September 13, 2021 by archyde
In order to save economic growth, Southeast Asian countries chose to reopen.Reuters
Southeast Asian countries have gradually realized that even if the outbreak is ranked as one of the most severe areas in the world, they can no longer bear the necessary restrictions that would undermine the economy and strictly control the epidemic.
In factories in Vietnam and Malaysia, barber shops in Manila, and office buildings in Singapore, authorities are pushing for reopening plans, seeking a balance between controlling the virus and maintaining the flow of people and capital.
The low vaccination rate in Southeast Asia makes it extremely vulnerable to the Delta variant virus. However, the previous rounds of stimulus measures have caused the country’s fiscal tensions, monetary policy firepower has weakened, and strict blockade measures have slowly become unworkable.
The plant shutdown in Southeast Asia has spread to the world, causing supply chain problems. Automakers including Toyota Motor have slashed production, and apparel retailer Abercrombie & Fitch warned that the situation is “out of control.”
Officials are gradually worrying about the economic impact of the restrictions if the restrictions continue for too long, despite the slow rate of vaccination. Malaysia cut its 2021 growth forecast to 3%-4%. Thailand’s expected tourism rebound is quickly dying.
Even in regions with good prospects, such as Vietnam and Singapore, which may grow by 6% and 7% respectively this year, there is increasing pressure to resolve bottlenecks in the global supply chain and avoid damaging foreign investment interest.
Vietnam is at the highest risk. Increasingly stringent blockade measures make manufacturers and exporters pay a high price, but they cannot prevent the spread of the Delta variant virus. The Ministry of Trade of Vietnam warned this month that strict anti-epidemic measures to close factories may result in the loss of overseas customers. The European Union Chamber of Commerce in Vietnam estimates that 18% of its members have transferred part of their production to other countries to ensure that the supply chain is not affected. It is expected that more people will follow up.
The patience of the people in this area is getting worse. Malaysia’s prolonged blockade has resulted in unemployment, but it has not been able to reduce the number of confirmed cases. Social anxiety has caused regime change; Thailand’s street protests were originally aimed at the military government and have now become epidemic-related gatherings; Vietnam’s poor people are increasingly finding it difficult to find higher-paying foreign companies The economic difficulties of work have deepened the pressure of the government to reopen; in Singapore and the Philippines, because government policies are full of uncertainties, companies have complained loudly that it is difficult for them to make long-term plans.
Many countries have therefore imitated Singapore and learned to “coexist with the virus.” Indonesia focuses on long-term strategies, such as consolidating the requirement to wear masks for many years, rather than intermittently imposing liquidity restrictions, and only those with vaccination cards can enter Jakarta’s shopping malls and places of worship.
The Philippines is seeking more targeted regional blockades than the whole country or the entire city, narrowing it down to streets and even households. Vietnam is also testing this strategy. Hanoi has set up travel checkpoints because officials impose different restrictions based on the risk of infection in different areas of the city.
These strategies will reduce the damage to the overall economy, but the risk lies in the uneven distribution of vaccines. For example, Malaysia’s allocation of vaccines to important states rather than poor areas may put low-income residents at a disadvantage.