Wednesday, May 26, 2021

Pacific rim countries sliding towards lockdowns

 Asia slides back towards lockdown | THINK Economic and Financial Analysis - ING: 

May 17, 2021 - "One of the key takeaways from our recent "What went wrong in India?" note was that this could easily happen elsewhere in Asia. With Taiwan and Singapore increasing restriction measures, and Japan extending its regional states of emergency - this could be playing out as we had feared... To those viewing the situation from Europe or the US, the handful of new community cases in Taiwan and Singapore may seem like a weak basis for ramping up social distancing measures and movement restrictions. But Asia can't be viewed in quite the same light as countries in these other parts of the world. 

"Firstly, unlike the US, UK and increasingly Europe after its slow start, most countries in Asia have made little progress in vaccinating their populations. Singapore is in better shape than most, with about 55 vaccinations per 100 population. But it has focussed on fully vaccinating the more vulnerable groups, so its numbers represent a large proportion of fully vaccinated people and a smaller proportion of the population with at least one vaccination than comparable countries in Europe.  Taiwan, in contrast, has barely vaccinated anyone, for a variety of reasons, some of which relate to political tensions with Mainland China. Japan, which is also struggling with daily Covid-19 cases close to its previous daily highs, is also lagging well behind international norms in terms of vaccination. 

"Secondly, Asia has a very low political tolerance for Covid-19, compared to most places in the West. Where a few thousand daily cases in the UK may represent a cause for optimism and re-opening the economy, a far smaller proportionate number of daily cases in Asian countries will lead governments to clamp down harder on transmission. Look at the extended lockdowns in the Philippines for example. This may represent previous experience with diseases such as SARS. It may just reflect a different perspective. For Europe, the central objective seems to have been to prevent the health services from becoming overwhelmed. In some countries in Asia-Pacific, including Australia and New Zealand, a more ambitious objective seems to be being employed.  

"Thirdly, as we saw from India, the lead time taken to move from a relatively manageable number of daily cases to medical and economic catastrophe is about a month.... In short, if the numbers are going up, even if they are still low, you don't have much time to nip this in the bud before you could be dealing with an India-like situation.... 

"Malaysia was already operating under new Movement Control Orders (MCOs) amidst rising cases. Thailand also imposed new restrictions at the end of April to try to curb rising daily cases. And Indonesia is still operating under a partial lockdown, as is the Philippines.... Korea's impressive recovery so far this year is also at risk from rising cases and tighter movement control restrictions.... 

"Were China to show more community cases, then we would ... require broader downgrades... So far, that hasn't happened. But although China is making vaccine progress, with a population of 1.3bn, and some questions about the effectiveness of local vaccines compared with some of the others being rolled out globally, any sense of calm could be misplaced.

"In short, and subject to a big caveat about new more transmissible and more vaccine-resistant variants, while some parts of the world seem to be making good progress towards fully vaccinated populations and re-opened economies, Asia, lagging well behind [in] the vaccination race, may see its return to normality delayed."

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