interrupting nearly 25 years of sustained economic growth in the region.4 Estimates of the contraction in 2020 GDP for Africa as a whole range from 1.7 percent under a baseline scenario (mild spread of the disease in the first half of 2020, with lockdowns ending by the middle of the year) to as much as 5.1 percent under a catastrophic scenario (severe spread of the disease with a high number of cases and lockdowns extending beyond the middle of 2020).5 The drop in GDP stems in part from the contraction of global demand for the primary commodities produced by African countries, as global production, travel, and trade were disrupted.6 76 Regional Developments Household incomes also fell as a result of reduced employment during lockdowns and reduced remittances from outside the region. Country-level economy- wide models show declines in household income in a number of countries, and GDP losses ranging from 9.7 percent in Mali to 38.0 percent in Rwanda (Figure 1).7 Phone surveys of households and firms in the food supply chain conducted in late 2020 in Burkina Faso, Ethiopia, and Nigeria confirm these mod- eled impacts and pathways, for example, showing employment and income losses as firms closed their operations.8 In terms of food systems, disruptions in value chains and informal urban trade caused shortages and higher food prices, as observed, for example, in Rwanda and the Democratic Republic of the Congo.9 Overall, food shortages were caused by closure of wet markets, restrictions on street vendors, and buying frenzies and hoarding ahead of the lockdowns. Studies from Ethiopia show there have been differences in the impacts across value chains. Although Ethiopia's food value chains in the aggregate may have been resilient to the pandemic shock,10 the dairy sector (especially raw milk vendors and small dairy shops) was hit hard as demand for its products slumped and prices of feed increased by 30 to 40 percent and those of veterinary services by 15 to 20 percent.11 Lockdown measures, lost income, and perceptions of disease risk have increased poverty and altered diets. Increases in poverty rates during the lockdown range from 3.8 percent in South Sudan to 15.0 percent in Senegal (Figure 1), and for the region as a whole, extreme poverty is expected to increase by up to 2.8 percent, representing an additional 37.5 million people.12 Phone surveys of households in Ethiopia show that consumption of raw or uncooked vegetables and dairy products declined due to fear of coronavirus transmission, but overall calorie consumption increased compared to pre-pandemic periods.13 Not surprisingly, the increase in calorie consumption was significantly greater among households that did not experience a loss in income than among those that did. POLICIES AND OTHER RESPONSES Beyond the lockdown strategies, governments across Africa also adopted macro-level policies — including fiscal, monetary, exchange rate, and balance of pay- ment policies — to mitigate the socioeconomic impacts of the pandemic and the health-related restrictions. For example, the West African Economic and Monetary Union (WAEMU) temporarily suspended its rule restrict- ing countries’ fiscal deficits to 3 percent of GDP in order to allow member states to increase their budget deficit ceiling.14 In addition to these macro-level instru- ments, there were supports targeted to specific sectors (for example, health, tourism and hotels, and agricul- ture), businesses (especially the informal sector), and households (especially the vulnerable and recently laid-off), including direct transfers to businesses and households. Other pandemic relief policies included reducing or fixing prices of inputs and grain as well as reducing, postponing, or canceling various tax pay- ments, fees, and utility bills. Kenya offered complete tax relief to those earning less than 24,000 Kenyan shillings (US$220) per month, Malawi allowed a six-month post- ponement of tax payments, and Rwanda fixed prices for essential pandemic-related commodities such as hand sanitizer, gloves, face masks, and fuel.15 Most notably, social protection programs were scaled up substantially. Estimates suggest cash trans- fer programs, for example, were reaching 11 percent of the population in African countries in July 2020, up from just 3 percent before the crisis.16 Despite this increase, the average coverage rate in Africa remains by far the lowest among developing regions, as the average coverage rate of cash transfer programs in response to COVID-19 has reached 38 percent across all developing regions. But Africa's rate of increase is the second highest, with countries including the Republic of the Congo, Guinea, Kenya, Mali, Togo, and Zimbabwe surpassing the average rate of increase for all developing countries.17 The cost of the various policies — in terms of higher government expenditure or foregone government revenue — is estimated at about $38.5 billion or 2.4 percent of GDP for African countries.18 However, the flexibility of governments in their spending choices (termed fiscal space) appears limited, as the estimated liquidity support (equity injections, loans, asset purchase or debt assumptions) is less than 50 percent of the total cost, indicating potential for a future fiscal crisis in some countries, including Ethiopia, Ghana, Mali, and Senegal (Figure 2).19 The limited availability afRica 77 figure 1 Impacts of pandemic lockdowns on poverty and GDP in selected African countries, 2020 Source: Based on S. Amewu et al., “The Economic Costs of COVID-19 in Sub-Saharan Africa: Insights from a Simulation Exercise for Ghana,” European Journal of Development Research 32 (2020): 1353–1378; K.S. Andam et al., “Impacts of COVID-19 on Food Systems and Poverty in Nigeria,” in Advances in Food Security and Sustainability, vol. 5, ed. Marc J. Cohen (Cambridge, MA: Elsevier, 2020); C. Arndt et al., “Covid-19 Lockdowns, Income Distribution, and Food Security: An Analysis for South Africa,” Global Food Security 26 (2020): 100410; African Union Commission, Second Biennial Review Report of the African Union Commission on the Implementation of the Malabo Declaration (Addis Ababa: 2020). Note: “Poverty” is the headcount poverty ratio. Changes in GDP (gross domestic product) and poverty are for the lockdown periods, which vary by country. GDP Poverty -30 -20 -10 0 10 20 ETHIOPIA GHANA MALI RWANDA KENYA MALAWI NIGER NIGERIA SENEGAL SOUTH SUDAN -40 Pe rc en ta g e ch an g e On-track, Malabo commitment on resilience Not-on-track, Malabo commitment on resilience figure 2 Fiscal measures in response to COVID-19 in selected African countries, 2020 Source: Based on African Union Commission, Second Biennial Review Report of the African Union Commission on the Implementation of the Malabo Declaration (Addis Ababa: 2020); IMF, “Fiscal Monitor Database of Country Fiscal Measures in Response to the COVID-19 Pandemic,” October 2020. Note: “Liquidity support” includes equity injections, loans, asset purchases, debt assumptions, and contingent liabilities; data are not available for Kenya, Malawi, Nigeria, Rwanda, and South Sudan. Additional spending or foregone revenue Liquidity support 1 2 3 4 5 ETHIOPIA GHANA MALI RWANDA KENYA MALAWI NIGER NIGERIA SENEGAL SOUTH SUDAN 0 Pe rc en t o f G D P On-track, Malabo commitment on resilience Not-on-track, Malabo commitment on resilience 78 Regional Developments of government fiscal resources to respond to such shocks is reflected in the region’s slow progress toward achieving the Malabo Declaration commitments to enhancing resilience of livelihoods and production systems to climate variability and related risks.20 Only nine countries (Burundi, Cabo Verde, Ethiopia, Ghana, Mali, Mauritania, Rwanda, Seychelles, and Uganda) are currently on-track to achieve their commitments.21 Governments of the on-track countries seem to have greater fiscal space to implement measures to deal with the pandemic, in terms of additional spending or foregone revenue (Figure 2). Private sector responses to the pandemic have varied, depending on the industry or business sec- tor, whether or not they are considered essential under the lockdown classifications, and the level of government support received. Invariably, a signifi- cant portion of firms suspended investments, laid off staff, reduced production, canceled orders, and ter- minated or renegotiated leases. Many adapted by changing their operational practices or their prod- ucts and services. In the Democratic Republic of the Congo, for example, almost 10 percent of enterprises were forced to sell assets, close to 40 percent shifted some staff to telework, and 10 percent shifted to new business activities.22 Notable innovations in response to the pandemic are digital solutions in different sec- tors such as health, including rapid diagnostic testing kits, mobile testing booths, and online platforms link- ing patients to doctors; and trade, including mobile payment platforms for informal traders and online platforms for small and medium enterprises to sell their products.23 TOWARD FOOD SYSTEM RESILIENCE AND TRANSFORMATION The reach and effectiveness of these responses will determine the pace of recovery, as well as the extent to which the short-term effects persist into the medium and long term. The COVID-19 pandemic is just one of multiple shocks that have hit the continent in recent years — including the Ebola epidemic in Guinea, Liberia, and Sierra Leone in 2014; the fall armyworm invasion since 2017; and the locust infestation in east- ern Africa in 2020. In addition, human population growth, growing demand for animal-sourced foods due to urbanization and rising incomes, and increas- ing travel connections with Asia are changing Africa in fundamental ways that also increase the risk of disease transmission from animals to people.24 Given the region’s vulnerability, ensuring that African countries are prepared to withstand future shocks will be central to the transformation of Africa’s food systems. Accordingly, building resilience at all levels will require a food-systems approach to agrifood policy planning and implementation. Such an approach must be based on evidence from Africa’s own situation and dynamics with respect to long-term issues for food system transfor- mation such as climate and biodiversity, demography, urbanization, value chains, and trade. At the national level, this must include better anticipation of risks and preparedness for shocks, integrating budget lines for disaster preparedness and emergency response into medium-term expenditure frameworks, institutionaliz- ing fiscal rules and stabilization funds for flexibility in managing shocks, and promoting good governance and accountability in all parts of the system.25 As more frequent shocks, including those related to climate change, and subsequent emergency responses demand more of the public budget, increas- ing the efficiency of public spending will