How the APAC region has engulfed by COVID-19 and how it is responding to the new normal?
The impact of COVID-19 continuously taking socio-economic aspects across the world by storm. It has overwhelmed all walks of life, causing both health and economic crisis. In order to respond to this health and economy emergency, governments across different countries in the world are stepping in with innovative and preventative approaches. As some countries are still living under lockdowns to thwart the effect of the virus, some are reopening their economic activities to get lives back on track again. Here we will discuss how the COVID-19 pandemic has disrupted the social and economic aspects in the Asia Pacific. And how countries in the region are responding to the crisis.
The COVID-19 instigated crisis has deeply brought serious health and economic downturn in the APAC region. One of the major impacts of the pandemic in the region has supply chain turmoil that truly caused global strike in normal business activity. According to reports earlier this year, when the virus was largely confined to Asia, it showed a hit to world GDP growth of around 0.2 percent. Conversely, Statista’s May report showed that China’s economic growth abridged by -0.91 percent, while both Indonesia and Singapore experienced an economic growth reduction of -0.26 percent in 2020.
COVID-19 has also a significant impact on people’s livelihood as it has caused millions of jobs and incomes across diverse industries. As per IATA, the pandemic is likely to impact over 29 lakh jobs in the Indian aviation and associated industries. On the other side, the entire APAC region is expected to witness the biggest job loss of approximately 63.4 million in the travel and tourism sector, followed by 13 million job losses in Europe.
Economic Impact of COVID-19
There is no wonder that the impact of any crisis profoundly causes developing nations. And Asia is not an exception. According to a report from Asian Development Bank, developing Asia will weaken tremendously as the region relies on the global economy through tourism, trade, and remittances.
With rapidly spreading disease, strict measures to contain it, quickly undermining domestic demand and the external environment, the bank forecasts the regional growth declining from 5.2 percent in 2019 to 2.2 percent in 2020. However, it also shows some optimism as the growth will rebound to 6.2 percent in 2021, based on assumptions that the pandemic will end this year and activity promptly will normalize. Excluding Asia’s high-income newly industrialized economies, such as Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China, growth will drop from 5.7 percent to 2.4 percent this year before recovering to 6.7 percent later this year.
Governments Policy Responses
In response to ease the coronavirus impact, economies require decisiveness, agility, coordination, and continuous vigilance from policymakers and institutions. For example, South Korea, which is one of the earliest-hit countries by the virus, announced plans to lift social-distance regulations. The country now asks citizens to adhere to four new basic regulations, including self-isolation for three or four days if they fall ill.
On the other hand, Singapore, which is one of the hardest-hit nations in the Asia-Pacific, has also started a phasedown of its lockdown, beginning with a reopening of traditional Chinese medicine outlets, with further phases. India also initiated unlocking its lockdowns in a phased manner. Prior to this, the country introduced a US$22.5 billion stimulus package for poor households that announced to be disbursed through food security measures and direct cash transfers.