How much has the global economy fallen in the face of the challenges of 2022?

Suffering from a series of continuous and persistent calamities over the past two years, it is evident that global economies have suffered a severe blow. Currently, many primary economies are collapsing like waterfalls. Continents such as Asia and Africa lack availability and access to financial technology. The question is, “What are the causes of these disruptive collapses?”

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The main cause of the economic collapse is the COVID-19[feminine] pandemic. Major lockdowns have caused unemployment and supply-side shocks.

Among reporting economies in Asia and the Pacific, referring to 46 developed countries and 3 developing countries Asian Development Bank member economies, only one in four recorded relative economic growth during the coronavirus pandemic.

China’s economy has slowed significantly due to multiple shutdowns, especially in major manufacturing hubs. It has also depreciated the growth rate of economies dependent on China for trade, COU such as Thailand and Malaysia.

Many Asian economies also lacked the institutional capacity to provide relief to people and businesses during the pandemic. It was hard enough for developed countries that used banks, tax administrations and welfare agencies to distribute the relief.

However, emerging economies with huge numbers of unbanked people – 66% in Indonesia and 77% in the Philippines – narrow tax bases and limited social protection have had to resort to distributive measures.

The covid pandemic has affected the African continent just as badly, if not worse. The African Development Bank estimated that the continent’s economic growth declined by 2.1% in 2020.

The effect on economies was the reliance on essential natural resources. Among oil-exporting countries, Libya was the hardest hit, followed by Equatorial Guinea and Algeria. Among the economies dependent on metals and minerals, that of Botswana is estimated to have fallen by 8.9%.

The Mauritian economy has faced the worst fall of any tourism-centric economy. Significant exchange rate depreciations and high inflation rates in Africa could be the result, among other things, of disruptions in external financial flows, including remittances, foreign direct investment and portfolio investment.

A significant cause of the downfall is the Russian-Ukrainian war which started in February 2022.

The grueling war has caused economic fallout mainly in 6 areas; global commodity markets, direct trade links and remittances with Russia and Ukraine, the spread through cross-border production networks, financial markets and the impact on refugees. Food and fuel prices have particularly increased, hitting low-income countries hardest.

The Russian-Ukrainian war completely disrupted trade and caused skyrocketing inflation in many crucial economies around the world. Global growth is expected to slow from around 6.1% in 2021 to 3.6% in 2022-23.

That’s 0.8 and 0.2 percentage points lower than what was projected earlier in January. Extraordinarily high inflation has led to a tightening of monetary policy in many countries.

Global risks to the economic outlook have risen sharply and political trade-offs have become increasingly difficult.

Another important problem is the lack of financial accessibility and availability in Asia. There is clearly a lack of fintech in Asia, which adds to the damage caused by the presence of income inequality.

Small and medium-sized enterprises (SMEs), including micro-enterprises, play an important role in Asia’s economic development and contribute excessively to the region’s domestic production.

They accounted for 98% of all businesses and 38% of GDP in Asia between 2007 and 2012, according to the Asian Development Bank’s SME Finance Monitor 2013. Fintech and digitalization can provide various opportunities to overcome constraints by enabling SMEs to have better access to finance.

This could be done by using branchless banking technologies like online banking as well as engaging in peer-to-peer lending or crowdfunding.

One of the most important issues the commission should tackle is how to harness the power of digitalization to unlock SME productivity and growth.

The press believes that diplomats would be required to take decisive action that creates an enabling environment where fintech can thrive by rethinking regulatory policies to induce more innovation.

It would be extremely useful to address this issue together by exchanging country experiences and challenges in fintech and SME development among policy makers in Asia.

Africa, on the other hand, has observed that the pace of skills and technology development and innovation remains extremely slow, possibly due to the lack of a skilled university-level workforce. in practical technological development.

Added to this is the lack of high-quality laboratories and equipment, little or no resources for long-term funding, and weak private sector initiatives. What is needed is for the committee to work together to extract solutions from experiential circumstances and effectively manipulate economic policies. to build a stronger policy framework leading to development

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