ASEAN leaders urged to reopen economy gradually

ASEAN leaders have been urged to take urgent measures to ensure uninterrupted supply chain for essential food, intensify ASEAN-wide trade facilitation and plans for the gradual reopening of the economy to restore market confidence.

ASEAN Business Advisory Council (BAC) in its press statement said, “We commend our ASEAN leaders, under the Chairmanship of Nguyen Xuan Phuc, Prime Minister of Vietnam, for staging a special summit through video conferencing on April 14 to put together the much-anticipated ASEAN Collective Response to the Outbreak of Coronavirus Disease 2019.

“In these most trying times, when the effectiveness of multi-lateralism is put to a serious test, we hope that the call to make ASEAN cohesive and responsive will be truly fulfilled in this de-fining moment.”

The ASEAN BAC gave a nod to the various initiatives and measures undertaken by ASEAN member states in addressing the needs of the most vulnerable, especially micro, small and medium enterprises (MSMEs).

While the council “fully appreciates and supports the reaffirmation of the leaders in their commitment to take collective action and coordinate policies in mitigating the economic and social impact from the pandemic, safeguarding the people’s well-being and maintaining socio-economic stability”, it also believed that “these unprecedented and extraordinary times warrant bold and decisive actions” to generate “confidence and assure our markets, businesses and peoples”.

It also called for ASEAN member states to “work together and gradually get the economic engine up and running again, with all the critical health and science-related issues carefully considered in the delicate transition”.

As such, the council and its partners have put forward a number of key areas that require immediate attention: food security, gradual re-opening of the economy, trade facilitation, social safety nets, an ASEAN pandemic recovery fund, the Regional Comprehensive Economic Partnership (RCEP), and the voice of the private sector.

In terms of food security, the ASEAN BAC sees the importance in ensuring “uninterrupted production and supply chains of essential food and beverage, including the preservation of open borders for goods, both at upstream and downstream levels”.

It added that there should also be preventive measures in place for the workforce involved in the logistics of the food and beverage supply chain infrastructure.

The council also believes that seeking public and private consultation for any policy deci-sion regarding food supply will “mitigate the effects of the crisis as much as possible”.

When it comes to the re-opening of the economy, the ASEAN BAC said there has to be well-calibrated plans for “cities, municipalities or towns sufficiently established by authorities to have contained the epidemic”, allowing for “less-controlled move-ment of people, trade and commerce, especially for providers of essential goods and services”.

With regard to trade facilitation, the council sees an opportunity for reforms by removing “non-tariff barriers, especially for essential and critical goods and services, such as food and beverage, agriculture, medical and education”.

It added that the reforms are vital to enhancing “the preparedness of ASEAN to absorb redirection of supply chains from China to Southeast Asia to preclude recurrence of shortages of key inputs, especially for medical purposes, produced solely or mainly in China, as highlighted by the pandemic”.

Amid the virus fight, the council also believes in mobilising “the private sector to produce standard face masks and shields and personal protective equipment (PPE), and to use supply chain connections to make ventilators and other medical equipment at national and regional levels”.

In terms of social safety nets, ASEAN leaders were urged to encourage the private sector, especially large corporations, to “provide financial and other assistance to the (containment) efforts as well as to continue payment of salaries to their employees”.

While the council acknowledged regional governments’ efforts in providing assistance to those affected by mass layoffs, daily wage earners and those in the lower tier of the economic pyramid, “we see the need to strengthen unemployment insurance, universal healthcare, workers’ compensation and paid sick leaves as well as allow for more investments in public health”.

The ASEAN BAC also called for the immediate establishment of an ASEAN Pandemic Recovery Fund either through Asian Development Bank or other multilateral financial institutions with the aim of alleviating the economic impact of the pandemic.

Amid the failing global trade order, the council said, the RCEP should be “ratified as soon as possible” because “even before the COVID-19 crisis, with protectionist policies and trade war, there was a greater regionalisation of the world economy”.

It added, “We have to generate regional economic growth and cooperation to compensate for the sharply falling global demand.”

In response to ASEAN member states’ economic recovery plan for post-pandemic period, the ASEAN BAC believed the voice of the private sector is important in ensuring barriers to greater economic integration are removed while MSMEs, which are the backbone of the ASEAN economy, are “suitably advanced”.