be critical. Investments should be ramped up in key areas for long-term productivity and growth — including invest- ments in infrastructure, early warning and monitoring and evaluation systems, agricultural R&D and exten- sion, education, and health. The investments must embrace inclusion, as shocks and policies for deal- ing with pandemics affect women, men, and children differently, particularly in rural areas.26 Such invest- ments for the long-term will help mitigate the impacts of shocks overall and facilitate more effective and effi- cient responses. To increase these public investments, African gov- ernments must find sustainable ways to broaden their revenue base and increase the efficiency of revenue collection. One critical action will be supporting infor- mal sector actors to transition into the formal sector. Enabling their access to technologies and financial facilities will help them to raise their productivity and business growth and increase employment, all of which will add to the available revenue needed for investment for the future. afRica 79 \ M ar 2 02 0 ap r 20 20 M ay 2 02 0 Ju n 2 02 0 Ju l 20 20 au g 2 02 0 Se p 20 20 O c t 20 20 n O v 20 20 D ec 2 02 0 Ja n 2 02 1 lO ck D O w n S a n D h ea lt h M ea Su re S � R w an d a, K en ya , N ig e ri a, S e n e g al , S o u th A fr ic a an d o th er s is su e lo ck d o w n o rd er s � M an y co u n tr ie s cl o se b o rd er s an d b an fl ig h ts � G h an a, N ig e ri a, a n d o th er s b an p u b lic g at h er in g s, c lo se s ch o o ls � So u th A fr ic a’ s h o sp it al s o ff er fr ee te st in g � G h an a an n o u n ce s co ro n av ir u s re sp o n se p la n � N ig e ri a an n o u n ce s fu n d to u p g ra d e h ea lt h ca re in fr as tr u ct u re � R w an d a u se s d ro n e s to d el iv er c o ro n av ir u s in fo rm at io n � G h an a lo ck s d o w n m aj o r m e tr o a re as , l au n ch e s tr ac ke r ap p � C am er o o n b eg in s d o o r- to -d o o r te st in g � E th io p ia r el ea se s vu ln er ab le p ri so n er s � Z am b ia in tr o d u ce s ta rg e te d lo ck d o w n o f N ak o n d e � R w an d a im p o se s ta rg e te d lo ck d o w n in K ig al i � So u th A fr ic a en te rs v ac ci n e tr ia l St iM u lu S � G h an a g ra n ts t ax w ai ve r fo r fr o n tl in e w o rk er s � R w an d a re ce iv e s IM F lo an � G h an a la u n ch e s su p p o rt s ch em e fo r m ic ro , s m al l, an d m ed iu m b u si n e ss e s � R w an d a an n o u n ce s E co n o m ic R ec o ve ry F u n d � Z am b ia is su e s C O V ID -1 9 b o n d SO ci a l pr O te c ti O n � N ig e ri a b eg in s ca sh tr an sf er s an d fo o d a id � N am ib ia p ro vi d e s ca sh tr an sf er to th o se a ff ec te d b y lo ck d o w n � G h an a ap p ro ve s fu n d s fo r so ci al p ro te ct io n � R w an d a d is tr ib u te s fo o d to u rb an p o o r w h o c an n o t w o rk � S e n e g al p ro vi d e s ca sh tr an sf er s, fo o d a id , a n d u ti lit y b ill s u p p o rt � G h an a g ra n ts fr ee w at er s u p p ly to a ll h o u se h o ld s, r ed u ce s el ec tr ic it y co st s fo r p o o re st � Z am b ia p ro vi d e s ca sh tr an sf er s to a ff ec te d u rb an h o u se h o ld s FO O D S ec tO r in te rv en ti O n S � K en ya a llo w s o n ly t ak eo u t f ro m r e st au ra n ts � So u th A fr ic a ex em p ts s u p er m ar ke ts fr o m lo ck d o w n s S o u rc e: F o r C O V ID -1 9 d at a, J o h n s H o p ki n s U n iv er si ty , C SS E D at ab as e (u p d at ed M ar ch 8 , 2 02 1) . F o r p o lic y d at a, IF PR I, C O V ID -1 9 Po lic y R e sp o n se P o rt al (a cc e ss ed M ar ch 2 02 1) a n d n ew s re p o rt s. N o te : C o u n tr ie s an d p o lic ie s in cl u d ed h er e w er e se le ct ed to p ro vi d e an in d ic at io n o f t h e ty p e s o f a ct io n s ta ke n in th e re g io n . A FR IC A S O U TH O F TH E SA H A R A C O V ID -1 9 TI M E LI N E , M A R C H 2 02 0 –J A N U A R Y 2 02 1 05 1 0 1 5 2 0 2 5 3 0 Daily new confirmed cases per million people (7-day rolling average) E th io p ia R w an d a N ig e ri a S e n e g al G h an a MIDDLE EAST AND NORTH AFRICA KIBROM ABAY, CLEMENS BREISINGER, DALIA ELSABBAGH, HOSAM IBRAHIM, AHMED KAMALY, AND MARIAM RAOUF Kibrom Abay is a research fellow, Clemens Breisinger is a senior research fellow and leader of the MENA Regional Program and the Egypt Strategy Support Program, Dalia Elsabbagh and Hosam Ibrahim are senior research assistants, and Mariam Raouf is a senior research associate, all with the Development Strategy and Governance Division, International Food Policy Research Institute (IFPRI), Cairo. Ahmed Kamaly is deputy minister, Ministry of Planning and Economic Development of the Government of the Arab Republic of Egypt. As in most regions, the coronavirus pandemic evolved rapidly in the Middle East and North Africa (MENA), starting as a health crisis in mid-March and later escalating into a large-scale economic crisis affecting the lives and livelihoods of millions of peo- ple. Beyond the devastating health impacts and death tolls from COVID-19, the pandemic has added to other serious challenges currently facing the region. These include low oil prices for oil-exporting countries like the Gulf countries and Libya; ongoing conflicts and political transitions in many countries; and natural disasters such as the locust swarms in Sudan and floods in Yemen. In particular, the pan- demic continues to test the functioning of national food systems and expose the vulnerabilities that come with the heavy dependency of most MENA countries on food imports. All national economies in the region have expe- rienced severe disruptions. The impacts vary across countries and sectors, reflecting differences in both the spread of the pandemic and government responses.1 Relative to previous quarterly output, the pandemic has caused GDP losses ranging from 1.1 percent expected in Egypt to 23.0 percent in Jordan during April–June 2020.2 The fall in Egypt’s GDP is relatively small in part because Egypt avoided full lockdown measures during the initial wave of the pandemic and quickly invested in a massive stimulus program. In Yemen, the fall in remittances resulting from the pandemic led to an estimated drop of more than 9 percent in food system outputs and household income reductions of 12.5 percent.3 AGRIFOOD SYSTEM RESILIENCE, BUT WITH WINNERS AND LOSERS Agrifood systems have proven relatively resilient in the MENA region, with some value chains even benefit- ing from the crisis. The coronavirus outbreak coincided with some agricultural harvest seasons, including most cereal crops in Egypt and potatoes and wheat in Jordan. Reductions in agrifood GDP ranged from about 3 to 9 percent in Egypt, Yemen, and Sudan to about 38 percent in Jordan. Agriculture remains the least affected sector in the Egyptian and Sudanese econo- mies.4 Nevertheless, pandemic-related lockdowns and curfews in Egypt reduced the production, distribution, and sale of perishable food products such as dairy, particularly affecting smallholders who lack adequate storage and processing facilities for these products.5 However, some value chains, including those for medic- inal and aromatic plants, have enjoyed a substantial boost, fueled by increased demand for exports. The large decline in the agrifood sector in Jordan reflects a significant fall in exports as well as labor restrictions affecting farming activity. Jordan’s agri- culture sector is dominated by fruit and vegetable production for export and relies heavily on foreign workers, who constitute most of the country’s agri- cultural labor force — about 85 percent of livestock labor and 92 percent of crop labor in 2015.6 The mobility of these workers has been hampered by COVID-19-related restrictions, and many returned to their home countries when their work licenses were not renewed. miDDle east anD noRth afRica 81 The impacts of these shocks have also varied across different actors within each value chain, mainly because of their varying capacities to respond to the pandemic and associated dynamics in demand for and supply of products.7 For example, in Egypt the pandemic has affected milk producers disproportionately more than milk processing factories.8 Recent studies show that global demand for digital tools has significantly increased during the pandemic, including in Egypt, and those sectors that are sufficiently digitalized have been less affected by the pandemic.9 The greatest economic damage to the region’s agrifood systems has occurred in food services, includ- ing hotels and restaurants. In contrast, losses in the food-processing sector have been relatively small and largely driven by indirect effects, including the reduced demand from restaurants and hotels (Figure 1). The drop in hotel-related services was sharpest in coun- tries that depend heavily on tourism, such as Egypt and Jordan, where international tourist arrivals dropped dramatically and have yet to recover. Because agricul- tural production and food systems have been relatively more resilient than other sectors in most MENA coun- tries, the agrifood system offers a strong foundation for post-pandemic recovery and transformation. SHARPER INCOME DROP IN WEALTHIER, URBAN HOUSEHOLDS; GREATER HARDSHIP FOR POOR Overall, household incomes during the main lock- down period from April to June 2020 fell by 8 percent in Egypt, 22 percent in Jordan, and 15 percent in Sudan (Figure 2). Although most households were hurt by the economic slowdown and the initial fall in remittances, urban households experienced greater absolute losses than rural households. Urban dwell- ers are primarily employed in the industrial and service sectors — including trade, transport, hotels, and gyms and fitness services — which were disproportionately affected by lockdowns and mobility restrictions. Rural households have also lost income, though less in abso- lute terms than their urban counterparts. In Yemen, where the sharp fall in remittances is believed to be the main driver of impact, the poor have been hit harder than the better-off, with an estimated income loss of 21 percent, compared with 12 percent for wealthier households.10 Whether rural or urban, poor households are likely to find it harder than wealth- ier households to cope with income losses. These drops in household incomes as well as other direct figure 1 Change in agrifood system GDP, April–June 2020 (compared with April–June 2019) Source: IFPRI social accounting matrix (SAM) multiplier models, C. Breisinger et al., Impact of COVID-19 on the Egyptian Economy: Economic Sectors, Jobs, and Households, MENA Policy Note 6 (Cairo: IFPRI, 2020); M. Raouf, D. Elsabbagh, and M. Wiebelt, Impact of COVID-19 on the Jordanian Economy: Economic Sectors, Food Systems, and Households, MENA Policy Note 9 (Cairo: IFPRI, 2020). Food services Food trade and transport Agroprocessing Agriculture Agrifood system -100% -80% -60% -40% -20% 0% 20% Egypt Jordan Sudan 82 Regional