ASIA-PACIFIC REGION
Myanmar says air passenger numbers diving because of coronavirus
Passenger arrivals at Myanmar’s three international airports have tumbled 36 percent so far in February from the prior month because of the travel curbs sparked by the novel coronavirus outbreak. There’s been a particularly pronounced drop in the number of Chinese visitors, to 2,000 a week from a usual average of about 30,000, said Ne Win, director of air transport at the Department of Civil Aviation. “The virus has negatively affected all airlines, routes and destinations,” Ne Win said in an interview Tuesday in Yangon.
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US firms: coronavirus outbreak could cut China revenues by 50pc
US companies are bracing for the revenue they make in China to be cut in half if the novel coronavirus outbreak extends into the summer.
Nearly half of US companies in China expect revenue from the country to fall this year if businesses can’t return to normal before the end of April, according to a survey by the American Chamber of Commerce in China conducted earlier this month. And about a fifth of US companies said 2020 revenue from China will plummet by more than 50 percent if the epidemic extends through the end of August.
The coronavirus has killed 2,800 people so far, including 56 deaths outside of mainland China. It has sickened more than 82,000 people, the vast majority in China.
Business in China ground to a halt when the outbreak accelerated late last month. Companies have been struggling to return to normal, as hundreds of millions of people in China remain under travel restrictions. Special trains and planes have been chartered to bring people back to the cities where they work, but even if companies can get their staff in the door, some have been struggling to meet requirements such as providing workers with masks.
For the AmCham survey, US companies said global travel restrictions, reduced travel to and from China, supply chain disruptions and a shortage of necessary medical supplies are all affecting their business in China.
“There is, in the short term, a clear and significant negative impact to member company operations, through travel disruptions, reduced staff productivity, increased costs, significant drops in revenue, and more,” AmCham China Chairman Greg Gilligan said in a statement.
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Q3 GDP may be a relief but a virus hit is brewing for India’s economy
The precipitous fall in India’s economic growth may have reached its bottom at an estimated 5 percent for FY20, and the December quarter (Q3) gross domestic product (GDP) data scheduled for Friday will perhaps confirm this.
According to a survey of economists by Bloomberg, GDP growth was 4.7 percent in Q3, a marginal improvement from the 4.5 percent in the September quarter.
While economists believe the slowdown may have bottomed out, there is caution since high-frequency data from auto sales to Purchasing Managers
’ Indices have been a mixed bag. December quarter growth is likely to have improved over Q2 due to an improved farm output and higher government spending.
But importantly, the recovery in growth to 6 percent in FY21 looks difficult, unless the economy can weather the disruption by the coronavirus outbreak. India is closely linked to China through trade and, according to State Bank of India
’s (SBI’s) research, more than half of the country’s imports in 19 categories come from China. The virus outbreak has already quarantined parts of the global supply chain.
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Japan’s retail, entertainment sectors feel pain from COVID-19
Retail, leisure and dining businesses are taking a hit as more people in Japan avoid crowded areas and opt to stay home due to the spread of COVID-19, with economists predicting a fall of over ¥2 trillion ($18 billion) in household consumption.
Japanese-style izakaya pubs reported group cancellations after Prime Minister Shinzo Abe asked organizers of big sport and cultural events on Wednesday to consider canceling or postponing them over the next two weeks in the wake of the pneumonia-causing virus.
Noting spring is a season for send-off and welcome parties in Japan, with the fiscal year starting for businesses in April, the head of one izakaya in Tokyo said, “If this (self-imposed restraint) continues through March and April, there will be damage to our business.”
Matsuya Co.’s department store in Tokyo’s upscale Ginza shopping district said sales between Feb. 1 and Feb. 26 fell some 30 percent from a year earlier, as the number of shoppers declined day by day from the middle of the month.
Department stores are also suffering from a sharp fall in the number of Chinese tourists to Japan due to a travel ban imposed by Beijing to contain the virus, which is believed to have originated in the central China city of Wuhan.
Among major leisure companies, Sanrio Co. has decided to close its indoor Hello Kitty theme park, Sanrio Puroland, in Tokyo from Feb. 22 through March 12.
Tokyo Disneyland and Tokyo DisneySea will be closed from Saturday to March 15, operator Oriental Land Co. said Friday.
Central Nippon Expressway Co., which manages major highways, has also seen less traffic. Preliminary data for toll revenues from Feb. 1 to 23 showed a fall of some 4 percent on the year, while sales at rest stops along highways, including of goods and food, decreased around 7 percent.
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Coronavirus: Indonesia rolls out measures to minimise the outbreak’s impact on economy
Indonesia announced on Tuesday (Feb 25) a raft of measures, including the disbursement of 10.3 trillion rupiah (S$1 billion), to help domestic businesses and consumers counter the economic impact of the coronavirus.
Finance Minister Sri Mulyani Indrawati said 4.56 trillion rupiah of the sum will be given to about 15.2 million of the poorest households, with each getting 50,000 rupiah more each month in non-cash food aid, bringing the total to 200,000 rupiah.
It will be given for six months, starting in March 2020.
