‘Zero Covid’ economies like Hong Kong, Singapore, Australia risk being left behind: EIU report

The Economist Intelligence Unit said Asia-Pacific’s coronavirus elimination strategies are likely to undercut rather than support economic activity

Rising vaccination rates in North America and Europe are driving a global recovery, while Asian countries struggle to reconnect with the outside world

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Water-filled barriers are seen in the Hong Kong central business district. A report warned years of border closures would drive economies toward self-sufficiency and could have negative effects. Photo: Reuters

Published: 2:00pm, 23 Jul 2021Updated: 8:16pm, 23 Jul 2021

“Zero Covid” economies in the Asia-Pacific region risk being left behind as the world recovers from the coronavirus pandemic, with years of potential border closures threatening their future prosperity, a report has warned.

Hong Kong and Singapore face permanent damage to their status as international business hubs, while Australia and New Zealand risk missing out on the return of international tourism and students, according to the report by the Economist Intelligence Unit (EIU).

Asia-Pacific’s elimination policies are likely to “undercut rather than support economic activity” as rising vaccination rates in North America and Europe drive the global recovery from the pandemic, it said.

“There is a risk that zero‑Covid policies will persist and border reopening will not occur in any meaningful sense in 2021-22,” the EIU said in its report released on Wednesday.

“The emergence of Covid-19 variants that are resistant to current vaccines would quickly persuade zero‑Covid countries to retain their current approach and, in this context, that strategy may even become more favoured in other countries.”

While acknowledging zero Covid strategies had saved lives and delivered economic benefits in the short-term, the EIU said years of border closures would drive economies toward self-sufficiency and could have “powerful effects”, including potentially straining international relations.