As 2020 comes to a close, governments worldwide are looking forward to a better 2021 as the economic outlook picks up amid the promise of the global rollout of the COVID-19 vaccine. In the latest edition of ‘From the Hill’, we look at how Southeast Asia’s governments are taking a cautiously optimistic approach towards stimulating sustained economic recovery as the world enters the next normal.
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Developing Asia's projected 2020 contraction to be less severe than expected — ADB
The recent milestones in the COVID-19 vaccine’s development have undeniably been a shot in the arm for the economy. However, policymakers in Southeast Asia are under no illusions that the vaccine’s mass rollout will bring economic performances back to the levels they once were, even for nations on a clearer path to recovery, such as Singapore, which will soon receive their first shipment of the vaccine, or Vietnam, which its going its own way by trialling its own vaccine.
For other nations in the region, COVID-19 continues to rage on; however, there is reason to be optimistic. Hard-hit nations such as Malaysia and Indonesia are projected to see their economies rebound next year. Granted, their roads to recovery will be arduous, but even the somewhat muted optimism is a crucial step forward towards achieving the sort of bounce back that seemed unlikely just a few months ago.
Southeast Asia’s policymakers must therefore focus on boosting the economy in the short term to lay the foundations needed for a sustained rebound. On this front, greater digitalisation of the economy may prove to be the catalyst. 2020’s norm of social distancing and remote working drove up the demand for technology products and services and so investments made to help grow regionally-based digital companies will generate the momentum needed for long-term recovery.
It’s a tough journey ahead and we need to buckle in for the ride. Still, the innate economic potential in Southeast Asia means that once we eventually arrive at our destination, the fortunes of the region’s societies, businesses and governments will be rosier than ever.
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