Developments https://ebrary.ifpri.org/digital/collection/p15738coll2/id/133764 https://ebrary.ifpri.org/digital/collection/p15738coll2/id/133764 https://ebrary.ifpri.org/digital/collection/p15738coll2/id/134132 https://ebrary.ifpri.org/digital/collection/p15738coll2/id/134132 public health impacts of the pandemic are also likely to adversely affect nutritional outcomes in the region.11 PUBLIC INVESTMENTS, SAFETY NETS, AND FISCAL LIMITS As MENA economies and sectors begin to show signs of economic recovery, some are reviving more quickly than others, largely because of national policy responses. Although these public investments and increases in cash transfers can help economies and households recover, their fiscal implications remain uncertain. For example, Egypt’s emergency response package of EGP 100 billion (US$6.4 billion) is estimated to have reduced the drop in GDP between April and June 2020 from 8.7 percent to just 1.1 percent. This rescue package is supporting the most affected sectors, including exports, tourism, and real estate. In addition, the government relaxed credit limits for businesses, provided tax-based incentives, and expanded cash transfer programs. Egypt is now imple- menting a public investment plan with funding of about EGP 280 billion (about $18 billion). With this government support, Egypt’s economic performance improved in the second half of 2020.12 In Sudan, workers received unemployment benefits and small businesses received three-month tax breaks. Sudan also increased spend- ing on current social protection programs, providing SDG 12 billion (about $32 million)13 in cash transfers to the poorest households over a period of three months and allocating SDG 10 billion for the country’s essen- tial commodity production support program, known as Selaaty (“my commodity”). In Jordan, allowances were increased for poor households, and a temporary cash transfer program was established for the unemployed and self-employed, with about JOD 81 million (about $114 million) in income support designated for sea- sonal workers. Three important caveats are worth highlighting regarding the impacts of these interventions. First, the effectiveness of these policy responses depends greatly on whether the programs are well-targeted and informed by evidence on the breadth of harm suffered by each sector. Second, the level of social protection required to fully offset poor households’ income losses is likely to be prohibitively expensive, especially given falling revenues from reduced economic activity and declining fiscal resources. Third, the fiscal burden and sustainability of social safety nets is a particular concern figure 2 Change in average household incomes during main lockdown period, 2020 Source: IFPRI SAM multiplier models, C. Breisinger et al., Impact of COVID-19 on the Egyptian Economy: Economic Sectors, Jobs, and Households, MENA Policy Note 6 (Cairo: IFPRI, 2020); M. Raouf, D. Elsabbagh, and M. Wiebelt, Impact of COVID-19 on the Jordanian Economy: Economic Sectors, Food Systems, and Households, MENA Policy Note 9 (Cairo: IFPRI, 2020). Note: Change is compared with same period in 2019 for each country. -25% -20% -15% -10% -5% 0% Quintile 4 Quintile 3 Quintile 2 Poorest quintile All households Wealthiest quintile Urban Rural Egypt Jordan Sudan miDDle east anD noRth afRica 83 https://doi.org/10.2499/p15738coll2.133764 https://doi.org/10.2499/p15738coll2.134132 https://doi.org/10.2499/p15738coll2.134132 and its impact on long-term economic stability remains to be seen. OUTLOOK FOR POST-COVID-19 RECOVERY Agriculture and agrifood systems are playing a stabiliz- ing role in the MENA region during the COVID-19 crisis, and these systems remain well positioned to support post-pandemic economic recovery. However, the role and post-pandemic potential of the agrifood system will depend on the successful containment of the virus in the region and globally; on government investments; and on the prevailing policy, political, and business environments. Political transitions and conflicts in some of the MENA countries, notably, Libya, Sudan, Syria, and Yemen, will likely dominate post-pandemic recovery. Similarly, smart, future-oriented public investments will be key for raising the potential of the agrifood system to support recovery and the longer-term transforma- tion of economies. Recent and ongoing studies show that demand for digital tools has significantly increased during the pandemic.14 Indeed, those sectors that are digitalized, like food deliveries, have been less affected by the crisis. This shift offers an opportunity to accel- erate digitalization to reduce the vulnerability of the food system in the future. Increasing public and private investments in digitalization can be transformative — from providing farmers with better information through digital extension services to link smallholder farmers to markets, to better policymaking using digital tools like the recently released Agricultural Investment Data Analyzer (AIDA).15 In the process, emphasis should be placed on promoting digital inclusion for low-skilled and illiterate people in the region. The pandemic is also a strong reminder for countries to rethink their agricul- tural investment priorities to include (climate) resilience, nutrition, and environmental aspects; diversify food imports and exports; and improve the business climate to allow farmers, food processors, and traders to pros- per and grow. 84 Regional Developments M ar 2 02 0 ap r 20 20 M ay 2 02 0 Ju n 2 02 0 Ju l 20 20 au g 2 02 0 Se p 20 20 O c t 20 20 n O v 20 20 D ec 2 02 0 Ja n 2 02 1 lO ck D O w n S a n D h ea lt h M ea Su re S � E g yp t b an s p u b lic g at h er in g s an d fl ig h ts , s u sp en d s sc h o o l a n d w o rs h ip a ct iv it ie s � E g yp t re ce iv e s va cc in e fr o m C h in a, o p en s o n lin e re g is tr at io n � Jo rd an e n fo rc e s cu rf ew s an d m o b ili ty r e st ri ct io n s � S u d an in tr o d u ce s cu rf ew s, c lo se s la n d b o rd er s an d s ch o o ls � Tu n is ia im p o se s tr av el r e st ri ct io n s, c lo se s sc h o o ls , r el ig io u s in st it u ti o n s, a n d m ar ke ts � S u d an ’s tr an si ti o n al g o ve rn m en t i n cr ea se s h ea lt h b u d g e t St iM u lu S � E g yp t al lo ca te s st im u lu s p ac ka g e � Jo rd an o ff er s lo w -i n te re st lo an s fo r SM E s, r ec ei ve s IM F em er g en cy s u p p o rt � Tu n is ia c re at e s in ve st m en t f u n d s an d s ta te g u ar an te e fo r n ew c re d it s � Jo rd an e st ab lis h e s re lie f f u n d � S u d an p ro vi d e s ta x b re ak fo r sm al l b u si n e ss e s � S u d an in cr ea se s p u b lic s ec to r w ag e, a llo ca te s fu n d s fo r co m m o d it ie s se ct o r � Tu n is ia w ai ve s b u si n e ss V A T, a llo w s lo an p ay m en t d ef er m en ts � Tu n is ia a p p ro ve d fo r IM F lo an SO ci a l pr O te c ti O n � E g yp t in cr ea se s p en si o n s, b eg in s fin an ci al a ss is ta n ce to in fo rm al w o rk er s � Tu n is ia a p p ro ve s ca sh tr an sf er s fo r to u ri sm s ec to r em p lo ye e s � Tu n is ia a llo ca te s fu n d s fo r u n em p lo ye d , a p p ro ve s ca sh tr an sf er p ro g ra m fo r vu ln er ab le g ro u p s � E g yp t ad d s 10 0, 0 0 0 fa m ili e s to T ak af u l a n d K ar am a p ro g ra m � Jo rd an c re at e s ca sh tr an sf er p ro g ra m fo r se lf- em p lo ye d a n d u n em p lo ye d , i n cr ea se s ca sh tr an sf er s to p o o r h o u se h o ld s � S u d an a p p ro ve s ca sh tr an sf er s to th e p o o re st h o u se h o ld s � Jo rd an a llo w s h ar d -h it c o m p an ie s to c u t e m p lo ye e sa la ri e s S o u rc e: F o r C O V ID -1 9 d at a, J o h n s H o p ki n s U n iv er si ty , C SS E (u p d at ed M ar ch 8 , 2 02 1) . F o r p o lic y d at a, IF PR I, C O V ID -1 9 Po lic y R e sp o n se P o rt al (a cc e ss ed M ar ch 2 02 1) a n d n ew s re p o rt s. N o te : C o u n tr ie s an d p o lic ie s in cl u d ed h er e w er e se le ct ed to p ro vi d e an in d ic at io n o f t h e ty p e s o f a ct io n s ta ke n in th e re g io n . M ID D LE E A ST A N D N O R TH A FR IC A C O V ID -1 9 TI M E LI N E , M A R C H 2 02 0 –J A N U A R Y 2 02 1 0 1 0 0 2 0 0 3 0 0 4 0 0 5 0 0 6 0 0 Daily new confirmed cases per million people (7-day rolling average) S u d an Tu n is ia E g yp t Jo rd an CENTRAL ASIA KAMILJON AKRAMOV, ROMAN ROMASHKIN, AND JARILKASIN ILYASOV Kamiljon Akramov is a senior research fellow in the Development Strategy and Governance Division, International Food Policy Research Institute (IFPRI), Washington, DC. Roman Romashkin is deputy director of the Eurasian Center for Food Security (ECFS), Lomonosov Moscow State University, Moscow. Jarilkasin Ilyasov is a senior research analyst in the Development Strategy and Governance Division, IFPRI, Washington, DC. Central Asia faced unprecedented challenges in 2020 as the global pandemic compounded exist- ing problems facing the region. These included the growing effects of climate change, unstable commod- ity markets, and a heavy reliance on remittances and undiversified trade flows. Unlike other recent shocks, COVID-19 and the associated policy responses forced Central Asians to change daily practices and routines, many essential to their livelihoods, and disrupted con- nections at the local, regional, and global levels. The short-term response by governments helped to buf- fer the shock, while the agriculture sector proved fairly resilient. Recovery in the main destination countries for Central Asia’s migrant laborers has already helped restore flows of remittances. For long-term transfor- mation of the region’s food system, however, the shock has highlighted weakness in social safety nets and dig- ital connectivity, as well as the risk of relying heavily on remittances and a limited set of exports. POLICY RESPONSES The pandemic policy responses implemented by Central Asian governments appear to have been timely and appropriate. Governments pursued a mix of policies to address the health and economic needs of the population and, at the same time, to stimulate business activities in an effort to limit harm caused by pandemic restrictions. These policy responses included (1) measures to contain the spread of the virus, such as strict limits on population movement and public gatherings, restrictions on domestic and foreign travel, and lockdowns; (2) measures to miti- gate impacts on household welfare and food security, such as wage and unemployment support, tax waiv- ers for individuals, and social protection measures; and (3) fiscal measures to revive the economy, includ- ing economic and financial stimulus and tax waivers for businesses.1 The overall cost of these fiscal rev- enue and expenditure measures ranged between 3 and 5 percent of GDP across countries. Monetary authorities in Tajikistan and Uzbekistan also provided macro-level financial support, including liquidity injections into banks, reductions