This aid for the bottom 20 to 30 per cent of the population “will boost consumer spending and create multiplier effects on the economy,” she told reporters after a Cabinet meeting led by President Joko Widodo.
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At the same time, the government will spend another 298.5 billion rupiah on joint promotions with airlines and travel agents to attract foreign tourists to the vast archipelago of more than 17,000 islands.
It will also provide 443.9 billion rupiah to encourage domestic tourism, with locals getting a 30 per cent discount on plane tickets to 10 destinations, dubbed the new Balis.
These include Toba Lake in North Sumatra, Tanjung Kelayang Beach in Bangka Belitung Islands and Labuan Bajo in East Nusa Tenggara.
Also, the 10 per cent hotel and restaurant tax at these destinations will be lifted for the next six months, with the central government compensating the local administration for the charge.
Prices of aviation turbine fuel of state-owned oil and gas company Pertamina will be reduced as well in the next three months to support flights to these 10 tourist destinations.
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Vietnam is set to lose billions of dollars due to coronavirus
As the official count of confirmed cases of COVID-19— the respiratory illness causes by coronavirus — continues to climb, Vietnam is feeling the economic impact.
Many factories such as Tan Hoang Gia Trading Co., which typically imports plywood from China, have been unable to get materials from the country. With borders partially closed, companies that export to China have struggled to sell their goods.
Chinese visitors, who typically make up about a third of tourists to the country, are scarce. And, at least a few businesses are trying to bar any Chinese customers from entering, out of fear of the coronavirus spreading.
On February 14, the Vietnamese government announced it would not lower its economic growth target for 2020. As of Monday, there are 16 confirmed cases of COVID-19 in Vietnam; globally, there have been more than 76,000 total cases and more than 2,200 deaths.
Former Vietnamese government adviser Le Dang Doanh told that Vietnam’s economy has been negatively affected across numerous sectors, including exports to and imports from China, tourism, and transportation services such as airlines and trains.
“The government still keeps the growth target unchanged,” Doanh, who served as a member of the UN Committee for Development Policy from 2016 to 2018, said in an email. “But I think the GDP growth rate of Vietnam’s economy in 2020 should be reduced by ca. 1 [percentage point] from the 6.9 percent target, maybe to around 6.0-5.9 percent.”
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Thailand leads worldwide healthcare promotion
Thailand was the first Asian country to amend its laws to allow for medical cannabis. The amendment is narrow, essentially allowing only research and development activities under license with public institutions and consumption with a medical certificate. Companies are positioning for the eventual commercialisation and expecting similar liberalisation throughout Asia. In the “green rush” to develop markets, companies must not ignore the answer to that core business question.
Attitudes regarding cannabis are changing globally. This is not just a Thailand phenomenon. Countries around the world are amending their laws to allow for cannabis production and consumption. International banks and Big Logo Advisory Firms forecast the emerging medical cannabis industry will be worth billions of dollars.
Let’s not get excited with specific financial projections. Big dollar numbers suggest business will be quick and easy. It will not. Suffice to say, wherever Asian markets open up, population demographics will point to a need for therapeutic and consumer products across market segments. The demand is a no brainer as can be seen in markets where commercial legalisation of medical cannabis has already occurred. But bringing new products to new markets in an evolving regulatory environment is never easy.
Aside from market demand and potential health benefits, governments cannot ignore new employment opportunities for farmers and new tax revenue streams. Thailand’s geography is a golden opportunity with natural sunlight, tropical climate and elevation, all ideal for low cost production and furthering Thailand’s agricultural prime positioning with another cash crop.
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How much more can the Philippine economy endure from Rodrigo Duterte before growth falters?
Firearms feature a lot when it comes to Rodrigo Duterte. Their role in the cult of personality dynamic that propelled him to the presidency is perhaps best demonstrated by a 2015 Esquire Philippines magazine cover.
It featured the tough-guy mayor of the southern Davao City wearing a flak jacket, cradling an assault rifle and backed by a mob of men seemingly loaded for bear.
The inference was clear. This strongman, one part Che Guevara, one part Rambo, was ready to storm the economic establishment. And 15 months later, Duterte did just that as voters put the unlikeliest of mavericks into the presidential palace.
Since then, the Duterte era has waged a war against drugs that went beyond just targeting the dealers and users. He’s made threats against anyone who gets in his way from human-rights activists to corrupt cops to “rich people.” But little did supporters suspect that the real thing Duterte would end up shooting is the economy.
Granted, Duterte dreams of inflicting harm by other means, too. He talks of dropping corrupt officials from helicopters and a desire to get rid of “useless bishops.” Yet this rhetoric distracts from the real costs that three and half years of Duterte is doing to what was one of Asia’s most impressive economies when he took power.
Duterte often gets a pass on economic missteps because of good top-line numbers. In this way, he’s not unlike Donald Trump. In 2017, the U.S. president inherited a multi-year expansion from Obama and spun it as his own. That momentum papers over Trump’s moves to enrich the upper class, upend the rule of law and savage the environment.
The 5.9 percent growth the Philippines clocked in 2019 helps Duterte deflect from his own economic blunders. Here are three worth exploring.