Coping with COVID-19 and enhancing long-term resilience to future shocks: An assessment of fuel-exporting countries in Asia and the Pacific

COVID-19 and the oil prices crash induced by it have imposed a double whammy on fuel-exporting countries in Asia and the Pacific. Compared to other countries, they are likely to experience greater economic weaknesses, as they face not only slowdown in economic activities, but also revenue shortfalls, deteriorating export earnings and capital flight, and depreciation pressure on currencies due to lower-than-expected oil prices. To cope with the immediate negative impacts of COVID-19, countries have introduced timely and necessary large and targeted fiscal and monetary policy measures. However, these immediate policy measures should not take the policy attention away from the long over-due and much-needed structural economic transformation in fuel-exporting countries. Excessive dependence on fuels, especially oil, has kept these countries very vulnerable to the commodity boom and bust cycles. Therefore, when designing economic recovery packages, countries should also embed long-term sustainability considerations by introducing measures that can help them diversify their economies and reduce reliance on fossil fuels.