The Hosting of International Production in ASEAN, Post-Pandemic

Abstract

As with practically all countries, the novel coronavirus (Covid-19) pandemic has negatively impacted the growth prospects for ASEAN member states (AMS), with downward revisions in the growth forecasts for all member states, except Brunei.1 Indonesia, Malaysia, the Philippines, Thailand, and Singapore face negative growth rates for 2020. The forecasts are likely to be revised further downwards later in the year as the negative impact of the economic lockdown in some AMS in the first half of the year emerges. Each AMS is encountering challenges in preserving productive capacity, creating employment and stimulating demand. While a V-shaped economic recovery is forecasted by the IMF and ADB for 2021,2 much depends on the policies and plans that are or will be put in place to stabilise and stimulate the national economies. AMS are mainly relying on fiscal stimulus; but given their strong participation in international production and global value chains, trade and investment policies are equally important for their economic recovery.