The inability to contain Covid is creating a lot of problems in the economy of the South east Asian countries.
“Indonesia, like many of the ASEAN economies, has yet to really get to grips with the Covid-19 virus,” Darby, global head of equity strategy at the U.S. investment bank, told “Squawk Box Asia” on Tuesday. “That seems to be the Achilles heel for the ASEAN economies at the moment,” he said referring to Association of Southeast Asian Nations regional grouping.
“A resurgence in more infectious mutations of the virus poses significant risks to Indonesia’s economic recovery,” Moody’s said in the report. It will also “challenge government plans to reduce the fiscal deficit to pre-pandemic levels, a credit negative.”
Days earlier, S&P Global Ratings issued similar comments, warning in a July 15 report that Indonesia’s “existing credit buffers on ratings will be chipped away if ongoing lockdowns are prolonged.”
On Tuesday, Indonesia President Joko Widodo announced an extension of pandemic-linked restrictions that are set to end July 25, Reuters reported.
Darby said Indonesia’s situation has to be put into context: The country’s balance of payments position is “actually very good,” he said, adding that its foreign exchange reserves are near record highs. On top of that, the Indonesian economy is also experiencing “quite a decent manufacturing revival.”
“The reality is that … you’re likely to not reach full economic potential until you get to some form of herd immunity,” Darby said. “Unfortunately, the potential for Indonesia to meet its pre-pandemic levels is probably quite low at the moment given the poor rollout of the vaccine.”
What happens next is just a matter of time. We will keep you updated on the news. So you should keep an eye out.
The Question is, What can Governments Do?
- Focus your aid on traditionally female-dominated fields like the service industry, retail, and travel.
- Women business owners are overrepresented in micro and small businesses, which are eligible for government bailouts.
- To help women financially, we should give them cash. Reduce women’s monetary reliance on men by focusing on them as individuals, rather than as members of households.
- Spend money on girls’ education. To ensure that girls return to school as soon as it reopens, we must create easily accessible tools for distance learning, such as the use of national television.
Encourage women to enter traditionally male-dominated fields. Women should be given more opportunities to learn, workplaces should be made more welcoming to female employees, and government funding for traditionally male-dominated fields should be tied to the proportion of female employees in those fields.