On March 5, AustCham Korea and the Kiwi Chamber held a free webinar to update members and friends on the current situation surrounding COVID-19, its effects, and the economic outlook for Korea and the wider region.
Dr. William Shin gave an informative overview of the medical situation, emphasising that information and statistics are constantly changing and it is therefore important to keep up-to-date with the developments. He stressed the necessity of personal hygiene to protect oneself from contracting COVID-19; regular hand washing, use of hand sanitiser with 60% alcohol content and avoiding touching one’s face, mouth and eyes.
At the time of the webinar, Dr. Shin stated that there had been 83 countries with confirmed coronavirus cases. As COVID-19 continues to spread around the world it is likely to be very hard to contain the outbreak, but that many researchers are working hard on a vaccine.
Dr. Shin explained that virus outbreaks can take a toll of mental health, with risk factors including information overload and the spread of fake news, loneliness from social distancing, plans affected by travel bans or other restrictions, or stigmatization of the infected. He recommended organisations ensure careful information management, on-site counselling, and communication with stakeholders.
Among the measures recommended for businesses to protect themselves, it is important to identify key functions and the individuals required to support those functions, while minimizing health risks and putting plans in place should employees need to take leave of absence for quarantine or caregiving. Exploring options to split teams and work in alternative locations, and ensuring a robust travel policy were other measures recommended by Dr. Shin.
Khoon Goh, Head of Asia Research for ANZ, focused on the economic impact of COVID-19 for South Korea. He noted that after the outbreak in Wuhan, China had seen significant success in containment of the virus. Wuhan were seeing an approx. 150 cases/day rate of increase while rest of China had seen a decrease in new cases and deaths, allowing overall restrictions to ease and businesses to resume operation. Goh emphasised that, as the cases were now confirmed across several other countries, COVID-19 was no longer a “China problem”, but one that would begin to have a global economic impact.
Goh gave four examples of the main ways economies would be affected by COVID-19; the impact of significantly reduced tourist numbers from China, reduced trade activity from China, epidemic responses (closure of schools and businesses, travel restrictions), and the indirect impact from loss of consumer confidence and supply chain issues.
In comparison to the MERS outbreak of 2015, Goh stated that the loss in Chinese tourism to Korea will likely take a longer time to recover; equivalent to the effect had by the ban on Chinese tour groups in 2016. The already significant effect on trade with China has lead to a slump in business confidence. With Daegu recording the majority of COVID-19 cases in South Korea, the impact on its usual 3% contribution to GDP will see a flow on for main industries as the city is locked down to contain the virus.
At the time of the webinar, Goh predicted a fiscal deficit of 1.4% for South Korea, with a stimulus package predicted to mitigate this by 0.2%. The Bank of Korea had not yet cut rates, but may need as other countries around the world continued to do so. He emphasised that countries would need to come together to coordinate their fiscal response, with greater measures required for the longer it takes to contain the virus.
ANZCCJ would like to thank AustCham Korea and the Kiwi Chamber for sharing access to this informative webinar.