GovAsia provides a platform for The Asia Foundation and its partners to examine critical social, economic, and political issues collected data in six countries on the impact those lockdowns have had in multiple sectors, including tourism, agriculture, manufacturing, and services.
Businesses have struggled to respond and adapt to the economic crisis caused by the situation. There are, however, many opportunities for governments and the private sector to support MSMEs. These opportunities become even more urgent as the majority of the region enters a second or third wave of the pandemic in mid-2021, with a recovery period still a long way off.
A majority of MSMEs reported revenue losses of more than 50 percent compared to pre-Covid levels. As a result of movement restrictions, MSMEs suffered from low customer volume, and many were forced to close.
Many of the businesses included in the research adapted to the crisis as well as they could, yet many of these changes resulted in reduced employee pay and altered working conditions. Some businesses, such as restaurants or handicraft producers, managed to adapt by shifting to home delivery, online sales, and online marketing.
Southeast Asia’s recent economic progress reversed
The Covid-19 pandemic and its containment measures have dramatically reversed Southeast Asia’s recent economic progress. Although the region mostly contained the spread of the virus in 2020, it has suffered devastating economic impacts, largely caused when international travel ceased almost entirely in March 2020, crushing tourism and connected service sectors.
Many small businesses closed permanently, unable to survive economic contractions brought on by travel restrictions and lockdowns. The situation worsened in late 2020 and early 2021, when new outbreaks and rapid transmission prompted renewed lockdowns and restrictions.
As the pandemic persists in mid-2021, Cambodia, Indonesia, Myanmar, the Philippines, Thailand, and Vietnam see new spikes in infections and restrictions. Job losses initially viewed as temporary have become permanent and household incomes continue to plummet.
