The Eurozone area is expected to contract by 7.9% this year as Asia will see its first economic decline since the 1960s. Thailand is emerging as one of the biggest economic casualties of this Covid 19 virus with its borders still shut out of fear of a second wave. Yet, Sweden, which never imposed a lockdown, is now lifting restrictions and access to the country including tourists from Thailand as the virus is under control and declining as a threat.
Thai ministers, this week, agreed on handouts for tens of millions of poor people struggling in the kingdom as the economy is on track to be among the hardest-hit countries in the world by this virus pandemic. It comes with news that the US economy is rebounding sharply while European countries, which took prolonged and strengthened lockdown measures such as Thailand, are also now set to pay the price. However, one controversial question will not go away despite a shy international media and sceptics who find it difficult to face up to the fact that governments can commit errors and grave blunders even in unison. The question is Sweden, the country that pursued a light-handed approach to the Covid 19 virus trusting its population and which is now open for business with falling daily virus infections and a substantially less impaired economy.
Thailand announced a range of stimulus measures this week specifically targeted at the less well off as the government foresees the Covid 19 crisis in the kingdom continuing for some time to come.
The initiatives were agreed by the Centre for Economic Situation Administration meeting on Wednesday chaired by the Prime Minister, Prayuth Chan ocha.
After the meeting, the PM indicated that the government, at this point, could not predict when the virus crisis would end.
Thai government targets assistance to the ‘grassroots’ and those most in need as the virus has severely damaged the economy
General Praytut said that the key priority of his government now was to focus financial aid and support on the less well off and what government ministers have begun to distinguish as the ‘grassroots’ of the Thai economy.
The stimulus package is in addition to wider measures aimed at maintaining the stability of Thailand’s financial and property markets. It comes in two parts with a total budget of ฿51 billion.
The first initiative, targets 10 million people, many of them unemployed, with ฿3,000 per month payouts which will be paid for the period for October to December 2020.
Those wishing to avail of the offer must meet eligibility criteria and register to apply online.
New handout scheme to benefit small business concerns with restrictions on how the money is spent
The scheme is particularly tailored to benefit small Thai business concerns in that those availing of the offer will be limited to spending ฿100 per day which must be spent at small business concerns such as food stalls and vendors excluding large convenience chains and business undertakings. The size of this initiative will be ฿30 billion.
The second initiative is aimed at current social welfare cardholders in Thailand and will boost their monthly payments over the period from ฿1,000 per month to ฿1,500.
The total cost of this package will be ฿21 billion.
Government trying to keep economic contraction below 7.5% but forecasts suggest higher than 10%
Thailand is now emerging as one of the countries in the world to be hardest hit by this virus pandemic.
The government is trying to rein in the expected GDP contraction in the kingdom this year to 7.5% but many economic forecasters are predicting that with no prospect of a return to substantial foreign tourism earnings, declining exports and a challenging domestic economy that has only succeeded in achieving a fragile reopening from the complete April shutdown, the kingdom’s economic contraction will be north of 10%.
Asia’s worst economic performance since the 1960s
It is coming with the Asian economy expected to post its first year of economic contraction since the 1960s with only China and Vietnam, Thailand’s main competitors, showing any prospect of growth.
The data from those two countries, according to many respected sources, is open to question, particularly regarding China.
For a long time, economic observers have raised strong concerns over the reliability of Chinese GDP data with published evidence of falsified figures and other distortions in the last two decades.
The clear lack of candour this year relating to the origin of the virus and information on infections at the beginning of the year, has raised strong concerns over any information emanating from Chinese sources.
Similarly, with Vietnam, which in 2019 revised its GDP figures under controversial circumstances. The country raised its GDP calculations for the period 2011 to 2017 up by over 25%, a move which raised eyebrows.
Both China and Vietnam are controlled by respective national communist parties and are effectively one-party states without democracy and democratic oversight.
Thailand in the same boat as the UK, France and Italy, economically at least with sharp losses
Thailand finds itself with a similar level of economic contraction to countries such as the UK, Italy and France which are all predicted to contract by between 9.5% to 10.5% by the OECD (Organisation for Economic Cooperation and Development) for 2020. The European Union’s Eurozone area is expected to contract by 7.9%.
