The new Covid-19 has disrupted economies and businesses of every size across Sri Lanka and other regional states. Given the virus’s physical impact and precautions needed, many industries from SMEs to airlines to hospitality have faced critical economic downfalls. The economic impact is uneven across regions due to the changes in the trajectory of the pandemic. Until the threat of Covid-19 ceases, economies in any region will remain lethargic. Hence it is important to discuss how Sri Lanka should reinforce its international and regional corporation to uplift overall economy amid the impact of Covid-19.
Sri Lanka must take steps to promote international collaboration to handle the economic consequences that countries face as a result of global production networks and the global market. The COVID-19 induced impact is deemed as a policy threat that eventually restricts overall development in almost all the countries in the world. Crucially, the economic impact of a pandemic depends on the degree to which countries are tied to global supply networks that play a clear role in gross production.
The Focus on national Policies and decisions are now being shifted towards a national production and supply chain management, even though adequate time and resources haven’t yet being dedicated. The situation flags the necessity of extra attempts to ensure that global supply network movements are strategically aligned under regional cooperation.
The effect of Covid-19 on a country’s economy vary from industry to industry and nations, depending on the regional spread of the products and the scale to which they have been incorporated into the global production network. For Southeast Asia Covid-19 has caused a heavy economic drop in many industries in the region and are expected to turnaround next year. To make this turnaround remarkable, a tremendous economic, monetary and structural support needs to be sustained by regional governments to ensure a return to a healthy growth.
To secure a significant place, Sri Lanka’s supply chain strategy needs to be reorganized, so that Sri Lanka can reach a wider strategic dialog with the most integrated manufacturing networks in the world which would be beneficial in the post pandemic development. This can be achieved by fostering the substantial presence of economic stakeholders and proficient industrialists in the house. Connectivity growth among regional governments; a key factor in a stronger regional supply chain that has been practiced for a long time, can be leveraged for Sri Lanka to build robust network on both international and domestic levels.
Sri Lanka should connect on regional level to strategize networks of information which helps in identifying the new developments of the pandemic. To strategize this information network, active dialogues and strategic alignments are important in many primary ways including, the recognition of speed of outbreaks and its transmission within and between countries, the need for systematic and effective lockdown approaches, and government policy engagement to shield communities, shield vulnerable people and industries from the economic and social impacts of the crisis. This involves addressing stagnant bilateral assistance and improving access to concessional financing. Regional cooperation in development can therefore enhanced to create stability for a longer term.
It is also important to realize that overcoming of underlying risk factors of the pandemic is a global and not just a national challenge. As many other natural disasters, the COVID-19 pandemic allowed us to identify what country specific risk factors need to be addressed soon. Without reducing inequality, poverty and discrimination, those who are mostly affected will continue to increase their risk. This calls out for a rerouting of budgets and expenditures to even out investments to balance economic and social provisions, including healthcare, social protection, food, water and housing. Furthermore, the pandemic, has importantly revealed the absence of effective mechanisms for analyzing and managing risks related to the economy and society. Hence the pandemic should provoke a global and regional political and social discussion that go well beyond just a search for a vaccine.
The pandemic has exposed the need for a regionally established healthcare administration. Supporting regional health systems and effective management of cross-border controls to enable immediate and effective pandemic responses could have reduced the rate and spread of the virus. While many pharmaceutical and non-pharmaceutical entities strive to formulate an antiviral treatment, GAVI the global vaccine alliance has taken a proactive and broad approach that collaborate the expertise of pharmaceutical industry, supply chain actors, funding agencies and implementing partners to find anantiviral treatment. As such, formation of regional healthcare alliance is critical now for south-east Asia.
This kind of alliances should pave Asian countries the way to innovate, originate and promote cultural medicinal methodologies such as “Ayurveda” treatments among other. The constant mutation of Covid-19 virus has allowed it to create different kinds of stains all over the worlds. This characteristic resulted development of different stages in virus transmission globally. Hence countries are in different stages of experiencing, responding and recovering from it. This situation allowed countries to share country specific experiences and immunity enhancement methods which accelerate the regional fight against Covid-19. Furthermore, this regional healthcare alliance should continue and remain united to detect and address the post pandemic consequences as well. Moreover, accumulation of non-communicable diseases region wise could allow the alliance to detect countries at high risk and take more precautions during any kind of health crisis. Approaching the virus as a common regional and global crisis encourages greater bilateral and multilateral support. Even though both high-income and law income countries suffer from ongoing economic downturn every country should now focus on developing and strategizing country specific system to reduce inequalities thus reduce the vulnerability and risk. It is of high importance that Sri Lanka utilize existing regional cooperation mechanisms at the regional level to support the pandemic response. At the regional level, ASEAN has prepared a region-wide response, named the “ASEAN Collective Response to the Outbreak of Coronavirus Disease 2019”. This collaboration calls for means of strengthening the economic resilience of ASEAN member against Covid 19 through collective action to work with external and developmental partners by leveraging technology, digital trade and trade facilitation platforms such as the ‘ASEAN Single Window’, to reinforce supply-chain networks to continue operations amidst the COVID-19 outbreak. The leaders of the ASEAN Member States issued a statemen calling for a post-pandemic recovery plan and proposed the establishment of the COVID-19 ASEAN Response Fund.
How to strengthen ties with ASEAN
• Utilizing the diplomatic missions with all ASEAN member states and Sri Lankas cultural and historical ties with the ASEAN, Sri Lanka should develop a strategy to monitor post-Covid-19 market trends, demands and changes. This vital information could reinforce trade bring more investment opportunities in the post-pandemic era.
• With the rising number of confirmed Covid-19 cases in ASEAN has demanded for personal protective equipment. There is a shortage of Covid-19 PPE due to growing number of Covid-19 patients and panic buying habits of people. Even though ASEAN receive supplies from WHO and other non-governmental organizations, Sri Lanka should leverage its apparel industry and reinvent production lines to cater to this regional demand in PPE.
• Sri Lanka should also enhance its reliance and diversify its export markets in ASEAN regions by strengthening its trade and investment links to survive future pandemic and any other adverse shocks.
• China’s increased labor cost and its disruption in supply chain associated with Covid-19 has forced china to relocate some of their manufacturing sector to developing Southeast Asian region such as Vietnam. As few of Sri Lankan firms in the textile manufacturing have already integrated into regional value chains, Sri Lankan government should focus more on leveraging above industry relocation into building new industrial capabilities.
• ASEAN has a rapid growing middle class and increments in disposable income which make ASEAN an extremely vital source of tourists with good spending powers. In the post-pandemic time Sri Lanka should strategies its hospitality scheme to attract more tourists from ASEAN. This scheme should include effective promotion of Sri Lanka as a destination with well-developed air connectivity.
As every country in the region is now facing critical economic and cultural disruptions it is vital to understand the importance of Regional Corporation and reap the benefits of diplomatic relationships more than ever. It is timely vital to Sri Lankan government in committing to reinforce diplomatic ties with regional states.
Kavindya Piyasumana is a self driven researcher, who is passionate about addressing social, economic, and political issues and developing potential solutions to public discomforts.