Wednesday 24 Apr 2024
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This article first appeared in Forum, The Edge Malaysia Weekly on April 20, 2020 - April 26, 2020

The Association of Southeast Asian Nations, established through the Asean Declaration of Aug 8, 1967, identifies its roots based on accelerating economic growth through the promotion of coordinated regional actions and initiatives — most importantly, it was for regional peace, as the region faced a common fear of communism at the time of Asean’s inception. Fast-forward 53 years, and Asean member states today face the Covid-19 pandemic as their common enemy; at the time of writing, the number of cases in the region had exceeded 18,994.

This article attempts to examine how effective the regional bloc has been in collaborating pandemic preparedness and protocols, and the need for the region to refocus on decentralised and autonomous production this year to lessen the impact of overreliance on the global supply chains.

Asean’s coordinated initiatives

Several initiatives and actions have been taken by the Asean health sector to share technical expertise, risk reports and data analyses and to ensure maintenance of international health regulations and standards (see table).

Be that as it may, it can be said that, from the onset of the pandemic, each member state has had to generate its own protocol in regard to social distancing measures, border controls and suitable economic stimulus to be put in place.

We recognise that Asean comprises diverse economies at various stages of market maturity. As ZICOlaw is present in all 10 Asean countries, however, we have regional mechanisms in the health sector to look into contract interpretations, force majeure and employer obligations. We have seen that, regardless of common, civil or hybrid legal systems of the 10 Asean jurisdictions, shared opinion and response can be found that have allowed us to adopt a common protocol for our clients. Invariably, this also applies to how our leaders could have better resolved common difficulties and challenges across the region.

The pandemic’s economic impact is heightened by Asean’s reliance on China as its second-largest trading partner. While its members have each issued a variety of fiscal and non-fiscal measures to soften the short-term impact of the pandemic, there appears to be a vacuum in terms of strong leadership for coordinated efforts in the region. It could be said that a regionwide streamlined response framework, or agreed protocols, could be better coordinated and put in place instead of the current ad-hoc approach, which has given rise to issues such as stranded employees and supply chain disruptions.

Social distancing, MCO and border controls

As early as Jan 30, 2020, the World Health Organization (WHO) had identified social distancing as a necessary action to flatten the curve and combat further transmission of the virus. In Asean, the quick and bold actions by the Philippine and Malaysian governments — instituting movement and mobility control orders within its shores — were, arguably, hard decisions made. Further control orders were then instituted requiring borders to close — first partially, thereafter fully — where all overseas travel and arrivals were curbed.

While this is commendable, it is important to recognise the mobility of its citizens working within the region. A good example is Singapore’s reliance on Malaysia’s workforce and the ad-hoc announcement between the two countries on March 23 and March 18 respectively that resulted in confusion and chaos at border control checkpoints. In this regard, closer coordination by Malaysia and Singapore leaders would have been more ideal and effective.

China-reliance and supply chain disruptions

As China was closed for most of 1Q2020, it is vital for Asean leaders to come together earlier to address supply chain disruptions and the need to self-supply. While globalisation and the co-dependency of an efficient global supply chain have fuelled the region’s growth in recent decades, the lesson learnt from these border controls is surely the fragility of the system itself.

We agree that implementing border controls and travel bans are essential. Overly stringent measures can, however, cause disruptions in supply chains that rely heavily on the movement of goods. In this regard, a delicate balance has to be struck between implementing overarching protectionist measures and preserving national health and safety.

In the region, many strong Asean brands and businesses could pull together to fill the gap left by China. For example, the world’s biggest medical gloves manufacturer by volume, Top Glove Corp in Malaysia, could have continued manufacturing 200 million gloves a day without interruption, but it had to halt production until its packaging suppliers obtained the requisite approval to operate, following the shutdown under Malaysia’s Movement Control Order. A deeper study on the supply-and-demand capabilities that can be resourced within Asean may prove useful to ensure a more self-reliant region, in times of both prosperity and crisis.

Conclusion

For an economic bloc, 53 years is a considerable amount of time to have reached some maturity in coming together in a crisis. Past crises would be useful parameters for a measure of preparedness and protocols that can be commonly adopted. Close communication in times of isolation is key, and future focus on self-producing for Asean-made and Asean-reliant goods would help further propel the region’s growth in sustainability and creativity.


Hanim Hamzah is regional managing partner at ZICOlaw Network and Senior Fellow of the CIMB ASEAN Research Institute. This article represents the author’s opinion and does not necessarily reflect that of the ZICOlaw Network. It also does not serve as substitute for specialist legal advice. The author is grateful for research undertaken by Aravendrajan Subramaniam.

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