By Lobsang DS Subirana
Bangkok Desk, Mar 31 (efe-epa).- Countries in the Association of Southeast Asian Nations will be significantly affected as a result of the novel coronavirus’ effects on China’s economy, according to a Tuesday report by the World Bank.
The organization said in its “East Asia and Pacific Economic Update” that developing nations would especially feel the brunt of the effect COVID-19 has had on China given the close trade relationship and dependence they have on the country.
“The pandemic is profoundly affecting the region’s economies, but the depth and duration of the shock are unusually uncertain,” the report read. “Most vulnerable are countries that have poor disease control and prevention systems; that rely heavily on trade, tourism, and commodities; that are heavily indebted; and that rely on volatile financial flows.”
Thailand will be among the countries to suffer the greatest drop in growth, according to the report’s figures, with a negative 3 percent baseline and a lower case of up to 5 percent. It, along with Malaysia, is the only ASEAN nations to forecast a negative outcome in both metrics, with the only other Southeast Asian country being East Timor.
The heavy reliance Thailand has placed on tourism – which draws more than an annual 10 million Chinese people to the country according to the government’s statistics – and China’s continued economic investment is reflected in the performance predictions.
China, which has registered unprecedented losses since the outbreak began, is expected to see a 2.3 percent growth, a number that could drop to as much as 0.1 percent in a worst-case scenario. This represents a 3.8 percent contraction compared to the 6.2 percent figure it posted in 2019.
While Malaysia’s base growth forecast is only at a negative 0.1 percent, the figure pales in comparison to its 2019 growth rate of 4.3 and looks even grimmer in comparison to is negative 4.6 lower case, which could see it contract by a difference of up to 8.9 percent.
The report said poverty could increase by up to 11 million people based on the lower-case scenario, a rate that would especially affect Vietnam – where the number of impoverished would double – according to the report.
“For example, poverty rates could double among households in Vietnam linked to manufacturing reliant on imported inputs, and in some Pacific Islands where tourism is an important source of employment,” the report read, adding that “while these estimates for GDP and poverty are projections, they reveal the magnitude of potential economic distress and the need for urgent action.”
It said countries such as Singapore would see better economic performances because of its experience from the Severe Acute Respiratory Syndrome and Middle East Respiratory Syndrome outbreaks, which prepared it to enforce better containment measures.
The report added that the sooner developing countries manage to accelerate their ability to contain the spread, the shorter recovery time they may need. EFE-EPA