By Daniel Moss
(Bloomberg Opinion) — Got both shots? Great, now please stay home. High vaccination rates may not be the passport to economic reopening and a thriving social life that we’d once hoped. As Asia’s inoculation drive recovers from a slow start, the revival of commerce is half-hearted at best. A shadow of 2019 may be the best we can aspire to.
More governments are proclaiming a transition to “living with Covid-19.” The virus won't go away, so the best we can do is vaccinate a high percentage of the population, the argument goes. But it remains to be seen what that means in practice.
Singapore, where inoculation rates exceed 80%, has signalled only a limited appetite for coexistence with the infection. Malaysia is gradually opening up after a horrendous few months, and Australian leaders have pledged greater freedoms as protection climbs. Prime Minister Scott Morrison has held out the prospect of families being able to make it across state borders for the year-end holidays. The winner of a leadership contest in Japan’s ruling party will inherit a vaccination rate that’s climbing, but no clearly defined sense of the activities a high level will enable.
Getting the balance between public health and economic resilience right will say a lot about whether Asia is still capable of accruing the superlatives that dominated discussion of the region for the past three decades. Centre of economic gravity, export powerhouse, dynamic market, pragmatic and far-sighted leadership committed to long-term expansion. You’ve heard them all. Is Asia willing to take the risk to live up to those monikers?
It’s true that the region’s inoculation campaign has picked up impressively. The rate for adults with both shots has increased to 63% from 21% over the past three months, according to Morgan Stanley. The firm projects 10 of 12 Asian economies will have achieved at least 80% by the end of the year. “Policy-makers in Asia have set a high bar for vaccination rates before reopening, and we believe that they will meet it,” Chetan Ahya, Morgan Stanley's chief Asia economist wrote in a recent note. “At that point, we expect a number of countries to modify their Covid management strategies and begin transitioning towards the acceptance of Covid as an endemic problem that they must live with.”
The commercial costs of remaining closed or in a state of semi-shutdown are widely seen as prohibitive. But does opening mean open or just the absence of a lockdown?
Singapore’s experience as an advanced economy with a robust health system may be instructive. In June, officials said that the city-state would begin the “transit to a new normal” as vaccination rates steadily climbed. Cases have risen sharply the past month, yet the government — to its credit — hasn’t yet re-imposed lockdown-like conditions, as it did amid a smaller surge in July. Booster shots began this week for people over the age of 60.
That doesn’t mean life is proceeding smoothly. Leaders have said the coming few weeks are crucial, and have urged people to reduce activities. One agency said this week that anyone over 60 should stay home. While malls are open, most restaurants require full vaccination. Offices are still accessible, but under strict conditions. Authorities “do not think it would be prudent to press ahead with any opening measures during this period, especially when we are in the midst of an exponential rise in infection cases,” Finance Minister Lawrence Wong, told reporters on Sept. 10. “In fact, that would be a reckless thing to do, under current circumstances.”
Governments that have worked hard to get populations protected and suffered severe hits to growth last year may be unwilling to take too many chances. The closer you get to managing Covid, the less appealing it is to go back to square one. We know there is an economic cost to status quo, but fully reopening has a price that too few countries are eager to pay.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.
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