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COVID-19’s Effects On Asia’s Economy

Asia's Economy
The COVID-19 pandemic has caused severe economic disparities globally. Specifically, those living on the Asian continent have experienced significant economic damage and hindrance to their broad economic goals. About 15 million Southeast Asians have become impoverished since the onset of the pandemic in 2019. The delta variant, along with a resurgence of national lockdown measures, has caused another case of economic damage. Through analyzing COVID-19’s effects on Asia’s economy, it is clear that the continent can implement strategies in order to combat these high rates of poverty and economic disparity.

Low Vaccination Rates

Overall, Southeast Asia has lower-than-average vaccination rates compared to the rest of the world. However, some Southeast Asian countries have better vaccination rates than others. Singapore has the highest vaccination rate, at 77.3%, whereas Vietnam has the lowest vaccination rate at 7%. As Southeast Asia is Asia’s major area for good economic production, this has led to a decline in economic growth. These low vaccination rates have allowed COVID-19’s effects on Asia’s economy to be extremely negative as low-income countries have had low vaccine rates due to their economic disadvantage. Around 55% of individuals who live in higher-income countries have been vaccinated with at least one of two vaccination dosages whereas 1% of individuals who live in lower-income countries have received one of two vaccinations.

National Lockdowns

In Southeast Asia, as cases have risen due to the delta variant beginning in July 2021, strict lockdown restrictions have become reimplemented. The implementation of lockdowns worldwide in 2020 was common as countries felt this would be an effective way to quickly decrease the number of people who contracted COVID-19. Lockdowns were extremely effective in decreasing the spread of COVID-19; however, they also caused a negative effect on the global economy. In Asia, lockdowns caused a severe drop in retail sales. For example, vehicle sales in China have been steadily decreasing each month; more recently, they decreased by 11.9% in July 2021. Factories have also stopped production as a response to the surge of cases since July 2021. Southeast Asian countries have also had to enter lockdowns again. This has caused the negative effects of COVID-19 on Asia’s economy to resurface, with yet another decrease in retail sales.

The Delta Variant

The COVID-19 delta variant is more infectious than the original COVID-19 strain, causing a spike in cases for Southeast Asian countries that began in July 2021. The delta variant of COVID-19 has caused both a surge in COVID-19 cases worldwide and a resurgence of the 2020 economic downturn that came with the very beginning of the COVID-19 pandemic. The effects of Southeast Asia’s low rates of vaccination have caused a spike in COVID-19 cases in addition to the delta variant, factoring into the reasoning behind the reimplementation of national lockdown measures.

Looking Ahead

A large and overarching goal of Asia in its entirety is to increase rates of vaccination in each Asian country as a response to this economic decline. The World Health Organization’s (WHO) regional director of Southeast Asia, Dr. Poonam Khetraapal Singh, has a goal to have the Southeast Asian population 40% fully vaccinated by 2021. This strategy against economic disparity uses the COVAX initiative, a plan that WHO put in place that advocates for global access to COVID-19 vaccines. The COVAX initiative especially targets low-income countries and works to help them gain equitable access to not only vaccines but also to COVID-19 testing and treatments.

If Asia successfully increases its vaccination rates, there is hope that the Asian economies will be able to continue with their goals of economic growth.

– Francesca Giuliano
Photo: Unsplash

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The Malbec Miracle: Wine Defeats Depression

The Malbec MiracleIn the early 1900s, Argentina was a rising star. The country had an excellent climate, cheap land, and a strategic location for trade. Soon enough, Argentina had one of the fastest-growing economies in the world. People expected skyscrapers and cities to replace rural land. This, however, did not come to pass. Argentina’s economic growth suddenly faded, and poverty rates grew. From 1975 to 1990, Argentina suffered from military dictators and constant political conflict. It seemed to be over for the rising star. Then, in a small province called Mendoza, the Malbec miracle changed everything.

A Turn of the Century Depression

The wine, as a commodity, was not new to Argentina. In fact, the country’s wine industry was a large reason for its economic success in the early 1900s. Introduced by European settlers, Argentina’s temperate climate was perfect for growing wine. Argentina also does not have a large presence of Phylloxera, an insect that destroys vineyards. The province of Mendoza, with its high altitude and intense sunlight, is particularly suitable for growing wine. Unfortunately, Argentina’s wine industry fell along with its overall economy during a major recession from 1998 to 2002. This was due to a dependence on domestic demand.

Around 90% of the wine produced in Argentina was consumed locally. When poverty started to increase, people could no longer buy wine. Argentina’s economy hit record lows in the late 1980s. And, the grape variety called Malbec was unknown and dismissed by many as a “poor-mans grape.” It was clear that Argentina needed a miracle.

Economic Success

Argentines could not grow the Malbec grape. It was very susceptible to parasites and needed high elevation and perfect weather for cultivation. Most of the world had forgotten about the grape. But, Mendoza’s high elevation and parasite free environment made it perfect to grow Malbec. Improvements in technology and growing methods made the Malbec into fine wine. In the 1990s, Argentina started to focus on exporting its wine. This proved to be a tremendous success, with fine wine exports increasing from $7.5 million in 1990 to $120 million in 2001. Since most of the wine exported was Malbec, the once-forgotten grape proved instrumental in Argentina’s economic recovery.

Argentina Today

The Malbec miracle had impacts far beyond the wine industry. Argentina now had a reputation for producing fine wine. This opened the doors for foreign investment and tourism. People all over the world wanted to visit Mendoza. With this new identity, as the world’s premier country for Malbec wine, Argentina’s economy continued to grow despite numerous setbacks including the 1998-2002 Great Depression. Upon Argentina’s economic recovery, the poverty rate decreased dramatically from 44% in 2002 to 16% in 2007.

The strong wine industry continued to create jobs and ensure global interest in the country. Now, Argentina is the fifth-largest wine producer in the world. The country also maintains its title as the Malbec grape producer, growing more than 75% of all Malbec in the world. This success can be largely attributed to Mendoza, which produces about 80% of Argentina’s wine.

Looking Forward

The Malbec miracle has completely revitalized Argentina’s image throughout the world. Mendoza’s economic success has largely reduced poverty for everyone in the country. Although Argentina is no longer the star many thought it would be, dramatic events like the Malbec miracle have changed things for the better. Argentina now has a significant place in the global market, with its wine industry leading the way. Mendoza remains the gold standard for Malbec wine, with the once-forgotten “poor man’s grape” having become the miracle that made Argentina into what it is today.

– Evan Weber
Photo: Flickr