Long term economic recovery, vaccination comparatives by country

The recent spike in COVID-cases should not make us lose focus on long run policy issues. It is heartening to find that the CREATE Law (which amended the corporate tax and fiscal investment incentives) has finally been signed by the President.

There are also pending reform bills addressed toward long term goals, but they still on hold in the Senate. The all-important issue to amend the restrictive provisions in the Constitution is very critical to long term recovery. This is pending in both chambers of Congress.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). And then, there is the CTTPP, an agreement that got concluded without the Philippines taking part in it. It is fortunate that the Department of Trade and Industry, under Secretary Ramon Lopez is exploring the possibility of joining TPP.

CPTPP is a multilateral free trade agreement among 11 countries in the Asia Pacific region: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The agreement was formerly called TPP (simply for Trans-Pacific Partnership), a trade agreement, promoted by the US to expand trade in the wide region. When Donald Trump got elected as US president, the US withdrew from the TPP to pursue a different trade policy. The remaining member nations decided to continue with the agreement and renamed it CPTPP.

Today, the prospects for the US immediately rejoining this agreement, with Trump gone from the scene, are still remote. However, political developments will determine what directions the new US President, Joseph Biden, will take after the US the mid-term elections next year.

The CTPP is likely to be a viable new force in multilateral trade in the Pacific and Asia region. The United Kingdom, in search of new international trading partners after its withdrawal from the European Union, has recently applied for admission into it. The prospects for CTPP to enlarge to include other bigger ASEAN countries like Indonesia and Thailand are also likely to improve.

Long term Philippine recovery and expanded trade. The country’s long term economic recovery depends on how the country can expand its trading base with the world. This has been the East Asian way for most of the countries in the region, including among the ASEAN partner nations.

This is also the reason why many of the reform bills that are pending in the legislature need to pass so that the country may benefit from its participation in major multilateral trade arrangements.

The gains from our membership in ASEAN would be bigger if all the industries located within our national boundaries – whether owned by our nationals or by foreign investors – are highly competitive and are trade-oriented.

Recently, we also signed a big trade agreement, with China involved as a member. This is the RCEP (Regional Comprehensive Economic Partnership).

To maximize our economic gains from these agreements, the country must be given the power to acquire the economic tools to make industries within our borders to be very competitive.

COVID-19 continues to challenge. A disheartening feature in recent days has been the continued rise of new cases of COVID. Consequently, this will likely bring a higher toll in lives lost and in economic pain for many, and hazard to economic recovery.

The rise in new cases has forced a return to the community lockdown in Manila and its immediate environs.

This issue raises the importance of vaccination as a main route toward acquiring immunity from the pandemic. Unfortunately, in this effort, our performance so far is far below speed.

International data on vaccination program. The New York Times has a website that tracks the worldwide vaccination programs around the world, using data maintained by Oxford University.

Against this information, we get a good perspective of where we are.

A major conclusion from the data so far is that 85 percent of vaccine shots administered in the world have helped mainly the high- and upper-middle-income countries. Only 0.1 percent of doses have been used in low-income countries.

Among all the countries today, Israel leads and has so far vaccinated 59 percent of the population. In Europe, the United Kingdom has vaccinated 37 percent of its population. The European Union countries lag behind, many of them, including Germany, having done only 12 percent of the population.

The United States has reached 31 percent of the population through vaccination. In South America, Chile leads, having vaccinated 37 percent of its population. The bigger countries lag behind, but are on the way toward more vaccination. Brazil and Mexico have vaccinated 7.8 percent and 6.3 percent of their population, respectively.

In Asia, the two giant countries, China and India, lead in vaccination. China has vaccinated nine percent of the population and India 4.9 percent.

Some Asian countries that have performed well against the pandemic – Thailand, Vietnam, and Japan – have not been in a hurry. They may choose not to hurry since they have succeeded in protecting their population with other containment measures.

Phl vaccination and the battle against the pandemic. Against these vaccination data, we can compare our performance, which is rather poor in this regard. As shown last week, we are among the worst hit by the pandemic in ASEAN.

But in terms of vaccination, we have not even vaccinated one percent of our population of 109 million. The Philippines is listed at 0.7 percent vaccination rate.

In comparison, Indonesia, with a population of 273 million, has vaccinated 3.1 percent of its people. At this rate, they have inoculated much more than we have done.

The rate of vaccination cannot go far unless the supply of needed vaccines can be secured. The problem in this context is that the supply of vaccines is very tight because future production has been promised to countries with existing orders, and we did not contract for supplies soon enough.

The needed mass of vaccine supplies is likely to arrive with a wait of a few more months, perhaps up to another four to six more months. That’s how far our access to large, ordered vaccine supplies is.

Thus, we are likely to face a difficult period of waiting. In the meantime, we continue to face a virulent, invisible adversary.

For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/