According to Oxford Economics, the shutdown of schools during the epidemic might cost numerous Asian nations, including India, Indonesia, Malaysia, the Philippines, and Thailand, more than $500 billion in potential economic development. Each of these countries may see an average yearly loss of 0.3% to 0.8% of potential GDP from 2021 to 2035, according to an analysis by an economic advising business.
Due to the lengthy shutdown of schools due to the Covid epidemic, students were forced to switch from in-person instruction to distance learning for longer periods of time. The Philippines had the longest period of school closures among the aforementioned nations, spanning almost 18 months from February 2020 to March 2022.
The outcome is that these nations’ combined GDP is estimated to have lost roughly $511 billion. According to the analysis, the lengthy closure of schools may cause the Philippines to experience the biggest loss in potential GDP and investments throughout the stated time. Thailand, on the other hand, is anticipated to suffer the least loss in potential GDP and investments since its shutdown period is the shortest at 10 months.
However, the survey also emphasized that there is a smaller base from which losses might occur due to Thailand’s lower GDP and lower levels of education to begin with.
The negative impact on children from lower-income homes who lacked internet access, suitable equipment, or conducive study areas is one of the significant effects of the protracted school closures. Since many of these students are more likely to drop out, there will be a long-term reduction in economic output, which will affect income levels and purchasing power.
Lower human capital, earnings, and health might prevent affected persons’ children from accumulating human capital in the future, according to the paper, which warns of a possible vicious cycle for many generations.
According to Oxford Economics, these variables might result in a $240 billion drop in total between 2021 and 2035 across the five nations, which would be due to lower income and less private spending.
Additionally, the decline in trust among public and private businesses both domestically and abroad may discourage investment in these nations. According to the analysis, from 2021 to 2035, total fixed investment may be reduced by $181 billion across the five countries.
Following Indonesia, the Philippines, Malaysia, and Thailand in terms of estimated investment losses during the same time period is India, which is predicted to suffer losses of approximately $100 billion.
Policymakers will need to address these issues and develop methods to offset the possible long-term economic ramifications on education, human capital, and investments in the area as the Asian economies continue to struggle with the effects of pandemic-related school closures.