Southeast Asia’s rise from the pandemic reveals promising opportunities
The Covid-19 pandemic pushed more than 4.7 million people in Southeast Asia to extreme poverty, setting back the numerous efforts which have made Southeast Asia a prime example of successful poverty reduction in the past decades. With the progressive easing of restrictions and opening of borders for travel, Southeast Asia is on a great path to retrieve jobs lost from Covid-19 and bounce back towards robust economic recovery.
The pandemic has led to widespread unemployment, worsening inequality, and rising poverty levels, especially among women, younger workers and the elderly in the region. With a reference scenario of no-Covid, it was estimated by the Asian Development Bank that the region led to 9.3 million fewer jobs being created in 2021.
Today, Southeast Asian economies are recovering slowly, though growth remains volatile and the economic situation remains fragile. We are seeing more intensified efforts across the region to build back greener and better. The region has made great strides to build back a stronger, better economy.
According to a recent poll by the Asia-Pacific Economic Cooperation on digital skills gaps, 75% of employers report major skill mismatches for individuals entering the workforce. To produce a future workforce that is better able to support a contemporary economy, more investment is required. Significant improvements in education systems, programs promoting workplace apprenticeship and training, and incentives for reskilling and upskilling are all part of this strategy.
Countries can improve their competitiveness by removing trade barriers to increase efficiency and productivity, cut red tape, improve logistics, and promote small business modernization through technology adoption and incubation.
In order to finance recovery, policymakers in the area must also strengthen macroeconomic fundamentals and preserve fiscal restraint in debt management. In Asia, huge Covid-19 response packages have significantly increased fiscal deficits and debt levels. As Southeast Asia recovers from the pandemic, governments must address existing economic and financial imbalances while also ensuring sufficient foreign reserves and policy room to cushion future shocks.
Moreover, as countries work to speed up their economic recovery, they should go beyond the idea of pursuing “business as usual”. This crisis provides an opportunity to increase green investments and set the foundation for a more sustainable economy. Rivers and oceans should be protected, and countries should be encouraged to switch to cleaner fuels.
By aggressively recycling and reusing resources, the public and private sectors could collaborate more closely to lessen the industry’s environmental impact. Reductions in carbon emissions should be rewarded through tax policy. Green infrastructure projects should be pushed in recovery plans because they are both excellent for the environment and a key source of growth and jobs. For example, the Asian Development Bank is collaborating with regional and international partners to help economies transition to more sustainable alternatives. This people-centered approach to recovery can help create more productive jobs, especially in hard-hit industries like transportation, hospitality, and tourism. It has the potential to reverse Southeast Asia’s productivity trends, which were reversed due to Covid-19.
With Southeast Asia’s promising growth opportunities, Altios is here to accompany small and mid-cap companies every step of the way on their journey towards international expansion.