The federal government should work with Asia to rebuild the global economy and embrace international opportunities presented by the coronavirus pandemic, according to the Australian National University’s Asian Bureau of Economic Research.
The bureau’s new Asian Strategy for Recovery and Reconstruction after COVID-19 urges the Australian government, along with the Association of Southeast Asian Nations (ASEAN), China, Japan, South Korea, India, and New Zealand, to “proactively coordinate financial, trade, public health and food security policies to avoid prolonged economic stagnation and international disruption from the COVID-19 pandemic”.
“The weight and potential of Asian economies will be central to global economic recovery from the COVID-19 crisis,” the report states.
Among numerous international experts, the report’s contributors include former federal government secretaries Gordon de Brouwer and Heather Smith.
They argue that working with Asia “will help avoid unintended international consequences of nationally driven policy responses and a deeper and prolonged downturn”, while regional and multilateral frameworks will “increase capacity to contribute constructively to regional and global recovery”.
The strategy proposes six actions, including for central banks and finance ministries to expand bilateral currency swap arrangements “to address looming financial problems”, and for governments to support the development, production and fair distribution in Asia of COVID-19 diagnostic tests, a vaccine and treatments.
The Asian Bureau of Economic Research notes that the pandemic has accelerated digital transformation in health management, and has called on nations to embrace it.
“Asia can initiate a proactive agenda for collective governance of digital infrastructure that includes regulatory coherence, privacy standards and data sharing. This is now essential to new work practices, new production modes, supply chain management and delivery of goods and services, including government services,” the strategy says.
“Digital transformation also offers an opportunity to revamp the provision of government services. Collective action in Asia will be critical if governments wish to take advantage of and imbue collective trust in the changes that have already been unleashed.”
Governments must also keep medical and food markets open, and should lead the development of protocols for people movement to “fast track the resumption of international commerce, travel for study, scientific exchange, temporary labour movement, and tourism”.
The final action is to “conclude the RCEP [Regional Comprehensive Economic Partnership] agreement immediately to ensure regional trade solidarity”.
Australia in November signed onto the RCEP — the world’s largest free trade agreement. The report argues that the initial conclusion of RCEP will “send a global signal, ensure food security, vastly improve energy security and keep markets open in East Asia”.
In light of India pulling out of the agreement over fears its market would be flooded by Chinese imports, the report states the RCEP group must keep a path open for “eventual Indian membership”, and should “promote cooperation with South Asia in the global effort to fight the pandemic and contain its economic impact”.
The report notes that COVID-19 has further strained the rocky relationship between the United States and China, which could pose a problem for global economic recovery.
“Because both countries are so big economically and each is a leader in digital technology and innovation, both the United States and China must play a key role in Asia’s contribution to global economic recovery, repair and revival. The prospects for the global economy will be brighter if Asia’s contribution is harnessed in a way that helps to facilitate US–China cooperation,” it says.