Bologna Institute for Policy Research at SAIS Europe | Event Reports
Racism and Discrimination in Europe as Tools to Increase Distrust, Undermine Democracy, and Threaten Liberal and Internationalist Governance
ALFIAZ VAIYAEuropean Parliament Anti-Racism and Diversity Intergroup
A Green Recovery: Which World Do We Want After Covid-19? - A Dialogue with European Commission Executive Vice President Frans Timmermans
FRANS TIMMERMANSEuropean Commission Executive Vice-President for the European Green Deal
Short- and Long-term Consequences of the Covid-19 Pandemic for Southeast Asia
MICHAEL G. PLUMMERDirector of SAIS Europe; Eni Professor of Economics of International Economics
It is important to highlight the Association of Southeast Asian Nations (ASEAN) in the crisis, particularly since this region of 650 million people often receives less attention
than its Northeast Asia neighbors such as China. Dr. Plummer argues that in the post-COVID
economy, future international cooperation will be essential in addressing the uncertainties
exacerbated by the pandemic.
The short-term economic implications for Southeast Asia paint a relatively favorable picture.
Regional GDP is predicted to rise by 1% in 2020. While this is about a five percentage-point decrease
from 2019, it is high compared to many other areas. For example, the IMF forecasts that growth in
the Euro area will contract by 7.5% and in Italy by 9.1%. Moreover, Southeast Asia is expected to
recover in 2021 with an expected GDP growth rate of 4.7%. In fact, only Thailand is expected to fall
into a recession in 2020, due in part to its reliance on tourism. Therefore, the negative short-term
shock is predicted to be only temporary and the negative consequences subdued compared to other
Yet, uncertainties related to the performance of the global economy because of COVID-19 are
particularly problematic for ASEAN. ASEAN is uniquely vulnerable because its trade to GDP ratio
is around 100%. Compared to 47% in Latin America and 54% in South Saharan Africa, this indicates
a higher reliance on trade than other developing countries and, hence, greater exposure to the
vicissitudes of the global economy. Given the rise in protectionism prior to COVID-19—including
the US-China trade war and the impasse at the WTO--the negative effect on trade due to the pandemic
could darken economic prospects for this open region. In fact, while the reduction in trade growth
due to the income shock of COVID-19 and immediate protectionist responses such as export
restrictions on PPE-related goods are problematic, Dr. Plummer argues that it is merely expediting
an inward-looking trend in the global economy that was already in motion. "Economic distancing",
as referred to by Dr. Plummer, is likely to remain the major challenge that ASEAN will face in the
post COVID-19 economy. Two existing issues include: First, the lack of leadership from the United
States has inhibited large-scale multilateral cooperation under the World Trade Organisation (WTO).
The United States was once the chief protagonist of a liberal global trade order, and its inward-looking
turn and ostensible distrust of multilateral institutions have led to an impasse. Slow reform of existing
Chinese restrictions on trade and investment, from "forced" technology transfer to the protection of
trade secrets, is not helping matters. Second, the US-China trade war, which in the short-run might
benefit some ASEAN economies, has disrupted supply chains of which they are a part and created
uncertainties that are affecting negatively investment. Moreover, ASEAN may be forced to "choose
sides" between the United States and China, and a divided Pacific is the last thing the region wants.
Dr. Plummer concludes by underscoring that closer regional economic cooperation can go a long way
to rectify these problems: cooperation can overcome conflict.