Resurrection

By now, netizens have become inured to the overflowing stream of opinions, views, commentaries, critiques, etc. of every aspect of the pandemic and its management. Unsurprisingly, it is a worldwide phenomenon, as no other topic commands center stage together with its mixed messages, confusing prescriptions, varied outcomes, politics and mutations. Surely, for the foreseeable future, there will be more rending of garments and gnashing of teeth, as it were, since public discourse regarding masks or no masks, lockdowns or no lockdowns, health priorities vs. economic ones, vaccination or not, ivermectin or not, proceeds unabated.

But looking ahead, the question is: After wandering in nearly one and a half years of this pandemic desert with its severe restrictions and social, familial, livelihood, educational, physical, and spiritual distancing, is salvation at hand? Whence cometh the economic resurrection?

The consensus among authoritative international sources such as the Conference Board (New York) is that for most of the world, it starts later this year, led primarily by the United States and the Emerging Market economies. Vaccine rollout is a key variable in restoring normality. The United States has gone all out with its vaccination program and, interestingly, Asian economies as a whole appear to have more successfully brought the pandemic under control than European ones. Thus, after a 4 percent decrease in its GDP in 2020, the United States is forecast to realize a 5.5 percent increase this year, aided as well by massive infusions of funds starting with an additional $1.9 trillion COVID-19 relief package, bringing the total of its relief packages to almost $6 trillion!

More massive spending is currently being proposed, but whether such a spectacular eruption of money printing will lead to inflation and serious economic malady is a subject for another treatise.

The Emerging Markets advance is expected to be led by China, India, and “Other Emerging Asian Economies” (Singapore, Malaysia, Thailand, etc). Following an anemic 1.4 percent GDP growth in 2020, China is forecast to achieve a 5 percent growth this year. India’s economy is forecast to leap from a negative 7.1 percent GDP growth rate in 2020 to a whopping positive 12 percent one in 2021. Other Emerging Asian Economies are expected to rise from a negative 3 percent growth rate in 2020 to a positive 5 percent in 2021.

What about the Philippines? Sadly, it remains a laggard in Asean. According to the Center for Strategic and International Studies, “The Philippines is second only to Indonesia for the most officially reported COVID-19 cases in Southeast Asia.” And at about 15,000 cases reported in March, the Philippines had nearly three times the number of reported cases than Indonesia over the past month. Vietnam had just 17, Myanmar 32, and Thailand 58. Read that and weep!

Even the President had publicly declared his forecast that a “turnaround” won’t happen till 2023, and the World Bank seems to agree. And why not? The beleaguered Philippine economy staggered along with a negative 9 percent GDP rate for 2020, and while optimistic forecasts hope for a 6.5 percent growth this year, the emergence of new COVID-19 variants and the resulting lockdown threaten to cut that in half. That would mean that 2021 GDP growth would barely recover half of the GDP losses realized in 2020. This would in turn pose a greater challenge to our economic managers to achieve a vigorous enough growth in 2022 to build the necessary platform for a turnaround in 2023.

It doesn’t help that the pandemic management appears characterized by the more deplorable aspects of leadership by committee, particularly if it is one that seems to alternate between indecision and incoherence. Since vaccinations have recently commenced at the local government levels, the time has come for the administration to proceed posthaste from this still tepid beginning and focus on accelerating the pace of vaccinations while simultaneously escalating the tempo of opening up the economy commensurately, lest a prolonged downturn develops into a political Achilles heel.

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Roberto F. de Ocampo, OBE, is a former finance secretary and was Finance Minister of the Year in 1995, 1996, and 1997.

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