Thailand’s response to the virus, however, has been in some respects, more extreme with a complete ban on incoming passenger flights since April which has annihilated the kingdom’s strategically important foreign tourist sector.
The kingdom’s medical and Covid 19 virus experts continue to warn the Thai government strongly that any reopening of the kingdom, even on limited terms, will expose it to a second wave of the virus.
This position is being supported by a growing surge of Covid 19 infections in the last few weeks across Europe and other parts of the world.
Sweden is a nagging question for all Covid 19 national policy advisors, the question is growing louder
However, an issue of increasing importance and one that can no longer be overlooked is what has happened or is happening in Sweden and the controversial back to work emphasis in the United States, where President Trump has insisted in a quicker and more decisive return to work while maintaining federal support and stimulus.
This has seen a surprising rebound in the US economy which is now only expected to contract by 3.7% in 2020 with record levels of job additions as the American economy has powered back to life according to the most recent Fed reports.
However, it is the situation in Sweden which will disturb most government advisors in countries such as Thailand and Europe.
Sweden did not lock down its economy. Its bars, offices and workplaces stayed open.
Swedish authorities did make a grave error concerning the treatment of patients in nursing homes causing a sharp rise in mortality as in other countries.
Sweden’s death rate from the virus is multiple times that of its nordic neighbours with 5,865 dead but, however, it is quite similar to the rate seen in Italy, France and the UK.
The kingdom, with a population of just over 10 million, is now enjoying a new sense of confidence with no mask-wearing requirements and a reducing level of new infections on a daily basis which is occurring naturally.
The kingdom reached a peak at the end of June with death rates in single digits since mid-July.
Sweden has eased restrictions on travel, passengers with visas can now fly freely from Thailand
In July, Sweden eased a ban on entry to the kingdom for European Union passengers allowing open access again for travellers from the Schengen area and other European Union citizens.
The Scandinavian country also allows open access to 14 non-European countries including Thailand with the appropriate visa.
This has led to many Europeans, in recent weeks, visiting Sweden for holidays to enjoy the open, pre-pandemic atmosphere that the country now exclusively offers which has disappeared in Covid restricted areas across the European Union and the wider world.
Scientists believe falling infections in Sweden are a by-product of the human response to the virus threat and linked to herd immunity
Swedish scientists and officials are now suggesting that the falling rates of coronavirus detection in the country is linked to some aspects of the human response to the virus, in effect creating herd immunity.
While most officials are ambiguous and wary of sounding triumphal, they do also suggest that the country’s curious response of offering guidance to its responsible population while allowing the virus to transmit and take its course among healthy Swedes, has led to the current situation.
France, UK suffering a spiral of infection with new restrictions while the virus declines in Sweden with no lockdown and where masks are uncommon
The situation now occurs that while France, which imposed a stringent lockdown, is suffering a rising second wave of the virus with mandatory face mask wearing and talk of further restrictive measures, driven by fear, such as are also being seen in the UK, Sweden has the virus under control.
Sweden has no such restrictions and the population is going about its normal business albeit in a more circumspect manner.
In addition, despite suffering an economic hit as in all other European countries because of a slowdown of economic activity locally, regionally and across the world because of the virus, Sweden’s economy is also predicted to be less negatively impacted.
The currently projected GDP contraction for the Nordic kingdom is under 5% as Sweden’s economy grew marginally in the first quarter of the year.
Response advocated by conservative medical experts will, at some point, have to be questioned in hindsight
‘Sweden is doing fine,’ Arne Elofsson, a professor in biometrics at Stockholm University, said. ‘Strict rules do not work as people seem to break them.’
Sooner or most probably later, the reaction of each national government to this crisis will have to be examined objectively and questioned.
The severe impact caused by the decisions and the threat of further virus events will make this critically important. We already have some clear sense that the response, worldwide, represents a catastrophic failure of public administration.
It does look increasingly like the heavy-handed response advocated by top medics in Europe and Thailand will have to be, at the very least, questioned.