With COVID-19 threatening economic havoc across the region, governments are trying to avoid knockout blows as they grapple with life or death policy moves and decisions affecting business survival. Mithun Varkey reports
The COVID-19 pandemic has forced governments across the world to resort to strict lockdowns to prevent the spread of the virus, which, in turn, has brought their economies to a standstill. This has presented a twin challenge to governments, central banks and other regulatory bodies – a health emergency coupled with an economic crisis.
Given the unprecedented nature of the crisis, policymakers have resorted to a variety of fiscal and policy measures and, without the luxury of being able to resort to a tried and tested emergency playbook, a lot of the measures taken have been unorthodox, and their impacts difficult to predict.
While some measures are ad-hoc, some may be here to stay. Making sense of the policy changes by various governments is a challenge in itself, especially for businesses that operate across markets.
Unprecedented policies coupled with the peculiar nature of the crisis make the way forward a tightrope walk for governments in both developed and developing economies.
“It is a balancing of interests,” says Rafael Morales, the managing partner of leading Filipino law firm Morales & Justiniano. “The major challenge is to revive the economy by reopening business establishments, without unduly negating or diminishing the benefits from the community quarantine or lockdown, which so far has minimized the spread of the disease,” he says.
This is a challenge for even the most developed economies in the region, such as Japan. “As probably similar for most industrialized countries, the major challenge is in keeping the economy afloat while at the same time ensuring that the spread of COVID-19 is adequately contained, and the health services are not overwhelmed,” says Lars Markert, foreign law partner with Nishimura and Asahi in Tokyo.