According to estimates by Goldman Sachs Group, most Asian countries have only vaccinated a small portion of the population with Covid-19 vaccines and will not be able to achieve herd immunity until 2022. Meanwhile, the US
Wall Street Journal commentator Phred Dvorak points out that this could put some Asian countries on the `defensive`, forcing strict border controls because their populations have little developed natural immunity.
`The irony of Asia’s successful control of Covid-19 is that it will reach a state of herd immunity later,` said Andrew Tilton, chief Asia-Pacific economist at Goldman Sachs.
A Covid-19 vaccination site in Bangkok, Thailand, on March 1.
According to Tilton, the Americas and Europe could see the biggest economic growth in the next few quarters, while Asia will recover more slowly, despite having stronger fundamentals, or even in some cases
Many Asians are still happy to accept travel restrictions, along with other anti-epidemic measures, to keep the number of deaths from Covid-19 as low as possible.
`Most countries that have contained Covid-19 have tightened border controls instead of relaxing them, because they discovered that their domestic economies can operate at a relatively stable level without the need for migration.
However, border closures and other Covid-19 containment policies come with costs.
In Australia, last year’s border closures reduced the $31 billion the country receives each year from international students by 20%, according to Phil Honeywood, executive director of the Australian Association for International Education.
Ravi Singh, director of Global Reach, an agency that helps send South Asian students to universities around the world, said the number of students registering for Australian university admissions events has dropped by 50%.
New Zealand, a country that has kept the number of nCoV infections below 2,500 thanks to one of the world’s strictest blockades and quarantine programs, is suffering because its economy depends heavily on labor.
ANZ Bank estimates New Zealand’s economy is likely to shrink by 5% without tourism.
Zollner predicts that New Zealand’s borders will not reopen, at least until the end of this year, meaning that it will take until mid-2022 for the economy to fully recover.
GDP growth in Asia is generally still expected to be strong, partly because last year’s situation was so bad, making the increase over the same period look positive.
Stimulus packages also help boost growth.
The pressure to contain Covid-19 from the smallest possible clusters has led to a cautious mentality.
Goldman Sachs predicts that China’s GDP growth will skyrocket in the first quarter, then stay steady for the rest of the year, and that the US and UK will grow very strongly in the second and third quarters.
Thailand, where 20% of the economy relies on tourism, could be one of the countries hardest hit by border closures.
However, this number is also a forecast in case Thailand is able to vaccinate about 50% of the population by the end of this year, a scenario that some experts say is too optimistic.
On the popular tourist island of Phuket, businesses are calling on the government to allow them to invest themselves in vaccinating hotel, restaurant and tourism agency staff, so they can confidently welcome foreign tourists.
The Cook Islands, a small Pacific island nation between New Zealand and Hawaii where tourism accounts for about 80% of the economy, is in a similar situation.
Paul Ash, owner of a resort on the main island of Rarotonga, said his business has lost 90% of its income and shareholders are pouring in nearly $16,000 a month to maintain it.
`There will come a time when the situation cannot be recovered anymore. We are not too far from that scenario,` Ash said.