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China Daily

Asia Pacific> Global Weekly> Content
Monday, July 13, 2020, 14:36
Rising to the challenge
By Prime Sarmiento in Hong Kong
Monday, July 13, 2020, 14:36 By Prime Sarmiento in Hong Kong

Pandemic shows resilience of East and Southeast Asia and leaders’ decisiveness

(SONG CHEN / CHINA DAILY)

Former schoolteacher Melissa Gabriel-Chan had mixed feelings when the Philippines started to ease coronavirus lockdown measures in mid-May.

On the one hand, the 36-year-old Malaysian is hopeful, as the gradual reopening of offices and businesses means she can finally process the papers needed to obtain a temporary residence visa that allows her to stay and work in the island nation.

On the other, she is anxious about how the COVID-19 pandemic has changed life in Manila, capital of the Philippines, and the impact it will have on her family.

She and her Filipino husband Gen lived in Brunei for more than a decade before deciding to move to Manila to enable him to further his studies. However, their relocation coincided with the onset of the pandemic, which has claimed thousands of lives worldwide and devastated economies.

Chan is not sure if she can find a job at a time when the economy in the Philippines is sluggish and most companies are shedding workers.

Her hopes and fears reflect how the pandemic has affected people’s lives in East Asia and Southeast Asia.

The contagion has tested and showcased the resilience of the regions’ public health systems and the decisiveness of their leaders. China, South Korea and Singapore are among the countries that have been praised for prompt policy responses, data-based decision-making and public cooperation to contain the virus.

But the response to the outbreak has come at a huge cost, with the introduction of widespread testing and contact tracing, along with social distancing measures, lockdowns and travel bans.

Closing borders and shutting down most businesses disrupted the production of goods and services, increased unemployment, discouraged investment and reined in economic growth. The Asian Development Bank, or ADB, has forecast that East Asia’s GDP will grow 1.3 percent this year, while economic activity in Southeast Asia is expected to contract 2.7 percent.

The next challenge for the two regions lies in how they open up their economies while keeping COVID-19 at bay. 

In recent weeks, China — including the Hong Kong and Macao special administrative regions — Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, the Philippines and Vietnam have eased lockdown measures, reopened schools and shops, and allowed domestic travel to resume. 

However, restarting economic activities comes on condition that social distancing is still practiced and strict personal hygiene maintained. China, Singapore and South Korea have established “travel bubbles” to facilitate business trips, while Cambodia will soon start to operate a fast-track travel lane with China.

Siriwan Chutikamoltham, academic director of the Nanyang Fellows MBA Program at Nanyang Technological University in Singapore, said it is unrealistic to expect high growth when economic activity is still affected by health safety measures.

She said the best that policymakers can hope for at present is to prevent a deep recession and calm business and consumer anxieties.

The World Bank, in its latest East Asia and Pacific report, said countries need to adjust health and macroeconomic policies in response to the “unprecedented shock” created by the pandemic.

The lender said that while measures such as lockdowns and travel bans are meant to “flatten the pandemic curve”, policymakers also need to mitigate the adverse economic impact through monetary and fiscal measures.

China is working on flattening both the pandemic and the recession curve by gradually resuming economic activities while continuing COVID-19 prevention and control measures. The ADB forecast notes that the country’s GDP growth this year will outpace that of its peers in the region, with the Chinese economy predicted to expand 1.8 percent.

“This forecast factors in strong fiscal and monetary support,” the ADB said in the report, issued on June 18.

Social distancing is encouraged as Tokyo Disney Resort reopens on July 1. (PHOTO / XINHUA, KYODO NEWS)

In the white paper Fighting COVID-19: China in Action released on June 7, the State Council Information Office said the central government has introduced policies and programs, including tax breaks and subsidies, to help businesses, workers and students get back on their feet.

The Chinese government is helping enterprises resume operations by providing personal protective equipment and smoothing the flow of labor and materials. Buses, trains and planes have been chartered to transport migrant workers, and preferential tax treatment has been given to businesses in sectors including transportation, catering, hospitality, tourism, sports and entertainment.

Businesses have also been granted a temporary reduction in rent and utility bills, and more time to repay loans. College graduates and migrant workers have received support to find jobs or start businesses.

Macao has been especially successful in containing the virus. All but one of the 46 patients confirmed with COVID-19 have been released from hospitals, and there have been no deaths.

