Jakarta, March 8, 2021 – Five of Asia’s biggest economies – India, Indonesia, the Philippines, Singapore, and South Korea – have together announced a total of USD 884 billion in COVID-19 recovery stimulus packages.
Climate Policy Initiative and Vivid Economics launched a new report, “Improving the impact of fiscal stimulus in Asia: An analysis of green recovery investments and opportunities” that maps the ‘greenness’ of the fiscal stimulus measures and their contribution towards country-level climate objectives during the year 2020.
The study was launched in a high-level virtual dialogue that featured key policymakers from Asian countries, including Muhammad Chatib Basri, Senior Lecturer at University of Indonesia and Former Minister of Finance, Republic of Indonesia, Dr. Barbara Buchner, Global Managing Director, Climate Policy Initiative, Paola Alvarez, Assistant Secretary, Department of Finance, the Republic of the Philippines, Mahua Acharya, CEO of Convergence Energy Services Limited, subsidiary under Ministry of Power, Government of India, Mihir Swarup Sharma, Senior Fellow and Head, Economy and Growth Programme, India, and Tiza Mafira, Associate Director, Climate Policy Initiative, to deliberate on how their respective countries have considered a green economic recovery.
The report builds on the Greenness of Stimulus Index (GSI) developed by Vivid Economics to assess the sustainability implications of fiscal stimulus packages across the five Asian countries included in the study. The index suggests that countries are not doing enough to incorporate climate considerations into their fiscal stimulus responses.
Figure: ‘Greenness’ index of stimulus packages in five Asian countries during the year 2020
Key findings of the report include:
- South Korea announced the largest stimulus package (USD 333.7 billion), followed by India (USD 332.9 billion), Singapore (USD 85.7 billion), Indonesia (USD 74.7 billion), and the Philippines (USD 17.0 billion).
- GDP % (Gross Domestic Product): Singapore has provided the largest share of recovery packages (24%), followed by South Korea (20%), India (12%), Indonesia (6%), and the Philippines (4%).
- South Korea has the highest share of green stimulus measures, accounting for US$ 37 billion or 53% of environmentally related measures. Meanwhile, 31% (or US$ 27.7 billion) of environmentally-related stimulus measures in India and 4% (or US$ 0.3 billion) in Indonesia are directed towards green outcomes, while the Philippines and Singapore have included no commitment towards green outcomes based on the analysis.
The study includes key recommendations to ensure a sustainable recovery across the five Asian countries. It highlights the definitive need for governments to integrate green considerations into the design of their COVID-19 stimulus packages for long-term, sustainable economic growth and further emphasises that the sheer size of fiscal stimulus packages represents a strong policy signal regarding country priorities for the direction of economic recovery, making it important that it embeds support for green businesses.
“Don’t waste this crisis” said Indonesia’s Former Minister of Finance, Muhammad Chatib Basri, “We can take this opportunity to use the fiscal policy for a green recovery”.
“Stemming the next crisis means that mainstreaming climate action into regular decision-making is the need of the day. We must continue ambitious action on climate change as the world recovers from the pandemic, particularly as trillions are spent on economic stimulus,”said Dr. Barbara Buchner, CPI’s Global Managing Director.
Senior Communications Associate