The coronavirus recovery is in trouble before it even begins. As swiftly as the lockdowns across Asia were imposed, the process of lifting them will be slow and uneven. That means the region is months, if not years, away from any semblance of normal. Plans for full and partial reopenings in Australia, Singapore and Thailand sound reasonable in theory, but they won’t deliver the hoped-for economic bounce. These countries, deeply reliant on trade and tourism, remain largely closed to the outside world. Domestic consumers, buffeted by layoffs and wage cuts, are in poor shape to pick up the slack. Bankruptcies in Singapore were climbing even before the most stringent virus-suppression efforts.
Politicians say raising the drawbridge isn’t a big deal; domestic spending can make up the difference. Aussies will vacation closer to home. You can simply luxuriate in tropical Queensland resorts instead of the Maldives. But this is a big country with relatively expensive domestic air travel (one of two major carriers just collapsed amid the shutdown). With the jobless rate likely to climb to 10% soon, according to the central bank, any splurge seems frivolous. You can’t just plug a labor market back in after cutting the cord.
In Singapore, core economic sectors — tourism, lodging and conventions — will be among the last to restart. The government unveiled Tuesday a phased reopening after two months of lockdown. From June 2, schools will gradually welcome back students, limited family visits can occur and many businesses that don’t interact with the public can resume. Large corporate gatherings, as well as sporting and cultural events, are on hold. Some activities will be shelved until a vaccine is found, or Covid-19 is no longer deemed a risk.
Officials in the city-state say they are prioritizing safety and want to avoid a second wave that will further retard the recovery. While the concern is entirely justified, it comes at a cost: Singapore attracted 19.1 million visitors last year, more than three times its population. Tourism makes up about 4% of GDP, and supports a substantial hotel industry and retail scene. Yet Singapore Airlines Ltd.’s fleet remains mothballed. All this adds up to a grim economic outlook: Gross domestic product will shrink 8.5% this year, Citigroup Inc. predicted.