TOURISM, trade and general travel in Southeast Asia will not return to normal for the foreseeable future, said economists, as the world awaits a Covid-19 vaccine.

Asean states, whose leaders held a virtual summit on the coronavirus this week, will likely put in place rigorous screening systems for both citizens and visitors to curb the disease.

This, along with the fear of travelling and public gatherings even if movement restrictions are lifted, will crimp tourism revenues in the region for years.

“It will be difficult for the tourism sector to recover due to the grounding of international flights, especially from China, which make up a bulk of the tourism revenue for many countries,” said KSI Strategic Institute research director Voon Zhen Yi.

“Even if the pandemic is contained, it is highly unlikely for tourism revenues to return to pre-pandemic levels in the foreseeable future, as fears of a renewed outbreak will continue to hamper the sector beyond Malaysia’s movement-control order (MCO).

“Such fears will only be alleviated when a vaccine is found.”

Lockdowns in many parts of the world have adversely affected tourism incomes through pay cuts, unpaid leave and layoffs.

“Another negative effect is that people without sufficient disposal income will not consider travelling, regardless of the incentives introduced by various governments to boost tourism,” said Voon.

“It is expected that the tourism sector internationally will scale back expected demand. This implies that many operators will go out of business in the coming months, during and even far beyond the MCO.”

In terms of trade, export restrictions by producing countries have led to some supply disruptions. Vietnam, the world’s third-largest rice exporter, imposed a ban on March 24, with Cambodia following soon after.

Regardless of whether Asean nations deal with the virus well, a 14-day quarantine for travellers may be the “new normal” to prevent the import and spread of Covid-19.

“It is extremely critical for Malaysia and other countries to flatten the Covid-19 curve, and to see to it that it’s under control. Only then should the focus shift to a resuscitation of their economies,” said Rajah Rasiah, a Universiti Malaya economics professor.

“However, the lockdown should not go on for long as it will kill industries and seriously undermine the supply of goods and services for both domestic consumers and exports.

“Hence, the cooperation noted in the special Asean meeting on Covid-19 in relation to trade must address these issues, so that supply chains can be revived and economies can gradually open up.”

He said training should be quickly provided so that logistics and transport networks, intermediate wholesalers, retailers and employees uphold the highest sanitation and health standards.

The Asean meet, held on Tuesday and chaired by Vietnamese Prime Minister Nguyen Xuan Phuc, saw the bloc’s leaders sharing information on the virus, the steps taken by member states to check its spread, treatment efforts, the supply of personal protective equipment, and the reviving of production to support trade and investment.

MIDF Amanah Investment Bank research head Imran Yassin Yusof called for early planning for a post-pandemic economic recovery, but cautioned vigilance.

“We must be vigilant and not rush into opening up the economy, whether domestically or regionally. We believe Asean can work together by enhancing trade links among one another and with large trading partners, such as China and the US.

“External trade may need a boost. Trade has not been permanently affected, only hampered due to lower demand.

“We expect that trade will gradually return to its normal growth path once Covid-19 is contained. It’s similar with tourism. We believe that it will take some time to return to pre-Covid-19 levels, but it eventually will.”

Frequent meetings have been held among the Asean Plus Three countries, namely the regional grouping, China, Japan and South Korea.

Malaysia has played a leading role in the Asean Emergency Operation Network for Public Health Emergencies by circulating daily situational updates and information on prevention, detection and response measures, complemented by real-time information-sharing on confirmed cases and cross-border infections, said Wan Farisan Wan Sulaiman, section chief of the Finance Ministry’s fiscal and economics division.

“The way forward for Asean is to expand the sharing of best experience between member states to avoid the risk of nations missing out on crucial information, policy coordination and strategic options.” – April 19, 2020.