in reserve require- ments, and direct funding for lending to the real sector (goods and services).2 Several countries, among them Kazakhstan and Russia, also implemented trade restrictions and price controls, discussed below. ECONOMIC, TRADE, AND REMITTANCE IMPACTS Despite swift policy responses to the pandemic, Central Asian countries suffered substantial impacts on their economies, household welfare, and food and nutrition security. The pattern of impacts fol- lowed a similar course across the region. Initially, government-mandated lockdowns and other restric- tions caused a contraction of economic and business activities, especially in tourism, hospitality, wholesale and retail trade, passenger and freight transportation, and other services. This reduced incomes, weakened consumer demand, and reduced household welfare and food security. In Uzbekistan, for example, around 85 percent of small and medium enterprises (SMEs) were forced to shut down by the end of March, and in the following months unemployment rose rapidly.3 The share of Uzbekistan’s households with at least one 86 Regional Developments member actively working dropped from 84 percent to 43 percent. By early June, the situation had improved somewhat, with 78 percent of SMEs open for busi- ness.4 Similar trends were seen in other Central Asian countries. At the macro level, Kazakhstan and Kyrgyzstan reported contractions in GDP of 2.8 percent and 8.1 percent, respectively, while Uzbekistan reported growth of only 0.4 percent.5 The drop in growth rates was precipitated by large declines in industrial pro- duction and international and domestic trade, as well as services. Agriculture, however, recorded relatively robust growth rates despite the limited availability of and access to imported farm inputs (feed, fertiliz- ers, and pesticides) during the spring sowing season, which was caused by higher import prices stemming from currency devaluations, logistical difficulties at the border, and a rapid decrease of inventories.6 In January–September 2020, agricultural output grew by 5.1 percent in Kazakhstan, 2.7 percent in Kyrgyzstan, and 3.4 percent in Uzbekistan.7 Tajikistan’s overall economy, in contrast, grew at a relatively robust rate of 4.2 percent in the first three quarters of 2020; this resil- ience is credited to timely government support to the economy and intensified land use in agriculture.8 The pandemic also exacerbated structural vulnera- bilities in the region’s economies, especially exposure to commodity price volatility (most notably in energy prices) and heavy dependence on a few commodi- ties and trading partners. Energy exporting countries (Kazakhstan, Turkmenistan, and Uzbekistan) were hit hard by a sharp decline in oil and natural gas demand and prices. After dropping to US$23 per barrel in April from US$66 in December 2019, oil prices partially recovered, rising above US$40 in June; however, at the end of 2020, oil was still trading at about 30 percent below pre-pandemic levels.9 As a result, Kazakhstan’s oil exports declined by more than 20 percent in the first three quarters of 2020, and its total export of goods declined by more than 18 percent.10 The value of Uzbekistan’s natural gas exports declined dramat- ically — by more than 70 percent — but its total value of exports of goods rose slightly because of higher gold prices, with increased gold exports more than compensating for the decline in energy exports.11 Around the region, the negative impact on exports of services, primarily tourism and transportation, was severe — exports of services from Kazakhstan fell 34.3 percent; from Kyrgyzstan, 51.8 percent; and from Uzbekistan, 42.6 percent.12 Intraregional trade has contributed to mitigation of the pandemic’s adverse effects on food and nutri- tion security in the region. For example, Kyrgyzstan increased agrifood exports by 25 percent to markets in the Commonwealth of Independent States (CIS), including Russia. However, Kazakhstan initially banned the export of wheat and wheat flour, later replacing the ban with export quotas. Kazakhstan also intro- duced a six-month ban on export of live animals, and Kyrgyzstan followed suit in late 2020. These restric- tions raised food security concerns in food-importing Central Asian countries, some of which rely on Kazakhstan for half or more of their imported calories. In Uzbekistan, the amplified food security concerns led policymakers to put a brake on wheat market lib- eralization reform and to maintain the country’s wheat self-sufficiency policy and price regulations. Such pol- icies impede the allocation of additional arable land for high-value horticulture crops, like fruits and vegeta- bles, in which Uzbekistan has a comparative advantage and which could support rural transformation.13 The pandemic-related disruption of remittance flows initially put additional pressure on Central Asian economies. Kyrgyzstan and Tajikistan, in particular, were hit by declining remittances from the Russian Federation. When the Russian economy suffered the double blow of the pandemic and falling oil prices, deterioration of its labor market and depreciation of the Russian ruble reduced opportunities and wages for migrant labor from Central Asia. Our analysis suggests that total monthly remittances from Russia to Central Asia dipped substantially from March to May 2020 but recovered in June. Similarly, the average amount of individual remittance transfers from Russia to Central Asian countries through the payment systems fell in March 2020 to about 50 percent of 2019 levels for that month, but by June reached nearly 70 percent of 2019 levels (Figure 1). At the country level, remittances from the Russian Federation to Kyrgyzstan, Tajikistan, and Uzbekistan declined by 23.6 percent, 38.7 percent, and 13.1 percent, respectively, in the first half of 2020, compared with the same period in 2019. It is worth noting that the pandemic-related declines in remittances to Tajikistan centRal asia 87 and Kyrgyzstan are comparable to those resulting from the 2015 Russian financial crisis (caused by sharp declines in energy prices). In contrast, remittances to Uzbekistan appear to be more resilient now compared with the previous crisis. Evidence suggests that, globally, countries with robust digital connectivity mitigated up to half of the negative economic impacts of the pandemic by shift- ing education, healthcare, and public services as well as retail trade to online platforms.14 However, digi- tal connectivity in Central Asian countries is generally poor, especially in rural areas. This isolation restricted economic and social opportunities during the lock- down. As a result, many households and individuals in the region missed out on employment opportunities and could not access quality education, healthcare, or other public services.15 IMPACT ON HOUSEHOLDS The pandemic has had a significant negative impact on household welfare, food security, and nutrition in Central Asia. A household phone survey conducted by IFPRI in rural areas of southern Tajikistan provides evidence of these impacts, which are likely to be similar to rural areas of other countries in the region.16 Incomes have fallen for more than 40 percent of households, including both the poor and non- poor. Job losses have affected almost 20 percent of households, and even those who still have jobs face numerous workplace challenges. Migration for work remains central to livelihoods in this region, despite COVID-19. Nearly half of surveyed households in Tajikistan had at least one migrant laborer before the pandemic. About 8 percent of these migrants returned home because of the crisis. Of the approximately 45 percent of households that still had at least one migrant laborer abroad, nearly 80 percent reported reduced remittances. The pandemic shock reduced household spend- ing, especially by the poor and on food. As household incomes fell, poor households depleted their savings; and the less-poor, who generally own more, depleted their assets. These patterns played out across the region. For example, a community survey conducted by the United Nations Development Program in Uzbekistan found that the pandemic led to reduced household incomes, depleted savings, less-diversified food consumption, and job losses. These outcomes apply to both rural and urban communities.17 figure 1 Remittance flows from the Russian Federation to CIS countries through payment systems, 2019–2020. Source: Based on data from the Central Bank of the Russian Federation. Note: CIS = Commonwealth of Independent States. M ill io n U S$ U S$ 300 200 100 400 500 600 700 800 0 200 150 100 50 250 300 350 400 450 0 2019 total 2020 total 2019 average transfer (right scale) 2020 average transfer (right scale) January February March April May June July August September October November 88 Regional Developments The IFPRI phone survey also provides evidence of the impact on diets and dietary diversity. Many households switched from growing high-value crops (vegetables) back to staple food crops (cereals, mainly wheat), most likely because of food security concerns. For example, the share of households in Tajikistan cultivating cereals increased from 2018 lev- els across household subsistence plots (from 8 to 24 percent), “presidential” (subsidiary) plots (from 44 to 62 percent), and dehkan (commercial) farm plots (from 24 to 55 percent).18 Social safety nets to address poverty and food inse- curity in the region are weak, fragmented, and poorly targeted. Less than 20 percent of the population in the lowest income quintile is covered by social assistance in Kyrgyzstan and Tajikistan. In Kazakhstan, the situa- tion is somewhat better, with about 40 percent of the poorest population receiving social support from the government.19 During the pandemic, Central Asian governments have increased social protection, pri- marily through a combination of direct cash transfers (mainly Kazakhstan) and in-kind support (all countries), but levels of support remain low. LOOKING FORWARD As of early 2021, Central Asia’s main trading part- ners, China and Russia, appear to have begun a broad economic recovery, which — barring further misfortune — will likely help the region’s other econo- mies by reviving trade, investment, and remittances. Nevertheless, Central Asia will continue to face uncer- tainties and shocks. Recovery in services, particularly in the people-intensive tourism sector, will take time. Moreover, intraregional trade continues to face signifi- cant institutional and policy hurdles related to nontariff barriers to trade, sanitary and phytosanitary regulations, and public and private food safety and quality standards. Over the past two decades, Central Asia established rel- atively stable regional agrifood value chains. However, the pandemic disrupted these trade relations, as export bans and quotas for agrifood products raised food security concerns in