The start of any year brings a line-up of predictions from governments, corporations, consultants, and stargazers across the entire business landscape and 2022 is no exception. No crystal ball is required to discern that Covid-19’s market and social impact continues to hold centre stage making it all déjà vu, but unlike this time last year, across the Asia Pacific, there are many interesting signs and indications of tremendous positive momentum.
Although Covid brought significant opportunities and according to a report by the Asia Pacific Foundation of Canada, supply limitations that hampered early vaccine rollouts throughout much of the Asia Pacific has fuelled a biotech surge in the region. Of the eight COVID-19 vaccines the World Health Organization (WHO) has approved, remarkably four are produced in Asia. In parallel, investment by the major pharma players to expand their capacity has skyrocketed with new manufacturing facilities coming online in Vietnam, Korea, India, and Singapore. Small players have had their share of the pie too producing everything from rubber gloves to face masks, ventilators and now Rapid Antigen Test kits, which are in huge demand for the convenience and peace of mind they bring to everyone.
In the battle for new normality, the vaccination rate has become a deciding factor in national behaviour. Singapore’s stunning success in vaccinating 88% of the population is key to the early opening of the country’s borders for international trade which is critical in this small island city-state. At the same time, the almost 5 million resident population is being educated on how to live with Covid as they move from pandemic to endemic – shifting a hitherto over-reliance on Doctors to a self-care approach to get well at home and free up the medical system for real patients in need. In the West, some countries have begun removing Covid-19 restrictions, and it will certainly be interesting to see how the dominoes fall by March 2022.
This contrasts starkly with China which maintains zero-tolerance to Covid, locking down entire cities in response to just a handful of cases (an approach that Australia and New Zealand took from the earliest days of the pandemic only to be overwhelmed by the virulence of the new Omicron variant). Already grappling with some concerns of an over-heated market, it is anticipated that 2022 will see China focus internally on innovation and drive the uptake in IoT and supply chain digitisation. China’s dramatic recovery last year was fuelled to a large extent by the massive global consumption of a locked-down world where people worked, relaxed, renovated, and kept themselves entertained and fit at home. Today, this manufacturing surge has been curtailed by the well-publicised shortage of micro-chips impacting everyone from mobile phone and white goods manufacturers to cars and infrastructure.
In South East Asia, Malaysia is expected to shine in 2022; outperforming the rest of SEA with a 6% GDP driven by consumer demand and more than $90 Billion in fiscal stimulus packages. Meanwhile in South Asia, India is rising as a star performer in the region. Fuelled by consumption, the Reserve Bank of India is expecting an exceptional 9.5% growth for 2021-22 with a consensus forecast of around 7.5% for 2022-23.
In spite of the pandemic, 2022 will see fluidity in employment trends as governments, companies, and people battle through the hybrid or flexible working model, and establish structures and systems for the long run as we are now well beyond the initial Covid stop-gap measures. The pandemic demonstrated the over-dependency of some sectors on low-cost domestic and overseas migrant workers. The reverse migration away from urban centres as people return to their rural hometowns, is now creating labour shortages of up to 25 percent in some cities across Asia Pacific.
While this could bring growth to rural areas, in Malaysia and Singapore the manufacturing and hospitality sectors are finding alternative solutions to the pandemic’s migrant labour shortage by investing in automation, artificial intelligence and supply chain digitisation.
Another wave of change will be the regional transition to clean energy. The stark report from the International Panel on Climate Change (IPCC) preceding the COP-26 climate conference last year brought exciting commitments from various countries across the globe. While national responses, policy statements and commitments are still being formulated, we anticipate a strong shift to renewables with China making a strong statement on its cessation of coal-powered projects and future financing.
In summary, 2022 shines a beacon of opportunity across the entire region. Policies and initiatives will be rolled out in response to the climate challenge, technology adoption and digitisation are accelerating to solve manpower, supply chain and productivity issues and in this Tiger Year and all supported by and entire globe coming together to develop, manufacture and distribute life-saving vaccines that will ultimately be the deciding factor in national and individual behaviour.