SEA's eases strict COVID-19 lockdown as economic issues ripple through supply chain

Media reports say that prolonged restrictions in Southeast Asian countries have taken a toll on their economies due to the Delta variant-fueled COVID-19 outbreak.

Governments have begun reopening their economies despite the surge of COVID-19 cases and lack of containment, largely blamed on the slow vaccine roll-out. The region had quickly overtaken other parts of the world to become the worst-hit area, leading local governments to consider easing said restrictions due to the economic downturn.

With the majority of the world's production hubs based in Southeast Asia, for instance, global brands had recently announced production caps due to the lockdowns. For instance, Toyota had scaled back its car manufacturing, while apparel brand Abercrombie & Fitch had called the current situation out of control.

Due to the slow vaccine rollout, the Southeast Asian governments grew increasingly worried as the restrictions failed to effectively stem rising cases, and continued to worsen the economy. Malaysia had pessimistic outlooks for its 2021 growth forecast, expecting to see cuts of 3% to 4%, while the short-lived growth in the tourism sector in Thailand saw a fast burnout.

Vietnam's lockdown restrictions have posed the most risk, as the country's stricter lockdowns have hindered manufacturing and export companies from exporting goods overseas, further impacting the supply chain. The country's trade government agency had warned this month that the continued closure of their factories would ultimately lead to losing their overseas clients. At least 18% of members have redirected portions of production to other countries, reported Vietnam's European trade representative office EuroCham.