PHATTHALUNG: As authorities in China, South Korea and Italy battle virulent outbreaks of the Convid 19 virus, China is faced with a thorny dilemma. Keep the economy locked down or risk the virus getting out of control. The economic impact is now spreading across the world and threatens a global recession.
Thailand’s Minister for Tourism and Sports has echoed US President Donald Trump by predicting that the Convid 19 coronavirus outbreak may ultimately be brought to an end by rising temperatures which will help kill off the infection in many countries including Thailand. The minister praised the Thai healthcare system for its handling of the outbreak and predicted that tourism in the kingdom will spring back to life in the second half of the year when the crisis is overcome.
Thailand’s Tourism Minister Phiphat Ratchakitprakarn on Sunday struck an optimistic note in relation to the current coronavirus epidemic Convid 19.
Phiphat Ratchakitprakan, whose frank assessment last week that Thai tourism could be down by 50% in the first half of the year was seen a refreshing departure, said that there was good reason to believe that after the Songkran holiday festival which ends in mid-April, the crisis may ease.
One was that China, which is bringing the outbreak under control at a massive economic cost, is in the process of procuring a vaccine against the virus. The second was that rising temperatures and heat will kill off the viral infection in many countries including Thailand.
Thai minister’s comments chime with US President’s
On this basis, the minister expected to see the crisis subside. His comments are very similar to those expressed by US President Donald Trump last week who confidently predicted that the virus will disappear with warmer weather.
The minister made his comments while presenting awards to sports volunteers at a hotel in Khuan Khanun situated in Phatthalung province in southern Thailand.
Aid package on the way and a second-half recovery for the embattled tourism sector promised
The minister also promised that the government was preparing a financial aid package for the tourist sector aimed at hotels and restaurants.
Mr Phiphat predicted a rebound in Thailand’s tourism prospects in the second half of the year.
He told his audience that Thailand’s tourism sector was a valuable engine for the Thai economy. Last year was a record year that saw nearly 39 million visitors. He said that at the outset of this year, Thailand had been hoping to set another record year.
Value or Thailand’s tourist sector as part of the overall economy between 11 and 12% based on data
There have been persistent claims about the value of the Thai tourism sector to the overall economy with the government often mentioning figures of up to 20%.
However, last week, it was reported that during the February 5th meeting of the Bank of Thailand’s Monetary Policy Committee that Bank of Thailand director Don Nakpornthab suggested that tourism only contributed 11% of Thailand’s calculated GDP.
In 2019, it is reported that income generated by tourism into Thailand stood at ฿1.93 trillion. The most recent estimated value of Thailand’s economy or GDP for 2019 as per the International Monetary Fund was ฿16.4 trillion. This would equate to 11.76% of GDP.
Tourism minister praises Public Health Ministry saying it has helped boost confidence among tourists
The minister highlighted the ability of Thailand to manage this crisis and acknowledged that the country’s health system had been recognised for its ability to contain the outbreak within the kingdom.
Minister Phiphat said that this would help to bolster confidence among tourists travelling to Thailand or considering the country as a destination.
‘Although the virus has caused damage to the tourism industry in the first half of the year, I am confident the situation will return to normal in the second half or after the Songkran Festival when China will likely produce a vaccine against it,’ he predicted.
Public more concerned about the economy, smog and violence than they are about the coronavirus
It appears that the Thai public also shares the minister’s confidence in the health service and the threat from the virus.
On a daily basis in the last week, the Public Health Ministry has assured the public in Thailand that the virus threat is under control with 35 detections, 21 of whom have already made a full recovery.
The minster comments came on the same day as a Suan Dusit opinion poll published by the Bangkok Post and linked with Suan Dusit Rajabhat University showed that Thai people have a lot of other things that they are more concerned about.
While 51% of people were worried about the coronavirus, nearly 61% were more worried about smog or particulate matter in the air.
The survey also shows that nearly 64% of Thai people were concerned about violence and day to day living expenses while holding a dim view of the government’s economic performance.
Unprecedented epidemic with growing infections now outside China in South Korea and Italy
On Sunday, the latest figure for infections rose to 79,000 with nearly 2,500 deaths. The number of cases outside of China is now the key concern having risen to nearly 1,850 with alarming outbreaks in South Korea and Italy leading to populated areas being locked down. The situation is unprecedented.
Fears of delayed impact on the world economy
There are also growing concerns about the impact of the Convid 19 coronavirus on the world economy. A key shipping index, the Baltic Dry Index, this week recorded a low not seen since 2016 and still in free fall.
The extended closure in China is starting to spook analysts and investors throughout the world whose first instincts and wish had been to hold the line in recent weeks.
A leading consultancy in London, Capital Economics, attributed the slump in shipping to the virus. ‘Given that China accounts for about 40% of global seaborne trade, it is not so surprising that freight rates have tanked.’
The virus contagion is threatening a global recession. Singapore, this week, flagged a sharp fall-off in economic activity and the danger of that dynamic economy falling into recession.
Singapore’s Prime Minister Lee Hsien Loong said on Friday that the city state’s economy would now contract by 0.5% for this quarter and that a recession was possible.
The situation worldwide is now at an economic tipping point with New Zealand also last week warning that its economy has been severely impacted.
Key pundit and economics writer warns that Chinese authorities are facing a dangerous dilemma
A leading economic and business commentator who writes for the Daily Telegraph in London, Ambrose Evans-Pritchard, has been among the first to warn about the sheer scale of the economic impact of this virus.
Mr Pritchard has been pointing to the thorny dilemma facing Chinese authorities trying to control the outbreak while also becoming increasingly aware that the economic cost is reaching a point where they may no longer be able to control or manage the markets.
Economic contagion spreading across the world
Many economic analysts and investors are trying to be sanguine about what is now verging on a pandemic expecting that China can somehow bring the situation under control. However, the economic effect of the shutdown, still in effect in many parts of China, must eventually make its way around the world and take its toll.
Perhaps Thailand’s Minister for Tourism and the US President are correct and the rise in temperatures will see mother nature come to the rescue and at least limit the impact of this continuing disaster.