Economic recovery prospects in Southeast Asia encouraging

Petronas Twin towers. Photo: Bernama

KUALA LUMPUR: Economic recovery prospects in Southeast Asia are encouraging amid the post-COVID-19 pandemic, but not without persistent risks, according to a new report by the Asian Development Bank (ADB) launched today.

The report titled “Post-COVID-19 Economic Recovery in Southeast Asia”, examines growth opportunities, sectoral strategies, and priority reforms that can help countries boost their medium-term economic recovery.

ADB director-general for Southeast Asia Ramesh Subramaniam said the risks to recovery prospects in the region included heightened uncertainty from the Russian invasion of Ukraine and the evolving conflict, the emergence of coronavirus variants and the scarring effects of the pandemic through large employment and education losses, production disruptions, fragile business confidence, as well as declining productivity growth.

“Supporting industries with the competitive advantage to propel a green, resilient, and inclusive recovery will not only require sector-specific interventions by governments, but cross-cutting measures that encourage an enabling business environment, improved infrastructure, and stronger intra-regional linkages,” he said in the report.

According to the report, the COVID-19 pandemic has created new challenges for the tourism industry.

There are indications that the pandemic could lead to a fundamental decline in long-haul international travel, an issue exacerbated by the adoption of digital tools for meetings and events.

To rebuild the industry, the report recommends restoring tourism demand through strong marketing campaigns, safer travel standards, more diversified tourism offerings, better paid and more skilled workers, and stronger crisis management response to build industry resilience.

The region’s electronics sector also faces structural challenges, including narrow diversification across electronics supply chains, low value-added products and processes, disruptive technologies which could bring negative employment impacts and rapid changes in technology and consumption trends.

“To raise the dynamism of the electronics industry, the need to develop industry‑specific supportive policies such as smoother coordination between local business, international firms, and governments; technological upgrading of special economic zones for electronics; incentives for greater research and development and the development of skills and human capital,” the report highlighted.

The report also sees digital trade as having strong growth potential in Southeast Asia.
Much of the region’s digital trade now concentrates on digital marketplaces and information technology and business process outsourcing (IT-BPO), while software development is picking up in some countries.

“As demand for digital products and services grows, it is important to enhance digital connectivity, invest in logistics and distribution facilities, develop an IT–BPO road map, support skills development and training, and rethink digital regulations to protect consumers,” the report added. − BERNAMA

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