lee47_Photo by Kevin FrayerGetty Images_covid tracing Kevin Frayer/Getty Images

The Perils of Big COVID Government in Asia

During a large and complex crisis like the COVID-19 pandemic, government’s role naturally grows – and so do the risks of unproductive spending and abuses of power. That is why, as Asian economies seek to contain COVID-19 and its economic impacts, they must also contain their own governments.

SEOUL – Asia is home to many exemplars of small but effective government, countries where sound policies and strong institutions underpin economic stability and robust growth. But during the COVID-19 crisis, many are pursuing expansive macroeconomic interventions and implementing measures that infringe on privacy. They are perched on the edge of a slippery slope.

To be sure, extraordinary times call for extraordinary measures. The COVID-19 pandemic has led to the deepest global recession since World War II, with the International Monetary Fund predicting a 5% economic contraction in 2020 and a slow recovery after that. An “L-shaped” depression is a very real possibility.

Asia is no exception. While the Asian Development Bank expects China to achieve positive GDP growth, it predicts that India’s economy will shrink by 9%. Developing Asia’s GDP will fall by 0.7% – the region’s first contraction since WWII.

We hope you're enjoying Project Syndicate.

To continue reading and receive unfettered access to all content, subscribe now.



Unlock additional commentaries for FREE by registering.