Emerging Asian countries are at different stages in different countries as response to the spread of the new coronavirus is required. In some countries, light is beginning to show, and economic activity is beginning to expand again. The spread of the disease is still spreading in some countries. At any stage, we should think about what we should do toward the long-term economic prosperity that has overcome the crisis.
Trends are growing for a long time
Developing countries in Asia were not immune to social and economic turmoil caused by the new corona. In addition to moving restrictions, trade and jobs around the world have been hit by measures to ensure interpersonal distances. The budget deficit will widen in much of Asia, and the overall debt level will continue to rise. Even if tourism, business, and consumer confidence have recovered, it can be said that the situation is likely to be overwhelmed by concerns about the re-spread of coronal infections and the severe economic environment surrounding the world.
However, although there are short-term challenges, the trend in many developing countries has led to long-term growth. We must not forget this.
Most emerging Asian economies have a good population, with india, Bangladesh and Southeast Asia accounting for more than one-third of the population. In addition, we have become able to provide not only innovation but also high-quality products and services. As proof of this, many domestic companies have been born that provide e-commerce and electronic payment services. In the wake of the new corona crisis, households, businesses and entrepreneurs are increasingly exploring new ideas and technologies as they seek new ways to shop, sell, finance, learn and communicate.
Emerging Asian economies have been able to withstand external shocks in the financial sector compared to the Asian currency crisis in 1997-98 and the global financial crisis in 2008. Foreign exchange reserves increased and the level of external debt fell. The current account balance has also improved. As the new Corona crisis spread in 2020, governments and central banks quickly launched a series of measures, including rate cuts, fiscal stimulus, and liquidity supplies to support households and businesses.
Still, the blow by the new corona is expected to be prolonged. In addition to urgent economic support measures, policy makers may likely take bold steps to enhance the attractiveness of their economies as investment destinations and business bases.
It's also important to prepare for climate change.
The following three areas to focus on are:
The first is to improve the local business environment and make it easier to do business. This includes eliminating bureaucratic formalism and corruption, easing restrictions on foreign investment, and reforming the labor market. Many countries have made remarkable progress in these areas, but further promotion will benefit them.
The second is to increase competitiveness and productivity through investment. Among them, transportation and energy infrastructure, communications and Internet connectivity, healthcare, education, urbanization by smart and low carbon methods. These will strengthen the long-term growth outlook for developing countries and hold the key to advancing technologies such as robotics, automation, 3D printers and artificial intelligence.
The third area is to prepare for climate change. Southeast and South Asia are susceptible to climate change, with low sea levels and stormy and rising sea levels, such as Dhaka, Ho Chi Minh City, Jakarta, Bangkok and Mumbai. The ability of countries and regions to withstand the threat of climate change will help companies and investors decide where to do business.
The new corona caused unimaginable human and economic damage just a few months ago. The impact is expected to last for months, if not years. But it's also an opportunity for policymakers and the business world to review and further move on with their reform goals. The country that catches this opportunity can find light ahead of hardship and get sound fundamentals for the future.