The Latest on Covid-19 in Southeast Asia: June 18, 2020
June 18, 2020
Covid-19 is causing considerable economic pain worldwide, and Southeast Asia is no exception. The pandemic has exposed vulnerabilities in ASEAN economies, including an overreliance on remittances, tourism, and supply chains running through China, all of which have been hit particularly hard. Thailand is expected to be hardest hit in the short-term. The IMF expects its economy to contract by 6.7 percent in 2020. Singapore and Malaysia are projected to see economic losses of 3.5 percent and 1.7 percent respectively. Indonesia, the largest economy in the region, might eke out 0.5 percent growth in 2020, down from 5 percent in 2019. Vietnam is expected to manage best in the region at 2.7 percent growth in 2020, reflecting its early and effective response to the pandemic.Rating agencies have also downgraded most major ASEAN economies: Indonesia was adjusted from stable to negative, and Malaysia, the Philippines, and Thailand from positive to stable. But there is a light at the end of the tunnel. The IMF forecasts an economic rebound for nearly all regional economies in 2021, though to varying degrees. The five largest economies in Southeast Asia are expected to equal or surpass their pre-Covid growth rates in 2021. Brunei is the outlier, with a sluggish recovery projected due to the double whammy of the pandemic and depressed global energy prices.
Possible Dangers
Indonesia’s moves to reopen parts of the economy despite a surge in cases and deaths has many concerned that it will lose control over the new wave of infections. Indonesia’s caseload continues to surge with over 1,000 new cases daily over the past two weeks. It now has the most reported cases in Southeast Asia at over 41,000, which is widely assumed to be an undercount. Indonesia has also reported over 2,200 deaths and has the second highest reported mortality rate in the region, behind the Philippines.In the Philippines, President Rodrigo Duterte re-imposed an Enhanced Community Quarantine in Cebu City on June 16 after the number of cases in the city more than doubled in a week. More than three-quarters of Cebu’s barangays, or districts, are active Covid-19 clusters. Meanwhile, partial restrictions remain in place in Metro Manila. The worsening situation in Cebu is fueling concerns that, despite a controversial and highly-militarized response to the pandemic, the Philippines has not succeeded in flattening the curve of new infections.
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