JAKARTA (TheInsiderStories) - IHS Markit said large disparities in road infrastructure and healthcare provision are widespread within the Asia - Pacific, potentially causing the most significant delays in countries with a high density of rural populations. Challenges facing these countries in supplying peripherals—such as syringes and personal protective equipment—will further complicate rollouts.
With the new informations, the agency estimated a real GDP growth for the Asia Pacific at 5.8 percent for 2021, the strongest regional expansion since 2010. The sharp rebound in economic activity, however, will primarily be due to favorable base effects after a weak 2020. Moreover, given that GDP growth reached 7.1 percent in 2010, this recovery is not especially robust, considering the magnitude of the contraction in 2020.
In January and February, anti-lockdown demonstrations took place across parts of Europe. In rare instances, dissatisfaction with government COVID-19 management will present existential obstacles to current leadership, she adds. Consequently, the risk of localized lockdowns will persist throughout 2021 in specific regions with outbreaks.
“With public debt at historic levels for a number of countries entering 2021, fiscal stimulus packages and support benefits cannot persist indefinitely. As such packages phase out, especially where vaccination campaigns are slow to get off the ground, so grows the threat of protest activity,” said Lindsay Newman, a director at IHS Markit in the latest report.
For instance, business and movement restrictions will likely be loosened in India, Indonesia, Malaysia and the Philippines, whereas delays in rollout and new outbreaks would trigger region-specific lockdowns in Australia, Myanmar, Pakistan and Sri Lanka. While, Hong Kong, Taiwan, and Thailand will probably continue to have limited movement restrictions, whereas stringent lockdowns are most likely to be imposed in Japan, in the run-up to the postponed Tokyo Games in July.
According to her, a successful rollout of vaccination programs will be critical, particularly in major economies in which consumer and business demands are key growth drivers. A meaningful recovery for most countries is unlikely until they return to their pre-pandemic levels of real GDP output in 2021 - 2022.
This is underpinned by the importance of expanding private consumption and fixed investment in several countries where these account for 70 - 80 percent of GDP, except for outliers like the Philippines and Singapore. Achieving high demand-driven growth is very dependent on successful vaccine rollouts, with the highest risk facing geographically remote and dispersed economies.
Furthermore, many governments are likely to start unwinding pandemic-related fiscal stimulus measures in 2021, which will almost certainly drag on growth. They are also likely to re-prioritize other spending towards vaccination campaigns, although that would not offset broader budget trimming efforts.
As the COVID-19 vaccine campaign is well under way in critical markets, the perceived slow uptake of vaccines in several countries is in-line with our expectations of a broad access to the vaccine in mid-2021. This is mainly due to the high level of logistical barriers, unrealistic target expectations and limited vaccine supply. According to IHS Markit data, 17 vaccine candidates intended for COVID-19 have been approved.
Looking ahead, beyond the clinical news and announced advance purchase agreements, it turns out that despite divergences around access, countries are facing a set of shared geopolitical challenges in administering their vaccine campaigns. Thus far, vaccines developed in only a small number of countries have received some form of regulatory approval allowing for distribution.
This suggests that into 2021, a wide number of countries will likely continue to depend on securing access to externally-developed and in many cases externally-produced vaccines. As IHS Markita already seeing, countries are looking to offset this risk by accessing vaccines from diverse sources. Other countries are likely to become overly-reliant on narrower supply chains and opening the door for “vaccine diplomacy.”
While, countries that have invested in vaccine innovation and production are now jockeying to be pivotal suppliers to vaccine importers as an expression of their soft power. Leading the news on vaccine bedfellows has been China’ signage of bilateral to deliver its vaccines across Africa (including in Equatorial Guinea, Senegal), Latin America (including Chile, Peru), Europe (including Ukraine, Serbia) and the Middle East (including Egypt, Morocco).
India has donated millions of its Covishield within its neighborhood “in keeping with the country’ stated commitment to use India’s vaccine production and delivery capacity to help all of humanity fight the COVID pandemic.” She concluded, securing supply agreements is a necessary but not sufficient condition to ensure an effective domestic vaccine rollout.
Countries with leading numbers of APA are struggling under a host of logistical and operational constraints to actually get jabs into arms. Even as vaccine campaigns get underway, government containment efforts such as local and national lockdowns are likely to persist in the coming months. These restrictions impact government’s revenue levels as economic activity remains below pre-COVID-19 levels.
Edited by Editorial Staff, Email: theinsiderstories@gmail.com
