KUALA LUMPUR (April 21): Many of the brick and mortar businesses, in particular around the Asean region, will likely be wiped out if the Covid-19 pandemic lockdown prolongs, and unless market confidence is restored, says CIMB Asean Research Institute (Cari).
It said this is particularly the case for micro, small and medium enterprises which are struggling to survive the onslaught brought about by the pandemic.
This comes in the wake of many businesses worldwide being adversely impacted by the lockdown measures imposed by their respective governments.
“Unless these businesses are ready to migrate to online platforms with delivery service provided, these businesses will struggle to survive this pandemic tsunami. Equipping these businesses digitally in the shortest possible time would be the challenge for the ASEAN governments,” Cari wrote in an article titled "Tackling the economic impact from Covid-19: Fiscal remedies across Asean countries", published on its website today.
The reality is that ASEAN is still grappling with managing the Covid-19 health crisis, each at different stages in the pandemic, Cari said.
As of April 20, Malaysia’s lead in the number of infection cases in the Asean region, has been surpassed by Indonesia, the Philippines and Singapore. As of yesterday, Malaysia has 5,425 confirmed cases. Indonesia has 6,760 cases, while the Philippines has 6,459 and Singapore has 8,014.
Commenting on the post-pandemic recovery, Cari said each Asean country will have different post-pandemic recovery strategies, depending on how well the pandemic is contained and hence affecting the extent of fiscal measures required for recovery.
For now, only Singapore has a recovery plan in view while post-pandemic economic measures for many Asean member states remain to be seen, it said.
“It is foreseeable that some member states which have announced substantive relief and stimulus measures may have to contend with budget deficits in 2020. Having sufficient foreign reserves would allow these countries to not depend on offshore borrowings.
“Ultimately, in the absence of a vaccine, physical distancing would still define the new normal of 'business as usual'. Long-term relief for industries requiring more physical interaction such as travel, hospitality, tourism, retail, typically employing a substantial workforce, may need extended support from the government,” it said.
#dudukrumahdiamdiam. We will deliver the news to you at theedgemarkets.com.