Tight Restrictions And Swift Policy Response: How Countries In The Asia Pacific Have Tackled COVID-19
Since the unprecedented outbreak of the virus, policy makers have introduced measures to mitigate the diverse impacts imposed on society. With distinct country circumstances in place, the government responses vary across regions – all of which come with an extensive economic cost.
August 17, 2020
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Earlier this year, The Adecco Group released a report analysing the government responses of 12 countries, including the UK, USA, Germany, and France, outlining which policies were most successful and which were not.
The conclusions drawn from the report pointed to the fact that the size of the stimulus package and effective implementation of short-term work programmes have had the largest positive impact on the countries’ ability to mitigate the economic damage caused by coronavirus.
We have now extended this study to the Asia Pacific region, monitoring the policy responses and economic implications of 12 countries such as India, South Korea, Australia and New Zealand.
Based on recent IMF forecasts and available statistics, we measured the economic cost of the policy responses through several macroeconomic indicators, namely: GDP, unemployment rate, stock market index, Consumer Confidence and Purchasing Managers’ Index (PMI). As the effects of the government measures emerge, our data points to some interesting conclusions:
#1. A large economic stimulus combined with widespread testing and tracing is most effective as it helps:
The conclusions drawn from the report pointed to the fact that the size of the stimulus package and effective implementation of short-term work programmes have had the largest positive impact on the countries’ ability to mitigate the economic damage caused by coronavirus.
We have now extended this study to the Asia Pacific region, monitoring the policy responses and economic implications of 12 countries such as India, South Korea, Australia and New Zealand.
Based on recent IMF forecasts and available statistics, we measured the economic cost of the policy responses through several macroeconomic indicators, namely: GDP, unemployment rate, stock market index, Consumer Confidence and Purchasing Managers’ Index (PMI). As the effects of the government measures emerge, our data points to some interesting conclusions:
#1. A large economic stimulus combined with widespread testing and tracing is most effective as it helps:
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maintain public confidence necessary for economic activity
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countries rely less on severely restrictive measures such as full population confinement, reducing the impact on the economy
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minimize business disruptions as they can impose restrictions catered to their circumstances, instead of implementing a full shut-down of operations
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minimize the loss of working hours
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create temporary employment opportunities in the testing and tracing facilitation process
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#2. Timeliness of government policies has an influence on the consumer’s behaviour and confidence, outweighing the direct effect that the case numbers have on the investor’s anticipation of the economy.
#3. Decisive measures to protect the public health system not only save lives but also delivers better prospects for the economy.
Many countries have fragmented health-care systems with limited accessibility for the informal workforce. Governments must prioritize closing the gaps in health coverage to ensure that everyone has equal access to the services regardless of their occupational status.
#4. Systematic solutions must be put in place to resolve the challenges faced by the informal workforce.
The pandemic has revealed the vulnerability of the informal workforce, and the need for enhanced social security nets across the region. Countries that have implemented measures to support the unprotected workforce managed to maintain moderate unemployment levels and cushion the adverse effects that the crisis can impose on the region’s labour market stability.
Economic recovery will not solve the underlying issues of the informal economy. The pandemic has accelerated the need for Governments to implement public policies that facilitate the transition from an informal to a formal economy.
With the tightened restrictions and swift policy responses, many countries in Asia Pacific have successfully flattened its curve and begun to reopen its economies. Nevertheless, the situation is continuously evolving, with many countries facing new waves at varying levels of exposure. Although there cannot be a one-stop policy for all, it is crucial that key learnings are leveraged to ensure a smoother transition into the new normal.
For a more detailed analysis, please access the full report here. For an extensive list of government policies, please refer to the IMF policy tracker here.
#3. Decisive measures to protect the public health system not only save lives but also delivers better prospects for the economy.
Many countries have fragmented health-care systems with limited accessibility for the informal workforce. Governments must prioritize closing the gaps in health coverage to ensure that everyone has equal access to the services regardless of their occupational status.
#4. Systematic solutions must be put in place to resolve the challenges faced by the informal workforce.
The pandemic has revealed the vulnerability of the informal workforce, and the need for enhanced social security nets across the region. Countries that have implemented measures to support the unprotected workforce managed to maintain moderate unemployment levels and cushion the adverse effects that the crisis can impose on the region’s labour market stability.
Economic recovery will not solve the underlying issues of the informal economy. The pandemic has accelerated the need for Governments to implement public policies that facilitate the transition from an informal to a formal economy.
With the tightened restrictions and swift policy responses, many countries in Asia Pacific have successfully flattened its curve and begun to reopen its economies. Nevertheless, the situation is continuously evolving, with many countries facing new waves at varying levels of exposure. Although there cannot be a one-stop policy for all, it is crucial that key learnings are leveraged to ensure a smoother transition into the new normal.
For a more detailed analysis, please access the full report here. For an extensive list of government policies, please refer to the IMF policy tracker here.