Asean’s virus dilemma

The Covid-19 pandemic poses several challenges to the Association of Southeast Asian Nations (Asean), intensifying regional poverty and inequality. The growing hardship will also pose a major threat to its economic integration.

The gloomy outlook is forecast by the United Nations in a new report, which urges leaders of member nations to seriously look into the problems. The UN Secretary-General’s Policy Brief issued on Thursday recognised Southeast Asian countries’ containment measures and governments’ swift actions to battle the pandemic have spared Southeast Asia the degree of suffering and upheaval seen elsewhere. Regional cooperation also has been robust across multiple sectors.

Still, Asean must go further and address the serious socio-economic setbacks which threaten to further deepen inequalities across the region. “As in other parts of the world, the health, economic and political impact of Covid-19 has been significant across South-East Asia — hitting the most vulnerable the hardest. The pandemic has highlighted deep inequalities, shortfalls in governance and the imperative for a sustainable development pathway. And it has revealed new challenges, including to peace and security,” the report says.

It said the crisis threatens to destroy the livelihoods of Southeast Asia’s 218 million informal workers, who represent anywhere between 51% and 90% of national non-agricultural workforces. Without an alternative income, social protection systems or savings to buffer these shocks, workers will be pushed into poverty, reversing decades of poverty reduction.

While the UN warning is acknowledged, the problem is not easy to solve, particularly when Asean is facing challenges shaking its economic integration.

Established in 2015, the Asean Economic Community (AEC) is one of the three pillars of Asean striving for economic integration into a single market through the free movement of goods, services, investment and skilled labour.

In fact, leaders and policy makers in the regional bloc this year have been assessing progress toward political cohesiveness, economic integration and social responsibility to mark the half-way point of the 10-year journey toward the Asean Community Vision 2025. The journey began with the formal creation of the AEC in 2015.

Unfortunately, the pandemic has disrupted the momentum, making it harder for the 10-member grouping to achieve its goals. Its devastating global impact is creating unfavourable conditions for multilateralism.

While the global pandemic remains critical, each Asean member state tends to implement unilateral responses to the economic impacts, including tough measures which bar free movement of transnational activities.

This seems to be in line with the global trend of socalled deglobalisation. Carmen Reinhart, a professor of international finance at the Harvard Kennedy School, recently told Bloomberg that the era of globalisation is probably dead due to the spread of the coronavirus.

it has prompted governments to shut borders and raise barriers against exports of food and even health products. Some nations also are seeking to redirect production of key supplies back home after factory shutdowns frayed global supply chains. Covid has left countries feeling they need to be self-reliant in an unprecedented way.

The question for Asean leaders is how to keep regionalisation and integration intact in the post-Covid-19 era in which transnational economic activities could change forever.