Asia-Pacific Region
Indonesian businesses look to Singapore, Malaysia for Covid-19 measures
Indonesian businesses are looking at neighboring countries for coronavirus responses as Southeast Asia’s most populous country faces increasing pressure to escalate its own measures, including potentially locking down the economy.
The Jakarta Post spoke to three business leaders who said a Singapore-like response, where the government allows businesses and factories to operate, was more ideal for local enterprises instead of a full lockdown. The city-state has focused on tighter border control, contact tracing, social distancing and expanding healthcare services to mitigate the spread of COVID-19.
“The difference is that Indonesia is a big country, but we have to start with good virus testing protocols,” Indonesian Employers Association (Apindo) deputy chairwoman Shinta Kamdani said on Thursday. “And Singapore is a good example.”
The Indonesian government is under pressure from both the World Health Organization and local communities to intensify its response toward the COVID-19 outbreak, particularly because the country’s largest annual holiday exodus, Idul Fitri, is just around the corner.
Indonesia has so far responded by urging the public to practice social distancing, imposing temporary travel bans and shutting down schools in certain regions. On Thursday, President Joko “Jokowi” Widodo ordered mass testing in an effort to contain the spread of the disease after saying on Monday that the government was “not leaning toward issuing a lockdown”.
Singaporean National Development Minister Lawrence Wong, meanwhile, said on Tuesday that the government “was not planning” for a lockdown but also “can’t rule it out”.
Shinta went on to say that Apindo members had begun rolling out work from home (WFH) protocols, introducing limiting office density, reducing face-to-face meetings and assigning fewer work trips in helping mitigate the pandemic.
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China’s economic growth now depends on the west
China’s leadership expected that economic growth in 2020 would be a celebratory event, marking a doubling of the economy’s size over the past decade. The new coronavirus, however, has obliterated those forecasts.
Beijing’s draconian measures brought the epidemic under control sooner than anticipated. Although the extent and speed of the virus’s spread paralyzed Chinese society, the nationwide shutdown led to the epidemic’s slowdown in mid-February. On March 10, Chinese President Xi Jinping took a victory lap by visiting the epicenter of Wuhan, capital of Hubei Province. By March 19, the number of new domestically driven cases fell to zero. All other new cases were recent returnees who found it safer to be in China than in Europe, the epidemic’s new epicenter, or the United States, where the spread of the virus is accelerating.
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Indian businesses to consider their human rights impact under proposed plan
To ensure that businesses in India are responsible, sustainable and respect basic human rights, the government of India is in the process of finalising its National Action Plan on Business and Human Rights (NAP). The zero draft of NAP, which has been public for over one year, is now under the final stages of extensive consultations with stakeholders led by the Union Ministry of Corporate Affairs (MCA).
While the industry and experts working on land rights and environmental issues welcome the move, the latter believe that for the final version to be successful and meaningful, it needs to address rights of forest dwellers being impacted by businesses, development of areas affected by extractive industries, the responsibility of investors in addition to corporations towards environmental protection and combatting climate change.
According to the MCA, the obligation of the Indian government to draft NAP stems from the country’s endorsement of the United Nations Guiding Principles (UNGPs) on Business and Human Rights adopted in the UN Human Rights Council (UNHRC) in 2011. The ministry stated that principles are articulated as three pillars – state duty to protect (human rights), the corporate responsibility to respect (human rights) and access to remedy (for business-related human right abuses). “A country’s NAP is expected to demonstrate how these principles are already being implemented, what the gaps are, and how they shall be addressed,” the MCA notes.
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Tiding the Bangladesh economy over in the time of coronavirus
It was clear on Friday that the Western Europe was grinding to a halt because of coronavirus.
By Monday it became clear that most of the US was also grinding to a halt and would likely remain that way, because of the RAID speed of the virus outbreak through major states of the US and the sweeping steps being taken in an attempt to halt its progress.
In all major financial centres across the globe, market participants were acting as if an economic collapse was inevitable.
Even before that four former chief economists of the International Monetary Fund had told that even without waiting for the real economic data, which would come after the end of the month, they were sure that the global economy was already in recession.
Recent official data from China indicate that the government’s strong containment efforts brought the country to a standstill with industrial production, retail sales, investment all posting double-digit drops for the first two months of 2019 from a year earlier.
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These data indicate that the entire Chinese economy might have shrunk in the first quarter of 2020 for the first time since 1976, an ominous sign for the rest of the world.
All major central banks, including the US Federal Reserve, have announced extremely large stimulus packages in an effort to dampen the contractionary effect of the economic disruption caused through fighting of the virus.
Bank of Japan, European Central Bank (ECB) and the Fed all have announced massive liquidity injection to overcome the liquidity crunch that generally accompanies a massive shock of this proportion.
