Why the Global Coronavirus Pandemic Could Get Worse for Southeast Asia

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Why the Global Coronavirus Pandemic Could Get Worse for Southeast Asia

Recent indications suggest that the region’s problem could exacerbate in the coming weeks.

Why the Global Coronavirus Pandemic Could Get Worse for Southeast Asia
Credit: Wikimedia Commmons

Clearly, the COVID-19 outbreak in Southeast Asia is worsening, with rising cases across key countries in the region. As an indicator of this, the World Health Organization (WHO) has now called on Southeast Asian states to do more to do more to stop the spread. “Urgent and aggressive measures are the need of the hour. We need to act now,” Poonam Khetrapal Singh, WHO’s regional director, said on March 17.

That is no exaggeration. The numbers of cases is rising in the region, and spiking in some countries, thereby proving earlier predictions of underestimation to be true. In Cambodia, cases more than doubled overnight on March 17. Indonesia, the region’s most populous country, has now recorded Southeast Asia’s highest number of confirmed cases, at 227 as of March 18, when it recorded no cases just weeks ago.

But a public health crisis has now become an economic crisis – and, if it worsens, could become a political crisis.  Across the region, economic growth forecasts for this year are tumbling. Singapore is likely to head into recession, with the most optimistic of forecasts predicting growth of just 0.6 percent this year. Thailand could also see a recession; Citigroup has downgraded its Thai growth forecasts to 0.2 percent. Vietnam’s growth is likely to fall below the 6 percent mark for the first time in years, while Cambodia’s is likely to be at a decades-low. Malaysia’s forecasts dipped to 3.7 percent growth, compared to predictions of 4.2 percent before the outbreak. The Philippines’ is down to 5.4 percent, according to Moodys. Indeed, this week the Philippines became the first country in the world to shut down its financial markets because of the outbreak.

But all these forecasts are guesswork, and more than they normally are. S&P Global, a credit-rating agency, now predicts that the global economy has already fallen into recession, and economic data from Asia is much worse than originally thought. Nobody knows much worse the outbreak will become in Southeast Asia, with the possibility of region-wide lockdowns for several more months.

More broadly, there’s no way to know how long Europe and the United States will remain on lockdown either, which has significantly affected global trade, especially for Southeast Asian economies, most of which count the United States and Europe as their largest export markets. There were signs that China’s economy was picking up again, but events in Europe and North America will delay this.

But one thing is clear: Southeast Asia will experience economic hardship this year – and possibly into 2021, as the COVID-19 outbreak happened to take place as several regional economies were already struggling and the U.S.-China trade war having lasting impacts. How this alters politics, which it will as well, waits to be seen.

To be sure, every government struggles through economic downturns and especially recessions. But Southeast Asia’s governments, particularly the autocratic ones, will struggle more than others. In communist Vietnam and Laos, one-party Cambodia, and autocratic Singapore and Thailand, ruling parties depend almost exclusively on fast economic growth for legitimacy. Sordid promises that citizens stay out of politics in return for rising prosperity and economic stability are tolerated when these promises can be delivered, but maybe not when they are broken. Suharto’s dictatorship in Indonesia fell after the 1997 Asian Financial Crisis, while Thailand also had to democratize, introducing its most progressive constitution that year as a result of the aftermath of economic recession.

So far, the Vietnamese Communist Party has been uncharacteristically transparent during the crisis, perhaps learning from its past mistakes, like during the Formosa toxic spill in 2016. But it has also stuck to its usual repression, harassing those who allegedly spread “fake news” and voice their criticism. One imagines, however, that repression will trump openness if the number of COVID-19 cases spikes in Vietnam and elsewhere in the region, especially if more locals become infected, and if healthcare systems feel the strain.

Cambodia Prime Minister Hun Sen, who has fudged and fumbled his way through the crisis since January, has lashed out publicly at anyone who criticizes his government’s handling of the situation or complains about the dire state of Cambodia’s healthcare system. Malaysia now has a new government, after the more liberal Pakatan Harapan coalition fell apart last month, and the new ruling coalition is less likely to respect issues like free speech. Indeed, it has even suspended parliament until May. Philippine President Rodrigo Duterte doesn’t need an excuse for repression, while Thailand and Myanmar’s commanding militaries will instinctively strike if they sense rising dissent.

Authorities in Singapore, effectively a one-party state, are now using its controversial “fake news legislation,” passed last year, to force social media operators to remove content the city-state’s government deems overly critical of how it has handled the crisis. After Facebook removed one post, it noted that it is “deeply concerned about the precedent this sets for the stifling of freedom of expression in Singapore.”

Many Southeast Asian governments may well attempt versions of what the Chinese Communist Party is currently doing: escalating its suppression of public criticism and what little free speech there is, deporting dozens of foreign journalists from major international newspapers, and engaging in a deceitful propaganda battle to recast itself as the responsible, almost selfless defender of the world amid the coronavirus outbreak. (Of course, Beijing is partly responsible for this crisis more generally, as the Communist Party knew about the virus in late November but said nothing publicly until early January, either because of incompetency or because Beijing wanted to protect its reputation.)

Worse may follow, however, if Southeast Asian economies tank, infection cases spike, and the all-in-it-together mentality that appears to be sustaining across much of the region, especially those that have been on lockdown for some weeks, starts to unravel.