Late last month, G20 leaders released a statement advocating a spirit of solidarity in the global response against Covid-19. In these dire times, it is a call that should be heeded well beyond their membership.
Every government hit by the pandemic is waging a two-front war — combating the spread of the virus and fighting its socioeconomic effects. To contain the pandemic and limit suffering is the immediate, undeniable priority. Many have enacted extraordinary efforts to identify and treat those infected. Many more have imposed constraints on the movement of people — to slow down the pandemic through “social and physical distancing”.
We hope that these measures, although necessary, will be temporary. Along with the free movement of people, trade and overall economic activity have been put on hold.
It is clear that this lockdown has serious repercussions for the economy. Managing this front will require greater cross-border collaboration and a forward-looking perspective. Even a short economic shutdown can translate into job losses and higher incidences of poverty that could have a lingering impact beyond the short term. The longer this lockdown is necessary — and we do not know how long it will be — the more thought must be put into hastening recovery afterwards.
This pandemic demonstrates more than ever the current and future value of multilateral cooperation, which should ideally be in fighting form amid a global crisis. International organisations play a crucial role in monitoring and assessing the impact of a crisis on trade, investment and global value chains. A multilateral approach also touches on broader shared issues such as migration, access to healthcare and social protection, and access to credit.
It is possible for governments to go in the other direction as a result of Covid-19. We might find ourselves isolated from each other and with our borders closed far longer than would be appropriate. If this happens, we will be the poorer for it and more vulnerable to inevitable future challenges, the long list of which includes recessions, climate disasters and more pandemics.
To take this thought a step further, closer international cooperation is one of the best weapons we have against future pandemics. Governments can act faster and better in a coordinated manner if they have cooperated well in advance of a crisis.
Take the 21 members of the Asia-Pacific Economic Cooperation (Apec) forum, a diverse collective including a range of developing to advanced economies that have made a commitment to economic integration and regional cooperation. The Apec forum serves as a platform for governments to compare notes, share feedback and exchange information on best practices. Results of this are apparent in the current situation.
Apec health officials note that lessons learnt from past epidemics such as SARS, H1N1 and Ebola have improved the resilience of the global public health system. Region-wide, there is little disagreement on the need for a massive economic policy response. Each Apec member is rolling out fiscal stimulus to counter the impact of Covid-19 on lives and livelihoods. The amounts vary due to need and capacity — total fiscal packages range from 0.05% to 2% of gross domestic product, with a few outliers at 5% to 11% of GDP — but efforts have been intensified region-wide.
The response is unprecedented not only in terms of sheer scale but also in the wide net of support targeting different sectors. Rollouts are intended to keep businesses of all sizes afloat, with many economies launching liquidity facilities and loan guarantees as well as tax deferrals and other relief measures for small and medium enterprises, which are identified as the most vulnerable during a crisis.
Every economy has made allocations for health-related spending such as compensation for health workers and frontliners as well as additional resources for hospitals. Social spending has also increased across the board, often taking the form of payroll support or direct cash assistance, to keep workers employed and households solvent.
Although implemented unilaterally, these responses did not emerge in a vacuum and are informed by decades-long economic and technical cooperation among Apec’s membership.
Additional interventions, involving deeper multilateral commitments, are likely required. Economies can agree to remove measures hindering supply chains vital to the production and distribution of medical products and equipment.
They can commit to continuing free trade and investment, and to avoiding new protectionist measures, which may impede the rebound post-pandemic.
To reinvigorate the economy, disrupted supply chains will have to be reconnected and made more resilient, through digital innovation and business continuity planning, for example. This will require not only collaboration between governments but also with the private sector with its culture of innovation and enterprise.
Any policy gains during the crisis, in inclusion, healthcare and social protection — all necessary to successfully fight a pandemic and move quickly towards recovery — can be maintained through joint commitments at the regional level.
Ensuring the health and prosperity of our neighbours, after all, contributes to maintaining our own.
Tan Sri Rebecca Fatima Sta Maria is the executive director of the Apec Secretariat