The World Health Organization has just declared an end to the COVID-19 emergency after three years and 20 million deaths. Even before this, most countries have eased restrictions and international travel has resumed. The region’s largest economies, China and Japan, changed their cautious COVID-19 policies by end 2022. Moving ahead is a priority.
Yet COVID-19 case numbers have resurged across parts of Asia, including India, South Korea, Vietnam, Malaysia and Singapore. Thankfully, reported mortality and intensive-care cases indicate a less dangerous strain. No country has returned to lockdowns, although some give guidance to mask up in crowded areas and on public transport.
There is no panic. Instead, the danger may be “pandemic amnesia”. A growing apathy about safeguards is showing. In a recent survey more than 35 per cent of Singaporeans have no intention to take additional vaccinations. Anecdotal evidence also suggests that in many countries, few wear masks, even in crowded areas.
Yet the risk of another outbreak cannot be dismissed. As one WHO official said, “the emergency phase is over but COVID-19 is not … we can’t let our guard down.” There is much that governments, companies and citizens need to consider and prepare for.
Projecting the Cost
In human terms, the loss of life is incalculable. But efforts to count the cost of the pandemic in economic terms is necessary. Studies like those released by ASEAN and Asian Development Bank in 2020 show the scale of historical costs.
Future-looking analysis is also needed. The Asean+3 Macroeconomic Research Office (AMRO) has considered the economic prospects in today’s “new normal”. Adding to these is a recent report by global pharmaceutical company MSD, “A Neglected Burden: The Ongoing Economic Cost of COVID-19”. Looking at Australia, Hong Kong, Singapore, South Korea, and Taiwan, the economic cost projections are eye-watering: USD 2.6 billion in Singapore, USD 17.0 billion in Australia, and USD 27.5 billion in South Korea. This amounts to between 0.6 to 1.6 per cent of annual GDP, and could triple in a worst-case scenario.
The report shows that up to 96 per cent of the total costs are made up of indirect costs – mainly through losses in work productivity caused by lockdown and illness. On top of this are the costs of economic measures and government assistance to ameliorate the impacts on businesses and families.
Prevention, Preparation
What then should be done?
Thorough assessments of crisis responses and policies are needed. The Singapore government has done so recently with a White Paper, which was discussed in Parliament. Indonesia has published its own evaluation of the effectiveness of economic policies.
Few other governments have done similar. Still, some suggestions may seem self-evident.
The pandemic has revealed the limits of public and private healthcare facilities under the stress of crisis. Considerable investments by governments and private sector health corporations will be required. This is not only for hardware and infrastructure. The availability of healthcare workers who are skilled and fairly rewarded will need to be addressed.
There is a need to keep citizens abreast of appropriate vaccine regimes to reduce their vulnerability, even as fear recedes. Awareness and access to therapeutics, such as oral antivirals, is also important for public health. Such treatments can prevent serious COVID-19 symptoms, estimated by some to even halve the likelihood of hospitalization or death.
Socioeconomic policies too will need to adjust. Tools and technologies exist for better preparation, as well as for faster detection and response capabilities to a future outbreak. Such forward planning can prevent knee-jerk responses and overreaction.
If cases surge and the situation requires in future, the more apt responses would be mask mandates and temporary and partial restrictions in the community. Full-scale and long-lasting lockdowns, while seemingly safe, have inflicted high costs on the economy and society, especially on the most vulnerable. Governments cannot afford to deal with the resurgence of cases in the same way, lest they exacerbate the already mounting costs.
Balancing the Books
Confronting the pandemic crisis, and with lockdowns imposed, governments had to address the risk of a deep economic downturn. Billions were spent on saving jobs and companies; not just ladled out but garden hosed.
Perhaps erring on the side of caution was inevitable. But as the bills are now being totaled up, the high price of such extreme prudence is becoming clearer. Almost all governments have increased their debt levels sharply. The books, going forward, will need to be balanced.
Governments must increase revenues and make significant fiscal adjustments to balance debt-to-GDP ratio. This is to ensure sufficient fiscal buffer to prepare for unforeseen risks and address long-term challenges. Many will want to raise taxes but must be cautious about fanning inflation and dragging down economic recovery.
Such caution is advisable. After an initial rebound at end 2022, most countries have recorded poor results. For instance, figures in South Korea and Vietnam for the first quarter of 2023 slumped to around 2 per cent and 3.5 per cent respectively. This is despite both having dealt with the pandemic well.
Government spending will need to be tightened. Yet, impacts of the pandemic continue within more vulnerable sectors of society and warrant continuing support. Finding ways to efficiently promote inclusive growth by strengthening social safety nets will be more important than ever. Given competing needs, like investment in infrastructure, priorities must be set. Developing countries who often face higher costs for their debt must especially be watchful.
Rather than again spraying money through a garden hose, the new post-pandemic analogy for funding and assistance must be the pipette to dispense more accurately, with more efficacy and minimal waste.
Emerging from the pandemic, the world faces a long litany of issues that some term a “poly-crisis”, and headlines are often dominated by horrors of the Ukraine war. COVID-19 was already trending downwards in public consciousness, and most will find relief in the WHO’s official statement that the COVID-19 crisis is over.
Yet the situation still requires due attention, especially with a surge of cases and potential recurrence. Lessons from the past must be learnt and taken forward to build greater resilience for countries, companies and communities, and their financial bases. No one can afford pandemic amnesia.
Simon Tay is chairman of the Singapore Institute of International Affairs (SIIA), where Evelyn Tan is Assistant Director (ASEAN).
This article is part of a series of SIIA column on “The Politics that Matter to Business” for The Business Times. It was first published on 19 May 2023.
