Question

what is the effect of manufacturing in corona virus to related in ASEAN

Answer 1

Ans. Corona virus will have a negative impact on ASEAN's economy and that of the rest of the world. Key sectors have been affected, particularly travel and tourism, and retail and other services sectors; business operations hence supply chains disrupted; employment and livelyhood put at risk; while consumer confidence has declined. The Asian Development Bank [ADB] recently released its Asian Development outlook 2020, and in light of the Covid-19 outbreak, it forecasted a 2.2% growth for developing Asia, and a 1% growth for southest Asia, on the back of China's economy losing speed. Compared to the forecast made in December 2019, these lower forecasts gives an indication of the extent of the repercussions from the outbreak. China is ASEAN's biggest external trade partner and investor. In 2018, it had a share of 17.1% to ASEAN's total trade, and continued 6.5% to ASEAN's total FDI inflows. ASEAN's supply chains are heavily integrated with China's manufacturing sector. Apart from China, the other countries significantly effected by the outbreak, US and the Euro area, are among ASEAN's largest trade and investment partners, and these countries are also effected by the outbreak. The WTO has estimated that world trade is expected to fall by between 13% and 32% in 2020. In ASEAN, the pandemic has so far brought immediate disruption in economic activities across the region, as evident in the decline in tourism flows, disruption in air travels and weakening in consumer and business confidence, as several countries imposed lockdowns, community quarantines and stay at home to prohibittions to contain the virus. These measures intensified as the stopage in production, disruptions in business operations, and loss of livelyhood and income for workers. Thailand and Singapore already revised their growth projection due to the slump in tourism. On march singapore further announced that it is looking at a worst case scenario of its GDP shrinking by 4.0%. As infectious cases continues to rise around the world, the risk of an abrupt tightening of global financing conditions also heightened. In the US Dow Jones industrial average shed 2999 points or 12.9% on March marking its second worst percentage loss in a day, similarly in ASEAN. The uncertainties brought about by the pandemic also triggered a swift outflow of capital, causing dive in the markets and a rapid depreciation of the exchange rates across the region. Around a fourth of the stock market value in Indonesia, Philippines, Thailand and Viet Nam were wiped out. The manufacturing sector crashed severely. The largest economies in the world, i.e. US, China and EU are the main ones reeling from the supply and demand shocks. These economies are also ASEAN's main trading partners. The current COVID-19 pandemic has led to significant and lasting economic implication, including productivity losses, supply chain disruption, labour dislocation, and potential financial pressure on businesses and households. The ASEAN's ecnomy is alredy on the verge of a global recession and it may worse in the comming months. Therefore there is a need to take extra measures to mitigate the impact of corona, while restoring confidence, preserving financial stability, and reviving growth.