neighboring countries. Achieving long-term regional food and nutrition security will require free and stable trade in food products, especially during crises such as the current pandemic. Central Asian countries have also reduced poverty significantly in recent years. However, the pandemic may have pushed an additional 1.5 to 1.9 million peo- ple in the region below the poverty line in 2020.20 Inequality may also increase, as individuals employed in informal sectors and services and households relying on remittances continue to suffer dispropor- tionately from the adverse effects of the pandemic. The region needs more secure, well-established social safety nets that address people’s needs without exceeding public sector resources. The pandemic has also exposed the need for struc- tural reforms to develop a competitive, business-friendly environment and promote labor mobility within countries and across the region as well as into more productive formal sectors. Likewise, the crisis has high- lighted Central Asia’s currently low rates of digital penetration and connectivity. Investments in informa- tion and communications infrastructure and digital technologies will be integral to long-term recovery in the region and will help it to expand its digital econ- omy and accelerate the implementation of modern technologies, such as precision agriculture and unified digital market platforms. These have the potential to provide enormous benefits for agrifood value chains and food system transformation. centRal asia 89 Fe b 20 20 M ar 2 02 0 ap r 20 20 M ay 2 02 0 Ju n 2 02 0 Ju l 20 20 au g 2 02 0 Se p 20 20 O c t 20 20 n O v 20 20 D ec 2 02 0 Ja n 2 02 1 lO ck D O w n S a n D h ea lt h M ea Su re S � A ll co u n tr ie s im p o se tr av el r e st ri ct io n s fo r C h in a � R u ss ia a n d U zb e k is ta n s u sp en d in te rn at io n al tr av el � K az ak h st an a n d K yr g yz st an d ec la re s ta te o f e m er g en cy � Pa rt ia l l o ck d o w n s in m o st c o u n tr ie s, s tr ic t l o ck d o w n s in s o m e ci ti e s � Ta ji k is ta n r e st ri ct s p u b lic g at h er in g s � U zb e k is ta n im p o se s st ri ct lo ck d o w n p lu s st ay -a t- h o m e ca m p ai g n, in cr ea se s fu n d in g fo r h ea lt h ca re a n d q u ar an ti n e s St iM u lu S � K az ak h st an , U zb e k is ta n , a n d K yr g yz st an o ff er t ax w ai ve rs a n d e xt en si o n s � U zb e k is ta n p ro vi d e s in te re st s u b si d ie s � K yr g yz st an a d o p ts fi sc al p ac ka g e to s u p p o rt b u si n e ss r ec o ve ry � Ta ji k is ta n a n n o u n ce s fis ca l m ea su re s an d t ax w ai ve rs to s u p p o rt b u si n e ss e s � R u ss ia s u p p o rt s te m p o ra ry jo b c re at io n fo r th e u n em p lo ye d SO ci a l pr O te c ti O n � R u ss ia a n n o u n ce s co m p en sa ti o n fu n d fo r q u ar an ti n ed c it iz en s an d b u si n e ss e s � K az ak h st an p ro vi d e s m o n th ly c o m p en sa ti o n to u n em p lo ye d � Ta ji k is ta n in st it u te s p ay m en ts to v u ln er ab le fa m ili e s, s u sp en d s u ti lit y fe e s � U zb e k is ta n in cr ea se s fu n d s to s u p p o rt lo w -i n co m e fa m ili e s an d fa m ili e s w it h ch ild re n FO O D S ec tO r in te rv en ti O n S � M o st c o u n tr ie s b eg in c lo se m o n it o ri n g o f f o o d p ri ce s an d b u ild e m er g en cy fo o d s u p p lie s � R u ss ia s u b si d iz e s flo u r p ro d u ce rs � K az ak h st an im p o se s p ri ce c ap s an d r ed u ce s V A T o n fo o d � M o st c o u n tr ie s im p o se tr ad e re st ri ct io n s, in cl u d in g e xp o rt b an s, o n st ap le c ro p s an d li ve st o ck � R u ss ia a n d K az ak h st an o ff er c o n ce ss io n al lo an s to fa rm er s � U zb e k is ta n in it ia te s a fo o d a id c am p ai g n � U zb e k is ta n p ro vi d e s su p p o rt to h o rt ic u lt u ra l e xp o rt s th ro u g h su b si d ie s S o u rc e: F o r C O V ID -1 9 d at a, J o h n s H o p ki n s U n iv er si ty , C SS E D at ab as e (u p d at ed M ar ch 8 , 2 02 1) . F o r p o lic y d at a, IF PR I, C O V ID -1 9 Po lic y R e sp o n se P o rt al (a cc e ss ed M ar ch 2 02 1) a n d n ew s re p o rt s. N o te : C o u n tr ie s an d p o lic ie s in cl u d ed h er e w er e se le ct ed to p ro vi d e an in d ic at io n o f t h e ty p e s o f a ct io n s ta ke n in th e re g io n . T h e R u ss ia n Fe d er at io n is in cl u d ed b ec au se it is a c ru ci al tr ad e p ar tn er fo r C en tr al A si an co u n tr ie s, a n d it is a m aj o r d e st in at io n fo r re g io n al m ig ra n t l ab o r. C E N TR A L A SI A C O V ID -1 9 TI M E LI N E , F E B R U A R Y 2 02 0 –J A N U A R Y 2 02 1 0 2 5 0 2 0 0 1 5 0 1 0 0 5 0 3 0 0 3 5 0 4 0 0 4 5 0 Daily new confirmed cases per million people (7-day rolling average) K yr g yz st an R u ss ia K az ak h st an Ta ji k is ta n U zb e k is ta n SOUTH ASIA SHAHIDUR RASHID, AKHTER AHMED, AND ABDUL WAJID RANA Shahidur Rashid is director for South Asia, International Food Policy Research Institute (IFPRI), New Delhi. Akhter Ahmed is country representative, IFPRI, Dhaka. Abdul Wajid Rana is program leader, Pakistan Strategy Support Program, IFPRI, Islamabad. Prior to the pandemic, South Asia enjoyed years of economic progress, with fast growth, a rapid reduc- tion in poverty, and improvements in many social indicators.1 Although poverty and malnutrition rates remained high across the region, evidence of eco- nomic and food system transformation — notably, the declining share of agriculture in the region’s economy, rising wages, and changes in dietary pat- terns — was strong.2 The pandemic interrupted this long streak of impressive performance, and early pre- dictions of its likely impact were dire. The region’s GDP growth forecast was revised downward by 14 percent and overall unemployment was projected to increase by 28 percent, with youth unemployment perhaps reaching 72 percent.3 Alarming predictions were also made regarding poverty and food insecu- rity, with extreme poverty expected to increase by as much as 50 percent, equivalent to an additional 72 million ultra-poor.4 But the actual impact thus far has been less grim. Food systems and health sys- tems have shown remarkable resilience, economic contraction has been less severe than expected, and the overall outlook appears more positive. Yet, pandemic-related challenges remain, and the expe- rience has highlighted vulnerabilities that the region will need to tackle to ensure a better food system for future generations. COVID-19 SHOCKS AND POLICY RESPONSES PREVENTIVE MEASURES South Asian political leadership took preventive measures seriously. Lockdowns were initiated in all countries in the first days of the pandemic, when case numbers remained in the hundreds and deaths near zero. Common measures included closing academic institutions, bans on public gatherings, suspension of sporting events, and travel bans. Initially announced for three weeks, strict lockdowns were either extended or later reimposed in almost all South Asian countries, lasting from 3 weeks in Afghanistan up to 17 weeks in Nepal.5 The targeted lockdowns that followed — such as quarantining specific areas or communities in cities and restricting large gatherings and restaurant occu- pancy — have generally been much longer. Both the planning and enforcement of initial lockdowns varied across the region. For example, India imposed a strict travel ban, leaving many migrant workers stranded; but Bangladesh declared its lockdown a “general holiday” without a travel ban, and 10 million city-dwellers were able to return to their villages. In Pakistan, however, the prime minister deemed a complete lockdown unfeasi- ble, given the country’s level of poverty and the nature of livelihoods. Impacts of the lockdowns in several countries appear to be reflected in infection rate trends (Figure 1). This is particularly true for the Maldives, which suffered a major spike in infections after lifting travel restrictions in July 2020 and another following the rebound in tourism during the Christmas holiday. Tourism likely played a role in Nepal as well, as its first spike correlates with the decision to reopen for trekking and other tourism. Regionwide, the initial lockdowns kept both infec- tions and COVID-19-related deaths low, but a spike in late summer brought the number of cases up to 1,500 per million in September. But new measures — such as targeted quarantines and strict enforcement of mask-wearing — brought the numbers down quickly. As of January 2021, cumulative cases had reached 12 million and related deaths 175,000. These are impressive numbers for the most densely populated developing region. south asia 91 POLICY ACTIONS TO MITIGATE IMPACTS With low case numbers, many experts considered the region’s initial lockdowns to be a bigger shock to the economy than the pandemic itself.6 Moreover, enforce- ment of the lockdowns was challenging in part because they coincided with the winter harvest and spring plant- ing, and with several major religious festivals.7 These celebrations were overshadowed by images of the lock- downs’ impacts — such as thousands of migrant workers walking on India’s empty highways and normally bus- tling cities at a standstill. These images shaped the region’s policy responses — early government actions involved a wide range of policies to save lives, protect livelihoods, and stimulate economies. Key policy responses in the region, including macroeconomic policy responses, have been tracked by several institutions and development partners, including IFPRI, the Asian Development Bank, and the World Bank. Here, we focus on the policies related to agriculture, social protection, agricultural pricing, and labor markets. From the onset of the pandemic, experts agreed that the region’s top policy priorities should be scaling up social protection, supporting agriculture, and main- taining food price stability. These priorities were clearly reflected in the programs initiated by Bangladesh, India, and Pakistan. Our initial estimates of the allocation of public funds point to three patterns in regional spend- ing (Figure 2). First, spending in response to the crisis has been high, ranging from 1.4 percent of GDP (about US$1.2 billion) in Sri Lanka to over 12 percent (about $287 billion) in India. Second, except for Afghanistan, the overwhelming share of government expenditure was for monetary and fiscal policy measures, suggesting that while initial emphasis was on protecting the poor and sta- bilizing food prices, the focus later shifted to stabilizing figure 1 COVID-19 cases in South Asia Source: Johns Hopkins University, CSSE COVID-19 Data (updated March 11, 2021). MAR 2020 APR 2020 JUN 2020 JUL 2020 AUG 2020 SEP 2020 NOV 2020 OCT 2020 DEC 2020 JAN 2021 MAY 2020 Maldives Sri Lanka India Pakistan Nepal Bangladesh Afghanistan Bhutan0 300 250 200 150 100 50 D ai ly n ew c o n fir m ed c as es p er m ill io n p eo p le (7 -d ay r o lli ng a ve ra g e) 92 Regional Developments economies. Third, the cost of scaling up agriculture and social protection programs accounted for more than 15 percent of the total pandemic-response budget (as shown in Figure 2), even though the region’s three larg- est economies (India, Pakistan, and Bangladesh) already had large safety-net and agricultural support programs.8 RESILIENCE AND VULNERABILITIES IN SOUTH ASIAN FOOD SYSTEMS EVIDENCE OF RESILIENCE The pandemic has highlighted both resilience and vul- nerabilities in the transformation of food systems in South Asia. Recent estimates of food price stability, agri- cultural growth, wage rates, unemployment, and poverty rates have proved most of the dire predictions wrong and suggest that the region’s policy actions are paying off.9 Agriculture sectors have registered growth in almost all countries, in part because of the exemption of agricul- ture from lockdown restrictions and effective use of the existing safety-net and agricultural development infra- structure in responding to the crisis. In terms of GDP growth, all countries performed better than the forecasts (Figure 3).10 Bangladesh achieved 5.4 percent real GDP growth, and Nepal achieved 2.4 percent growth. But the region’s two largest economies, India and Pakistan, experienced negative growth of −7.2 percent and −0.4 percent, respectively, enough to cause an overall contraction of 5.4 percent in the regional economy. Recent surveys conducted by IFPRI and its part- ners suggest that public transfer systems for food security, health, and nutrition have worked well in the region’s large countries. In India, two recent studies show that the initial support package, called Pradhan Mantri Garib Kalyan Yojana (PMGKY), was timely and effective in reaching smallholders.11 Similarly, sur- veys by IFPRI and national partners in seven Indian states indicate that disrupted health services have been restored and are adapting to the new challenges. One of the key conclusions of the study is that India’s rapid policy actions and effective coordination across national, state, and local institutions helped buffer the initial shocks to health and nutrition programs.12 This success reflects India’s decades of investments in social-safety-net infrastructure, particularly recent investments in direct and cash benefit transfers (see Chapter 5).13 figure 2 Budget allocation by pandemic policy response categories in South Asia Source: Bangladesh: Bureau of Statistics; India: Press Note on First Advance Estimates of National Income 2020/21, Ministry of Statistics and Programme Implementation; Nepal: Central Bureau of Statistics; Pakistan: Bureau of Statistics and State Bank of Pakistan; Bhutan, Maldives, and Sri Lanka: World Economic Outlook, IMF, October 2020; COVID-19 Policy Response Portal, IFPRI; Policy Responses to COVID-19, IMF. Note: GVA = gross value added. The shares of expenditure on safety nets and agriculture represent only the costs of scaling up the existing programs. 50 40 30 20 10 60 70 80 90 Sh ar e in to ta l C O V ID -1 9 re sp o ns e ex p en d it ur e (% ) E xp end iture as share o f G V A (% ) 100 0 10 8 6 4 2 12 14 16 18 20 0 Agricultural stimulus Other stimulus Social protection Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka Total expenditure as % of GVA south asia 93 Pakistan’s Ehsaas program, which provides direct cash transfers, targeted 12 million households (about 80 million people) with a budget of $900 million. Coverage was extended to an additional 6 million fam- ilies during the pandemic, suggesting that almost half of Pakistan’s population was covered by these pro- grams; such rapid expansion was possible because of the government’s earlier investments in building the necessary infrastructure. Bangladesh also has several social protection programs that provide cash and food transfers to vul- nerable populations. In response to the pandemic, the government increased the social protection bud- get from 2.9 percent of national GDP in 2019/20 to 3.01 percent in 2020/21 (reaching about $11.24 billion). In addition, as an Eid-ul Fitr gift from the prime minister, the government made a one-time cash transfer of about BDT 2,500 to each of five million poor families, totaling BDT 12.5 billion (roughly $150 million). This expansion of transfers was made possible by earlier government investments in mobile financial services, including digi- talization of social transfers.14 Recent regional poverty estimates suggest that safety nets and other social transfer programs have largely performed well. In Bangladesh, over three-quarters of the vulnerable nonpoor are esti- mated to have fallen below the poverty line in June–July 2020, largely because of rising unemploy- ment.15 But the country has recovered from the initial shock, making it likely that the actual poverty rate is lower than the government’s official third-quarter esti- mate of 29.5 percent (still up 9 percent over 2019). Moreover, the most recent round of an IFPRI–Cornell phone survey (completed in January 2021) suggests that many food security indicators improved after dras- tically worsening in the pandemic’s early months (when shares of food-secure households plummeted from 53 percent to 12 percent in rural areas and 65 percent to 8 percent in urban areas), and are now stronger than they were in 2019.16 Pakistan’s poverty rate was initially projected to increase from 27 percent to 43 percent, but things grad- ually improved after the economy was re-opened. By the end of 2020, the estimated poverty rate was only about a percentage point higher than the pre-pandemic rate.17 Surveys conducted to assess the pandemic’s impact at the end of 2020 found that 90 to 95 percent of Pakistani workers affected by the initial shock had recovered; and 36 percent of households felt the pan- demic had had a serious financial impact.18 figure 3 Growth in real GDP in 2019 and 2020, and 2020 forecast Source: Bangladesh: Bureau of Statistics; India: Press Note on First Advance Estimates of National Income 2020/21, Ministry of Statistics and Programme Implementation; Nepal: Central Bureau of Statistics; Pakistan: Bureau of Statistics and State Bank of Pakistan. Note: Regarding the estimates, fiscal years for Bangladesh, Nepal, and Pakistan are July–June; April–March for India. Pe rc en t 6 -10 -8 -6 -4 -2 0 2 4 Total real GDP growth Agricultural GDP growth Forecasted GDP growth Bangladesh IndiaNepal Pakistan 94 Regional Developments RISKS AND VULNERABILITIES The pandemic has highlighted several vulnerabilities of South Asian food systems. Perhaps most important is the vulnerability of South Asian labor markets, espe- cially in the nonfarm and informal sectors, which are central to economic and food systems transformation. These sectors were decimated by the strict lockdowns. Unable to work, migrant workers returned to their home villages, creating labor scarcities in regions with agricultural surpluses that depend on these informal workers. In agricultural deficit regions, food insecu- rity increased for wage workers due to low wages, job losses, and reduced incomes. While there are encour- aging signs of recovery, some impacts may linger in the long run. The pandemic-related short-term shocks to labor markets may also have long-term consequences in terms of nutrition, poverty, and overall wellbeing, par- ticularly for many South Asian children.19 As in other developing regions, nutritious diets are not afford- able for the poor in South Asia.20 In India, for example, almost half of all poor people cannot afford a nutri- tious diet.21 With massive unemployment in informal sectors, poor households have suffered a reduction in diet quality that will likely have long-term impacts on productivity.22 In addition, the majority of chil- dren were deprived of formal schooling during the pandemic because they did not have Internet access. Unless appropriate policy actions are taken, the pan- demic’s lasting impacts will exacerbate inequality, reduce lifetime earnings, and limit the ability of these children to escape poverty in the future. South Asia’s international remittance inflows also proved to be vulnerable. More than 11.5 million South Asians, mostly unskilled laborers, work abroad and in 2019 remitted an estimated $108 billion.23 As of December 2020, remittance flows had declined by about $10 billion for the region.24 For South Asia’s immigrant workers, who are generally poor and are often the main breadwinners for their families, this has meant a significant loss of income. The drop in remit- tances also has macroeconomic implications, as these flows are an important source of foreign exchange for some countries, accounting for as much as 28 percent of GDP in Nepal and 8 percent in Pakistan. While these new challenges must be tack- led, policymakers should not lose sight of the old challenges as the region seeks to promote an inclu- sive and sustainable food system transformation. South Asia faces continuing and, in some cases, inten- sifying problems related to climate change, natural disasters, poor food safety, and distortionary policies. The fall armyworm devastated Afghanistan, Pakistan, and parts of India and Nepal in 2020; Bangladesh struggled with flooding during the pandemic; and in India, bird flu caused a nationwide food-safety scare. Distortionary policies, and increasing costs of imple- menting them, remain despite overwhelming evidence of their negative impacts and of the potential to repur- pose these much-needed resources for climate-smart investments or to build robust food-safety institutions. For example, public food transfer programs linked with agricultural price policies are fraught with leakage and inefficiencies.25 But reforming such longstanding agri- cultural policies will be difficult for South Asia, as the recent farmer protests in India have shown.26 LOOKING FORWARD Agriculture and food systems in South Asia have demonstrated unexpected resilience in the face of the pandemic. However, while there are success stories that can inform future policy, there is no room for com- placency. Growth in the nonfarm and service sectors is an essential precondition for economic and food system transformation, and COVID-19 has reminded South Asia how vulnerable these sectors are. During the years of rapid growth, the share of populations engaged in these sectors grew rapidly, but infrastruc- ture and institutions to protect the vulnerable against large-scale shocks did not. This was particularly evi- dent from the plight of migrant workers and the sharp increase of food insecurity in major urban centers fol- lowing the lockdowns. These vulnerabilities must be addressed. At the same time, the region must not lose sight of the structural challenges to transforming eco- nomic and food systems. Tackling those challenges will require long-term commitment. There is rea- son to hope that the pandemic