Update Country Report Maldives 19 May 2020

Event

In the week beginning May 11th, 12 countries in Asia recorded a larger increase in new coronavirus (Covid-19) cases than in the previous seven days, down from 15 countries the previous week. The countries which saw the largest increases in infections were India, Bangladesh, Indonesia and Afghanistan.

Analysis

China continues to battle the emergence of new clusters ahead of the annual legislative sessions due to begin on May 21st, when the government will lay out its economic plans for 2020. Wuhan province, where the virus originated, began to test all residents on a voluntary basis on May 14th after discovering the first new cluster since ending lockdown; 28 asymptomatic carriers were discovered between May 14th and 16th.

India's cases surpassed China's for the first time, reaching 95,000 on May 17th. The government extended the national lockdown until May 31st, and on May 14th it announced stimulus equivalent to 10% of the country's GDP, although this included previously planned fiscal and monetary measures, in addition to new policies to support small businesses.

Governments are discussing how to revive travel flows while mitigating infection risk. China and South Korea began to fast-track business visitors on April 29th, and the countries are in consultation about extending the scheme to Japan, which lifted its state of emergency in most prefectures on May 14th. Australia and New Zealand announced plans on May 5th to set up a travel corridor. Depending on whether border openings lead to new outbreaks, they could set a precedent for other "travel bubbles" in Asia.

The epidemic has hardened protectionist sentiment. In a speech on May 12th the Indian prime minister, Narendra Modi, outlined plans to promote economic self-reliance, which we expect to translate into support for domestic procurement, measures to attract the relocation of manufacturers from China and continued resistance to joining the Regional Comprehensive Economic Partnership. Meanwhile, Japan introduced tougher regulations on foreign investment on May 8th. Several governments, including those of the EU and Australia, called for an independent investigation into the origin of the virus, which stoked tensions with China.