Amitendu Palit, senior research fellow at the Institute of South Asian Studies, National University of Singapore, said the pandemic is not over and a second wave is still likely. As a result, fiscal stimulus is needed to address uncertainty.

Siriwan from NTU said governments have used fiscal stimulus measures “to shore up demand decimated by the pandemic”. They have also loosened policy to add money supply and reduce interest rates.

Across East Asia and Southeast Asia, governments have launched huge stimulus packages — with most of the measures aimed at protecting workers, supporting small and medium-sized enterprises, and developing a COVID-19 vaccine.

Japan has launched one of the world’s biggest stimulus packages, which at 234 trillion yen (US$2.19 trillion) is equivalent to about 40 percent of the country’s GDP.

Singapore has allocated S$92.9 billion (US$66.6 billion), or about 20 percent of the city-state’s GDP, to help the economy recover. The package includes wage subsidies for local companies, waiving foreign-worker levies, tax rebates, a job support plan and a contingency fund.

The latest round of the package, totaling S$33 billion, was launched on May 26 as the country prepared to reopen its economy after two months.

South Korea has introduced a 270 trillion won (US$222.6 billion) stimulus package, equivalent to about 14 percent of the country’s GDP. The budget will be used for benefits to companies maintaining the workforce, subsidies for freelance and contract workers, loans to small and medium-sized enterprises, and developing a vaccine against the virus.

On June 16, the Thai government approved a 22.4 billion baht (US$721 million) stimulus package aimed at encouraging domestic tourism.

The package will fund holiday travel for the country’s health workers and subsidies for local tourists. It comes on top of a stimulus of more than 2 trillion baht allocated by the government to help businesses and individuals affected by the outbreak.

Worldwide, COVID-19 has infected more than 11 million people and claimed over 500,000 lives. The East Asia and Southeast Asia regions, however, have generally succeeded in containing the virus, as evidenced by their relatively lower number of confirmed cases, high recovery rate and fewer deaths than elsewhere.

More than 90 percent of COVID-19 patients in China, Japan, South Korea, Malaysia and Thailand have been discharged from hospitals. Meanwhile, Vietnam, as of July 7, only had 355 confirmed cases and no deaths from the virus.

Palit, the research fellow, said: “A scientific, people-centric approach, characterized by extreme caution, but not panic, has been the common feature of all these countries in managing the pandemic.”

He said most East Asian and Southeast Asian countries focused on infectious disease surveillance and control by testing, contact tracing and isolating COVID-19 patients. More important, the public has cooperated with government agencies in controlling the pandemic.

Such cooperation is arguably most evident in Vietnam. The country has been widely praised for successfully managing the pandemic, and the ADB expects its economy to grow 4.1 percent this year — the fastest expansion predicted in Southeast Asia.

Guy Thwaites, director of the Oxford University Clinical Research Unit in Ho Chi Minh City, attributes the country’s successful containment of COVID-19 to three factors: swift response, meticulous contact tracing combined with strict quarantine and an effective public communications strategy.

As soon as they learned of the first confirmed COVID-19 case on Jan 23, the Vietnamese authorities put measures in place to control the outbreak, Thwaites said.

It established an inter-agency committee charged with coordinating the response to the pandemic and was one of the first countries to close its borders, schools and businesses and conduct contact tracing and quarantining.

In China, the National Health Commission has provided daily updates on its website and on social media platforms about cases nationwide, while the Joint Prevention and Control Mechanism and the Information Office of the State Council have held more than 100 media briefings.

Information and experiences in containing COVID-19 have been shared by China with other countries. Shortly after learning the genome sequence of the novel coronavirus, China released its findings to the World Health Organization, helping other nations to develop diagnostic test kits.

Kung Phoak, deputy secretary-general of the ASEAN Socio-Cultural Community, said earlier that China’s experience in dealing with COVID-19 can serve as “reference points” for members of the Association of Southeast Asian Nations in containing the virus while resuming economic activity.

Thira Woratanarat, associate professor in the Department of Preventive and Social Medicine at Chulalongkorn University in Bangkok, the Thai capital, said information provided by China on preventing and controlling the virus, along with treatment strategies, has helped countries such as Thailand to manage COVID-19.

prime@chinadailyapac.com


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