experiences will help to catalyze a shift in policy priorities. The recently announced Indian budget — with significant increases for addressing climate change, health and nutrition, and enhanced biosecurity preparedness — suggests that change is on its way. south asia 95 M ar 2 02 0 ap r 20 20 M ay 2 02 0 Ju n 2 02 0 Ju l 20 20 au g 2 02 0 Se p 20 20 O c t 20 20 n O v 20 20 D ec 2 02 0 Ja n 2 02 1 lO ck D O w n S a n D h ea lt h M ea Su re S � B an g la d e sh a n n o u n ce s “g en er al h o lid ay ” � B an g la d e sh e n d s g en er al h o lid ay , f o cu se s o n h ea lt h p re ca u ti o n s � In d ia a n d N ep al b eg in lo ck d o w n � P ak is ta n a n n o u n ce s “s m ar t l o ck d o w n” � P ak is ta n b eg in s lo ck d o w n, e xe m p ti n g fa rm s ec to r, g ro ce ri e s � N ep al e n d s lo ck d o w n � A fg h an is ta n b eg in s lo ck d o w n, in p la ce u n ti l A u g u st � P ak is ta n b eg in s re o p en in g � B an g la d e sh im p o se s cu rf ew , b an s fli g h ts � In d ia r em o ve s cu rf ew , a llo w s sm al l g at h er in g s � P ak is ta n s e ts u p n at io n al c o o rd in at io n co m m it te e � B an g la d e sh r em o ve s al l m o ve m en t r e st ri ct io n s � S ri L an k a ex te n d s w o rk -f ro m -h o m e p er io d � P ak is ta n r ei m p o se s sm ar t l o ck d o w n � B an g la d e sh , I n d ia e xt en d lo ck d o w n � In d ia la rg el y o p en St iM u lu S � B an g la d e sh a n n o u n ce s st im u lu s fo r ex p o rt s � P ak is ta n fi sc al p ac ka g e su p p o rt s SM E s, in d u st ry � B an g la d e sh p re p ar e s la rg e st im u lu s p ac ka g e � P ak is ta n e as e s lo an p ay m en ts � B an g la d e sh r ec ei ve s co n ce ss io n al lo an s fo r p an d em ic r ec o ve ry � B an g la d e sh p ro vi d e s ca sh in ce n ti ve s to e xp o rt er s � In d ia a p p ro ve s st im u lu s fu n d s fo r SM E s, in fr as tr u ct u re � N ep al r ec ei ve s lo an fo r ag ri cu lt u re s ec to r an d r ec o ve ry SO ci a l pr O te c ti O n � P ak is ta n e xp an d s E h sa as c as h tr an sf er s � In d ia a p p ro ve s fu n d s fo r so ci al p ro te ct io n, e m p lo ym en t g en er at io n � B an g la d e sh e xt en d s FF P � P ak is ta n d is b u rs e s ca sh to 1 2 m ill io n d ai ly la b o re rs FO O D S ec tO r in te rv en ti O n S � B an g la d e sh w ai ve s ta xe s o n an im al a n d fi sh fe ed � P ak is ta n a llo w s p ri va te s ec to r w h ea t i m p o rt s � P ak is ta n s u p p o rt s w h ea t p ro cu re m en t, fa rm in p u ts � B an g la d e sh s u b si d iz e s fe rt ili ze r se ct o r � In d ia a p p ro ve s fu n d s fo r ag ri cu lt u re � P ak is ta n la u n ch e s su p p o rt fo r fa rm in p u ts S o u rc e: F o r C O V ID -1 9 d at a, J o h n s H o p ki n s U n iv er si ty , C SS E D at ab as e (u p d at ed M ar ch 8 , 2 02 1) . F o r p o lic y d at a, IF PR I, C O V ID -1 9 Po lic y R e sp o n se P o rt al (a cc e ss ed M ar ch 2 02 1) a n d n ew s re p o rt s. N o te : C o u n tr ie s an d p o lic ie s in cl u d ed h er e w er e se le ct ed to p ro vi d e an in d ic at io n o f t h e ty p e s o f a ct io n s ta ke n in th e re g io n . SO U TH A SI A C O V ID -1 9 TI M E LI N E , M A R C H 2 02 0 –J A N U A R Y 2 02 1 0 2 0 1 0 3 0 4 0 5 0 6 0 7 0 Daily new confirmed cases per million people (7-day rolling average) B h u ta n S ri L an k a A fg h an is ta n P ak is ta n B an g la d e sh In d ia EAST AND SOUTHEAST ASIA KEVIN CHEN AND YUE ZHAN Kevin Chen is a senior research fellow, International Food Policy Research Institute (IFPRI), Beijing, and a chair professor, Zhejiang University, Hangzhou, China. Yue Zhan is a research assistant, IFPRI, Beijing. COVID-19 is having an unprecedented impact on people’s livelihoods worldwide and has triggered a severe global economic downturn. In East and Southeast Asia, however, successful containment in most countries is allowing for relatively rapid eco- nomic reopening and recovery. East Asia’s continued upturn, especially China’s, will be critical for recovery in the rest of the world. Despite the remarkable resil- ience of food systems, the effects of the pandemic on jobs and incomes in the agrifood sector have been severe and demand broad social protection programs. In addition, interregional trade and cooperation can contribute to the region’s recovery. COVID-19 has been a resounding wake-up call to better prepare our food systems for future pandemics and other disas- ters. East and Southeast Asian countries can use the recovery as an opportunity to increase investments in reorienting food systems toward more sustainable and resilient trajectories, while simultaneously addressing inequality and accelerating productivity through the development of digitalization in the agrifood sector on a much greater scale. LOCKDOWNS AND ECONOMIC LOSSES In response to the COVID-19 outbreak that emerged in East Asia in late 2019, countries in the region employed more stringent containment measures than elsewhere, including mandatory lockdowns, closing of schools and government offices, and restrictions on travel, public gatherings, and religious activities.1 On average, countries in the region declared lock- downs or a state of emergency about 17 days after confirmation of 50 cases.2 As of late 2020, East and Southeast Asia had, by and large, outpaced other developing regions in containing the pandemic. Some countries, like China and Viet Nam, were already enjoy- ing a revival of economic activity as of early 2021, with restrictions on mobility to stem the pandemic largely eased. Others, including Indonesia, the Philippines, and Myanmar, are still struggling to curb the virus’s spread (Figure 1) and have therefore kept in place or reintroduced restrictions, which are having severe eco- nomic consequences. Economic growth in East and Southeast Asia as a whole slowed significantly in 2020. Estimates suggest that the region’s total GDP grew by just 0.9 percent3 — with 2 percent growth in China off- setting the 3.5 percent contraction in the rest of the region (Figure 2). In 2021, regional growth is projected to accelerate to 7.4 percent.4 East Asia’s recovery, especially China’s strong performance, should help fuel a global rebound. Remittances from outside the region are estimated to have declined by 13 percent in 2020 as a result of the pandemic;5 but the pandemic’s effect on domestic remittances from urban to rural areas is less clear. With many urban workers losing jobs and moving back to rural areas, the likely decrease in domestic remittances will hurt many rural households. In Myanmar, for exam- ple, the sharp decline in both domestic and international remittances is likely to continue for at least a year, push- ing many households into poverty and food insecurity.6 The most serious impact of the pandemic in the region has been the devastating loss of jobs and live- lihoods. Poverty in developing East and Southeast Asian countries could increase for the first time in 20 years — and with it, food insecurity.7 Poor house- holds facing income losses will be forced to reduce food expenditures and replace expensive foods like meat and vegetables with less nutritious options.8 Estimates from the World Food Programme suggest east anD southeast asia 97 that the number of food insecure people in the region (excluding China) rose from roughly 93 million in February 2020 to about 112 million in June.9 While this figure has since declined slightly — to about 108 million as of mid-September 2020 — the crisis may have last- ing effects on diets and incidence of undernutrition among the poor. To help ease these economic burdens, almost every country in the region has implemented social protec- tion and food assistance programs, which are essential for addressing rising food insecurity.10 Measures include food aid, cash transfer programs, support to small and medium enterprises, easier access to loans, tax breaks, subsidies, and in-kind transfers including food or food vouchers and school feeding programs. Cambodia, China, Indonesia, Mongolia, and Viet Nam have all enacted some form of exemption, reduction, or deferral of social security contributions. Several countries have also increased unemployment benefits and eased requirements for receiving these benefits. A remaining challenge is to reach the urban poor, partic- ularly those in the informal sector who are not covered by existing social protection systems or cannot access public services. Inequality needs to be addressed in both short-term stimulus measures and long-term pol- icy changes for food system transformation. DISRUPTIONS TO THE FOOD SYSTEM Agricultural production has been less affected than other sectors by the global economic downturn. Globally, food supplies remained ample in 2020.11 Pandemic restrictions did temporarily disrupt agricul- tural production in some areas through labor supply shortages and farmers’ reduced access to inputs, but a major impact on agricultural production is now unlikely in the region, as East Asian countries have already begun to ease movement restrictions. However, nat- ural disasters, such as Typhoon Vongfong, which destroyed thousands of hectares of agricultural land and displaced 200,000 people in the Philippines, may affect overall crop yields.12 Beyond the farm, COVID-19 has affected all seg- ments of the food system, including processing, retailers, and markets. East Asian governments have prioritized keeping food supply chains functioning figure 1 Total COVID-19 cases per million people Source: Johns Hopkins University, CSSE COVID-19 Data, February 2021 update. Note: COVID-19 cases are cumulative through early September. 1,000 11 37 49 63 296 743 2,237 2,000 3,000 Global average 4,000 5,000 0 V ie t N am M ya nm ar Th ai la nd C hi na M al ay si a In d o ne si a Ph ili p p in es figure 2 GDP growth projections Source: World Bank, World Bank Global Economic Prospects, January 2021. 