GP Insights

GP Insights # 247, 8 February 2020

As the Coronavirus spreads, it impacts Southeast Asia more
Aparupa Bhattacherjee

What happened?
On 7 February, Singapore raised its risk assessment to the second-highest level of alert as the number of Coronavirus affected cases increased to 33. The Disease Outbreak Response System Condition (DORSCON) is currently orange, indicating the disease is severe, easily transmitted but could be contained. A day later, on 8 February, Singapore has identified seven more cases, raising the total number to 40. Singapore's Prime Minister, in his latest address on the issue, has said: "If the numbers keep growing, at some point we will have to reconsider our strategy." However, he is also confident of addressing the issue. 

Singapore, since last week, has blocked the entry and transit of travellers who have been commuting from mainland China, including suspending visa applications of the Chinese citizens. Besides Singapore, other southeast Asian countries - Vietnam, Indonesia, and the Philippines have imposed similar bans. 

Inside Singapore, there is a growing fear about the availability of basic groceries. According to a Straits Times news report, "A check of supermarkets across Singapore on Saturday (8 February) morning saw larger than usual crowds, although less than on Friday after the coronavirus situation alert was raised a notch from yellow to orange." The PM has hit the nail on this: "…fear can do more harm than the virus itself. It can make us panic, or do things which make matters worse, like circulating rumours online, hoarding face masks or food, or blaming particular groups for the outbreak." (The Straits Times)
 
What is the background?
The World Health Organization on 30 January has declared the outbreak of 2019-nCoV as the Public Health Emergency of International Concern. As on Saturday, 636 deaths and 31,161 diagnosed cases have been reported.

In Southeast Asia, in Singapore, Vietnam, Philippines and Indonesia, the virus has been transmitted not only from Chinese who were visiting but also from locals who came in contact with somebody carrying the virus. 

Lack of information on the virus and its symptoms has raised fear. A more significant problem is the fake news. In Malaysia, there have been reports of attacks and fake news through social media. 
 
What does it mean?
First, the spread of the Coronavirus highlights the integrated nature of the markets, and the need to get prepared to address a global health issue. The disease had its inception in one of the small markets in China has now spread at a faster rate outside the country due to the movement of people and integrated world connectivity. In 2003, during the SARS endemic, the technological aspects were not as advanced as today, but even after a month, the Coronavirus is yet to be contained in spite of all advancements. 

Second, the growth of the tourism industry as a new phenomenon. In Southeast Asia, more than 30 per cent are dependent on Chinese tourists.  The cancellation of visas and flights is bound to hit the economy of Southeast Asia as well. 

Third, along with tourism, the economy has witnessed a sharp decline since January as goods and services from China have been stopped due to the virus. In Singapore, which is heavily dependent on Chinese exports saw big queues and wholesale shopping due to fear of shortage. 

Fourth, several ongoing infrastructural projects in these countries are either funded or built by China. Many Chinese workers have come to  Southeast Asia to work on these projects. The outbreak may delay these projects, indicating a growing dependency on China. The outbreak is also likely to upset the global supply chain of goods. 

Last, countries such as Cambodia, Myanmar, and Indonesia have refused to take concrete actions in bringing back their citizens to showcase their solidarity to China. It appears for a section in Southeast Asia offending China looms large than the welfare of their own citizens. 

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