Political Uncertainty to Slow Down Southeast Asia’s Recovery
The ongoing political instability in several Southeast Asian countries like Malaysia and Thailand poses a great threat to economic recovery from the coronavirus pandemic, says economic expert.
According to Simon Tay, the chairman of the Singaporian Institute of Internal Affairs, some instabilities faced overshadowing. This occurred through the implementation of varying degrees of lockdown measures to slow down and prevent further spreading of Covid-19.
However, as these countries gradually started to lift off lockdown measures, domestic politics took the stage once again. Unfortunately, this has brought about government uncertainty.
“There is a concern that without political will and unity, some of countries are going to be much worse off. It’s not a health concern. Instead the real issue proves to be economic governance,” stated Simon Tay.
Malaysia and Thailand at Most Risk
Malaysia is a good example of how an unstable political atmosphere could hamper with economic recovery, according to Tay. The country went through a change of governance just before it entered lockdown in March. After several members of its former coalition ruling party deflected and led to the collapse of the alliance.
However, the government that replaced the exiting coalition has come under scrutiny with many questioning its stability. Multiple media outlets have reported that there’s a high possibility of a snap election occurring in Malaysia. That doesn’t look promising for immediate and future economic news from the country,
“There are lots of different politicking about small issues. But it adds up to a big question about political stability and the political attention in dealing with both economic and other issues,” Tay added.
Meanwhile in Thailand, one of the largest economies in Southeast Asia, is going through several governance challenges. There were reports that up to seven key ministers have resigned in the past few weeks, including deputy prime minister and minister of finance, at a critical time when the heavily tourism dependent country could use sound economic decisions the most. The intensified power struggle within the ruling party led to up to six ministers to quit the party. Then, they later resigned from their official positions.
According to former finance minister Uttama Savanayana, the exit of the ministers was supposed to help Thailand move forward by reducing “political pressure” that the prime minister could be facing from some ambitious members of the opposition to attain power in the coalition government.
While new ministers are reportedly have been appointed, the exit of former deputy prime minister will likely be felt in Thailand’s economy, especially with global cessation of international travel.
What Does Data Show?
Data from Johns Hopkins University shows that Malaysia and Thailand are the leading countries in Southeast Asia with the highest daily slowdown of new coronavirus cases.
However, along with the global economy, most countries will face a real challenge in trying to recover their economies from the adverse effects of the coronavirus pandemic. Experts added that this challenge will prevail regardless of how good the countries would have handled the coronavirus outbreak.
An earlier observation by Economic analysts Euben Paracuelles stated that Southeast Asia will likely experience a U-shape economic recovery.
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