Many Southeast Asian countries aim to open their economies amid Covid-19

Many Southeast Asian countries are considering easing restrictions, in the context of their economies suffering heavy losses due to strict blockade orders.

A number of countries in the region are pushing for reopening plans, seeking to balance controlling the spread of the virus with maintaining economic activity, ensuring labor resources and cash flow. They are gradually realizing that the economy is no longer able to withstand the strict blockade orders that were imposed to prevent the outbreak of the pandemic.

The low vaccination rate in Southeast Asia makes it one of the most vulnerable regions to the Delta mutation, in contrast to the US and Europe, which are slowly opening up. However, the increasingly difficult financial situation makes the blockade orders increasingly difficult to enforce.

People on the streets of Orchard Road shopping district in Singapore on September 7.  Photo: AFP.

People on the streets of Orchard Road shopping district in Singapore on September 7. Photo: AFP.

“It’s a difficult balance between lives and livelihoods,” said economist Krystal Tan at Australia & New Zealand Banking Group, adding that Singapore is also grappling with the coronavirus outbreak. Despite having the world’s leading Covid-19 vaccination rate.

Factory closures in Southeast Asia have impacted global supply chains. Toyota Motor Co. had to cut production, while apparel retailer Abercrombie & Fitch Co. warned that the situation was “getting out of control”.

Daily death rates in some Southeast Asian countries have surpassed the world average, but officials in many countries are increasingly worried about the economic consequences if restrictive measures last too long. Malaysia has cut its economic growth forecast in half to 3-4% amid record-setting daily new infections, while hopes of reviving Thailand’s tourism industry have almost disappeared.

Wellian Wiranto, economist at Oversea-Chinese Banking Corp, said that Southeast Asian countries are gradually being consumed by the economic damage from successive blockade orders, as well as people’s fatigue when the situation is has not been improved. “The hope of opening the border to promote trade and tourism is still a distant dream“, he said.

People’s patience is also dwindling, especially as many countries have to deal with Covid-19 longer than the rest of the world. In Singapore and the Philippines, businesses repeatedly voiced difficulty in long-term planning due to lack of clarity in government policies.

People are vaccinated against Covid-19 at a vaccination site set up in a bus in Bangkok, Thailand, on September 8.  Photo: AFP.

People get a Covid-19 vaccine at a vaccination site in a bus in Bangkok, Thailand, on September 8. Photo: AFP.

As a result, a number of countries are moving towards treating Covid-19 as a specific disease rather than a pandemic, in which Malaysia, Indonesia, Thailand and Singapore are all pursuing a strategy of “living with the virus”.

Indonesia, Southeast Asia’s largest economy, focuses on a long-term strategy. Officials are looking to strengthen laws such as making face masks mandatory in the coming years, rather than imposing limited travel restrictions. They also developed separate regulations for specific areas such as schools and offices, in order to prepare permanent regulations in the new normal.

Reporting the number of new cases daily is now less important than their severity. This can be applied in Singapore and Malaysia, two countries with the highest vaccination rates in the region at 80% and 50% respectively.

Instead of nationwide or regional blockade orders, the Philippines is looking for a way impose travel restrictions in certain areas, to street or house level.

Philippine health workers prepare remdesivir for Covid-19 patients at a hospital in Quezon City on August 20.  Photo: Reuters.

Medical staff prepare medicine for Covid-19 patients at a hospital in Quezon City, Philippines, August 20. Photo: Reuters.

Only vaccine green card holders are allowed to visit malls and religious sites in Jakarta, or to cinemas in Malaysia. Restaurants in Singapore are also required to check their diners’ vaccination status. In the Philippine capital Manila, officials are considering creating “vaccine bubble” zones for offices and public transport.

This strategy can reduce the overall damage to the economy, but some experts still warn that the uneven distribution of vaccines, focusing on economically essential areas, could lead to disadvantages for the economy. low-income residents.

Vu Anh (Follow Bloomberg)

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