The Fed has announced its readiness to inject fresh liquidity of $700 billion. In addition, despite its hostilities to the Trump administration, the US Congress in recent days has announced a fiscal package of more than $40 billion.
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Singapore faces bigger contraction as Malaysia shuts borders
Malaysia’s lockdown is the latest threat to a Singapore economy already reeling from the coronavirus outbreak.
The city state relies heavily on its neighbor’s workers and food, and Malaysia’s move Monday night to ban all visitors and prevent residents from traveling overseas for about two weeks will choke off a key labor channel.
Maybank Kim Eng Research Pte. estimates that about 400,000 Malaysians working and studying in Singapore cross the border on a daily basis. The potential hit to the city state’s economy could therefore be large.
“Banning daily commuters will essentially cut off almost a 10th of Singapore’s labor force, hurting both the manufacturing and services industries,” said Chua Hak Bin, a senior economist at Maybank in Singapore.
Singapore was already facing a recession because of virus-related disruptions to the city’s trade and tourism. Maybank was estimating a 0.3 percent contraction in gross domestic product in 2020, with the potential for a more severe decline if the Malaysia shutdown takes a heavier toll on the economy.
“Malaysia and Singapore remain joined at the hip by geography and history,” Chua said. “Malaysia’s lockdown, especially on travel and non-essential business, could have severe knock-on effects on Singapore’s economy.”
The cut-off also threatens to pummel food supplies in Singapore, which relies on Malaysia for a substantial volume of fruits and vegetables. Singapore officials moved Monday to reassure citizens the city won’t run out of food and supplies as consumers rushed out to stack up on groceries.
“Although it’s unexpected and unprecedented, I guess we’ll just have to wait and assess given it’s only for two weeks,” and there should be sufficient inventories of food to cover that period, Selena Ling, head of research and strategy at Oversea-Chinese Banking Corporation Ltd. in Singapore, said in an email.
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Nepal hotels to shut until Covid-19 situation improves
Due to lack of business amid the coronavirus pandemic, hotels across Nepal have decided to shut completely until the situation improves, a media report said.
While the Hyatt Regency, a five-star hotel based in Kathmandu, has decided to shut its entire business from Saturday, other establishments, including the Radisson and Marriot, were expected to follow suit, The Himlayan Times said in the report on Thursday.
“We have decided to shut down the hotel for at least six weeks beginning March 21. While the hotel lacks business, the decision also intends to prevent the possible spread of coronavirus among our staff and guests,” said Govinda Pariyar, a PR manager at Hyatt Regency.
According to Pariyar, the entire hotel service, including the casino will remain shut until further notice.
“We are an international hotel chain and must follow international practices prevalent in the sector,” The Himlayan Times quoted Pariyar as saying.
The hotel has also given leave to its 350-odd employees as long as it remains closed.
“All the staffers will stay on leave during the period. Though we might not be able to give them their full salary during this crisis period, we will certainly provide them with some relief,” he said.
Meanwhile, Shreejana Rana, President of the Hotel Association Nepal, said the sector was completely down as the inflow of foreign tourists had halted.
“The decision to operate or shut the business, however, depends on promoters,” said Rana, who is also the executive director of Hotel Annapurna.
She added that hoteliers would come up with a concrete decision within the next few days.
This development comes after the Nepal government earlier this month temporarily stopped issuing on-arrival tourist visas and also cancelled all spring mountaineering expeditions, including Everest ascents.
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South Korea pledges $39 billion emergency funding for coronavirus-hit small business
South Korean President Moon Jae-in on Thursday pledged 50 trillion won ($39 billion) in emergency financing for small businesses and other stimulus measures to prop up the country’s coronavirus-hit economy. The package is the latest in a string of steps Seoul has taken in recent days to curb pressure on Asia’s fourth-largest economy, including an interest rate cut, an extra 11.7 trillion won ($9.12 billion) budget and more dollar supplies. The government will issue loan guarantees for struggling small businesses with less than 100 million won ($78,000) in annual revenue to ensure companies can easily and cheaply access credit, Moon said. Local commercial banks and savings banks will also allow loans to be rolled over for small businesses if they cannot afford to pay off the loan when it is due, he said. “We’ve decided to take the measures to prevent small and medium firms and merchants and the self-employed from going bankrupt and ease anxiety in the financial sector”, Moon told an emergency economic policy meeting. “As the situation unfolds, we will scale them up if necessary.” The crisis has jolted South Korea’s financial market, soured business and consumer confidence and disrupted manufacturing. The Korea Centers for Disease Control and Prevention reported 152 new cases on Thursday, taking the country’s total infections to 8,565. The daily tally reversed a downward trend in new infections after new, small-scale outbreaks emerged, including in a nursing home in the hardest-hit city of Daegu, southeast of Seoul. The country had recorded fewer than 100 new infections for four days in a row until Wednesday.