2018 2019 2020 2021 World East and Southeast Asia excluding China East and Southeast Asia China 0% 2% 4% 6% 8% -6% -4% -2% 98 Regional Developments and getting food to consumers. China was able to reduce food system disruptions by opening a “green channel” for agricultural inputs and food products, as well as exempting movement of food-system work- ers from COVID-19 lockdowns.13 Thailand created “war rooms” — joint working groups between gov- ernment departments and relevant industries — to ensure supply of specific food products such as rice, livestock, fruits and vegetables, and processed foods.14 Delivery services for groceries and restau- rant meals have expanded around the region, and in China, e-commerce companies added in-app features for contactless food delivery.15 These delivery plat- forms have helped minimize the risk of infection from crowded food markets. Evidence from China shows that, while agricultural activities are often excluded from the disease-control policies that shut down many nonfarm activities, the indirect effects of restrictions are significant because the agriculture sector has become closely integrated with the rest of the economy, especially through agri- food processing industries. Many of these have been shuttered by lockdown policies, which affects agricul- tural production and other food system components.16 Local markets throughout the region have seen price increases and volatility resulting from supply chain disruptions. For instance, retail rice prices in Lao PDR and Thailand rose about 20 percent on average in January–April 2020 compared with the same months of 2019, but rice prices fell when harvests began later in 2020. On the whole, however, food supply chains have been remarkably resilient, and domestic food prices in the region have been largely stable.17 The significance of the pandemic for East and Southeast Asian food systems thus comes less from its impact on primary production and disruptions along supply chains than from the devastating effects on jobs and livelihoods. REGIONAL COOPERATION AND INTRAREGIONAL TRADE Loss of income combined with uncertainty in 2020 have drastically reduced global demand for goods and services. As East Asian economies begin to recover, intraregional trade — particularly exports to China — has increased to replace trade lost with other regions.18 While data from China’s customs agency suggest a decline in China’s imports from the European Union and United States (despite the ambi- tious targets set by the China–US Trade Agreement signed in early 2020), there was a 7.8 percent increase in imports from the ASEAN-5 countries in the first half of 2020. Since 2019, implementation of the upgraded China–ASEAN Free Trade Area protocol has further boosted China–ASEAN trade, including agricultural trade, and ASEAN became China’s larg- est trading partner for the first time in early 2020 (Figure 3). Recovery of food demand from China has been a boon for farmers in ASEAN countries, boosting their incomes during the economic recovery period. For example, Chinese imports of durian from both Thailand and Malaysia increased in 2020.19 In their initial responses to the pandemic, sev- eral East Asian countries implemented temporary export restrictions to protect domestic food supplies. For example, Viet Nam (the world’s third-largest rice exporter) imposed an export ban on rice, though later replaced the ban with a less restrictive export quota. Cambodia also imposed a rice export ban from early April to late May. Myanmar temporarily suspended figure 3 Change in China’s imports from the ASEAN-5, US, and EU, 2019 and 2020 Source: World Bank, From Containment to Recovery, East Asia and Pacific Economic Update, October (Washington, DC: 2020). Note: ASEAN-5 countries are Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Pe rc en t -15 -20 -25 -10 -5 0 5 10 -30 Total ASEAN-5 US EU January—July 2019 January—July 2020 east anD southeast asia 99 the issuance of new export licenses from mid-March through April. Such restrictions can raise consumer prices and add to food insecurity, especially for import-dependent countries. For example, the price of Thai 5% broken rice, a benchmark global market indi- cator, immediately increased by about $100 per ton (more than 20 percent) when Viet Nam imposed its export ban. Other trade barriers were imposed to pre- vent cross-border transmission of the pandemic. For example, Indonesia and the Republic of Korea initially prohibited imports of animals and animal products from China in January and February. Such mea- sures may remain in place for some time, with serious impacts on the global food system.20 Fortunately, East and Southeast Asian countries have recognized the problematic nature of food export restrictions, and most have been lifted. The ASEAN Ministers of Agriculture and Forestry released a joint statement on suitable measures to overcome pandemic-related challenges and ensure the sus- tainable supply of sufficient, affordable, safe, and nutritious foods that meet the dietary requirements of ASEAN populations.21 The signing of the Regional Comprehensive Economic Partnership (RCEP) Agreement between ASEAN countries and partners — China, Japan, Republic of Korea, Australia, and New Zealand — in November 2020 provided crucial momentum to its members’ strong commitment to pursuing free trade and strengthening regional supply chains for post-pandemic economic recovery and stronger food systems.22 The growth of regional cooperation can also provide additional food supply safety nets to address the negative impacts of the pandemic. For example, the ASEAN Plus Three Emergency Rice Reserve (APTERR) has stockpiled 787,000 tons of rice, with 87,000 tons contributed by ASEAN member countries and 700,000 tons from China, Japan, and Korea, which can effectively address short-term emer- gencies.23 There are strong linkages within the region, and interdependencies among countries and food systems are no exception. Working together allows these countries to exchange lessons learned, address food system issues at the regional level, and build more resilient food systems for the future. TOWARD AN INCLUSIVE, SUSTAINABLE, AND RESILIENT TRANSFORMATION Even before the pandemic, there was a need for food system transformation that enhances nutrient-rich diets and public health, sustainable natural resource management, and resilience to climate change. The recovery phase offers an opportunity to address inequalities and gaps in social safety nets to ensure food security and nutrition for all. With social distanc- ing and quarantine measures unlikely to disappear any time soon, given the potential for new outbreaks, food supply chains will require expanded use of dig- ital innovations such as online platforms to optimize logistics and services. Longer-term responses should accelerate wider adoption of agricultural technologies such as remote sensing and geographic information systems (GIS) to address the impacts of climate change and environmental and natural resource degrada- tion. To enhance prevention and preparedness for the multitude of shocks that can affect food systems, sus- tained financing is also needed — guided by data and analysis — to support improvement of risk manage- ment systems, diversification of income sources, more sustainable farming practices, and a shift away from those agricultural systems that are most vulnerable to shocks. 100 Regional Developments Ja n 2 02 0 Fe b 20 20 M ar 2 02 0 ap r 20 20 M ay 2 02 0 Ju n 2 02 0 Ju l 20 20 au g 2 02 0 Se p 20 20 O c t 20 20 n O v 20 20 D ec 2 02 0 Ja n 2 02 1 lO ck D O w n S a n D h ea lt h M ea Su re S � C h in a cl o se s W u h an m ar ke t, p o ss ib le s o u rc e o f o u tb re ak � C h in a im p o se s tr av el r e st ri ct io n s an d p ar ti al m o ve m en t r e st ri ct io n s in W u h an a n d o th er c it ie s � V ie t N am d ec la re s a st at e o f e m er g en cy a n d b an s al l fl ig h ts to a n d fr o m C h in a � Jo in t s ta te m en t f ro m A SE A N D ef en se M in is te rs o n C O V ID -1 9 � T h ai la n d c lo se s al l b o rd er s an d b an s fo re ig n vi si to rs � In d o n e si a d ec la re s a p u b lic h ea lt h em er g en cy St iM u lu S � C h in a en co u ra g e s le n d in g to S M E s an d s u p p o rt s d el ay o f l o an p ay m en ts � In d o n e si a an n o u n ce s a st im u lu s p ac ka g e (U S$ 72 5 m ill io n) � T h ai la n d p la n s fo r a n ew s ti m u lu s p ac ka g e w o rt h 10 % o f G D P � M ya n m ar a n n o u n ce s IM F- a n d J IC A -f u n d ed s ti m u lu s p ro g ra m s SO ci a l pr O te c ti O n � P h il ip p in e s ap p ro ve s p ro g ra m fo r lo w -i n co m e fa m ili e s an d h ea lt h w o rk er s � M ya n m ar p ro vi d e s ca sh h an d o u ts to af fe ct ed h o u se h o ld s � T h ai la n d a n n o u n ce s p ay m en ts to 8 .4 m ill io n fa rm in g h o u se h o ld s � C am b o d ia la u n ch e s a ca sh r el ie f p ro g ra m fo r 6 0 0, 0 0 0 vu ln er ab le fa m ili e s FO O D S ec tO r in te rv en ti O n S � In d o n e si a an d R ep . o f K o re a p ro h ib it a n im al a n d a n im al -p ro d u ct im p o rt s � A si an c o u n tr ie s si g n R eg io n al C o m p re - h en si ve E co n o m ic P ar tn er sh ip A g re e - m en t ( R C E P) � C h in a o p en s “g re en c h an n el ” fo r th e m o ve m en t o f a g ri fo o d p ro d u ct s � V ie t N am a n d C am b o d ia im p o se r ic e ex p o rt b an s � M ya n m ar p ro vi d e s in -k in d fo o d tr an sf er s to v u ln er ab le h o u se h o ld s � M o st c o u n tr ie s ex em p t f o o d fr o m m o ve m en t r e st ri ct io n s � T h ai la n d c re at e s “w ar r o o m s” fo r sp ec ifi c fo o d p ro d u ct s S o u rc e: F o r C O V ID -1 9 d at a, J o h n s H o p ki n s U n iv er si ty , C SS E D at ab as e (u p d at ed M ar ch 8 , 2 02 1) . F o r p o lic y d at a, IF PR I, C O V ID -1 9 Po lic y R e sp o n se P o rt al (a cc e ss ed M ar ch 2 02 1) a n d n ew r ep o rt s. N o te : C o u n tr ie s an d p o lic ie s in cl u d ed h er e w er e se le ct ed to p ro vi d e an in d ic at io n o f t h e ty p e s o f a ct io n s ta ke n in th e re g io n . E A ST A N D S O U TH E A ST A SI A C O V ID -1 9 TI M E LI N E , J A N U A R Y 2 02 0 –J A N U A R Y 2 02 1 0 1 0 2 0 3 0 4 0 5 0 Daily new confirmed cases per million people (7-day rolling average) C h in a C am b o d ia Th ai la n d In d o n e si a P h il ip p in e s V ie t N am M ya n m ar LATIN AMERICA AND THE CARIBBEAN EUGENIO DÍAZ-BONILLA AND VALERIA PIÑEIRO Eugenio Díaz-Bonilla is the head of the Latin America and the Caribbean Program, International Food Policy Research Institute (IFPRI), Washington, DC. Valeria Piñeiro is a senior research coordinator in the Markets, Trade, and Institutions Division, IFPRI, Washington, DC. Countries in Latin America and the Caribbean (LAC) have been hit hard by the COVID-19 pandemic. In terms of death rates per 100,000 people, 8 LAC coun- tries, as of this writing, are among the top 20 countries in the world.1 Since late February and early March 2020, when most of the first cases were regis- tered, LAC governments have reacted with diverse policies, from strong lockdowns in countries such as Argentina, Chile, and Peru, to allowing economic activ- ities to continue largely uninterrupted, as in Brazil and Mexico. However, despite substantial commitments to health interventions, social protection, and employ- ment support, the region’s GDP likely declined by about 8 percent in 2020, compared to a decline of less than 4 percent for all emerging and developing coun- tries.2 As a result, the pandemic will have long-term economic and nutritional impacts. Post-pandemic, the region will need to expand sup- port for long-term transformation of LAC food systems and redesign safety nets to address both the linger- ing impacts of the crisis and the vulnerabilities that underlie these impacts. Agricultural R&D systems will need to focus not only on the chal