ERIA Hosted Webinar on Economic Impact of COVID-19 in ASEAN: Perspectives from Four Countries
Jakarta, 12 August 2020: ERIA hosted a webinar to discuss the ‘Economic Impact of COVID-19 in ASEAN: Perspectives from Four Countries’. With more than 300 participants from the Asia-Pacific region and beyond, the discussion gathered views from four ASEAN countries (the Philippines, Viet Nam, Singapore, and Indonesia) and the ASEAN region as a whole. The webinar was organized under ERIA’s Strategy and Partnership programme, funded by Australia.
The webinar was opened with welcoming remarks from the Chief Operating Officer of ERIA, Mr Koji Hachiyama. In his remarks, Mr Hachiyama noted that the COVID-19 pandemic has caused disruptions in regional global value chains (GVCs) and triggered important changes in the way people work and interact. He highlighted the importance of deepening regional economic cooperation also strengthening seamless connectivity within East and Southeast Asia, under the EAS framework. (Policy Brief)
Dr Giulia Ajmone Marsan, ERIA’s Director of Strategy and Partnership, moderated the discussion with the 4 speakers:
- Mr Adrian S. Cristobal Jr., Chairperson of ERIA Governing Board, Former Secretary of Department of Trade and Industry, Philippines (Philippines);
- Ambassador Barry Desker, Distinguished Fellow of S. Rajaratnam School of International Studies, Nanyang Technological University; ERIA Governing Board Member from Singapore;
- Dr Tran Thi Hong Minh, President of Central Institute for Economic Management (CIEM); ERIA Governing Board Member from Viet Nam;
- Dr Lili Yan Ing, Lead Advisor/ Senior Economist, ERIA, and former Lead Advisor of the Minister of Trade, Indonesia.
Mr Cristobal Jr. noted that the pandemic has hugely affected the global, regional, and the Philippines’ economies. With a sharp decline in demand and, especially at the beginning of the pandemic, of supply in both the manufacturing and service sectors, the Philippines saw a drop of 16.5 of its GDP in the second quarter of 2020. He highlighted the urgency of a strategy combining the protection of public health with economic recovery. He also emphasized the importance of protecting vulnerable workers and individuals as they are acutely affected by the pandemic and its economic consequences.
Dr Minh, stated that COVID-19 has caused severe disruptions in Viet Nam’s economy. As a response, Viet Nam implemented a number of policies such as measures to support businesses and workers, lowering interest rates, debt restructuring, deferral and rescheduling of tax payments, reducing prices of electricity and oil. She also noted how during the post-pandemic recovery Viet Nam can benefit from shifts of GVCs and increased inflows of FDI thanks to opportunities arising from the adoption of innovation and the transition towards a digital economy. She also emphasized the importance of promoting regional and multilateral cooperation as well as international economic integration for a faster recovery.
Ambassador Desker stated that Singapore has ruled out stimulus packages which primarily focus on fiscal policy for job security. Due to the unpredictable global economic environment, he highlighted the importance for international companies to remain agile. Amb Desker also mentioned the need for integrated approaches at the ASEAN level to fight COVID-19 and to promote ASEAN-wide frameworks that oppose protectionism and support integration and diversification of ASEAN economies. The RCEP agreement would be an important step in this direction.
Dr Ing noted how the COVID-19 economic crisis impacts both the global demand and supply-sides, bringing more than 1 million people into poverty in Indonesia alone. According to recent forecast, the Indonesia economy will grow in the best-case scenario at 0.5% in 2020, with significant reductions of exports and FDI inflows expected. In response, the Indonesian government launched fiscal stimulus plans corresponding to more than 6 % of GDP and monetary stimulus plans to ease liquidity and lower interest rates. However, she noted how these measures should be accompanied by well-designed definitions of beneficiaries, efficient and rapid disbursement mechanisms, and transparent monitoring and evaluation tools.
During the Q&A session, themes that emerged included(i) the importance of regional cooperation and sharing of information and best practices through the ASEAN pandemic task force (ii) the need for a strategy for ASEAN to avoid future crisis and support regional economic integration to achieve a faster recovery; (iii) the importance of digitalization and innovation to accelerate the recovery; (iv) the need for ASEAN to be resilient in the immediate future and in the longer term.