SEA’s New COVID-19 Restrictions – Good or Bad for the Supply Chain?

SEA’s New COVID-19 Restrictions- Is it Good or Bad for the Supply Chain? Featured Image

(Photo by Adrien Delforge on Unsplash)

Due to new variants of the COVID-19 virus, Southeast Asia implemented new restrictions affecting the flow of production once again. It is no news that the worldwide pandemic disrupted many operations around the world. In which, one of the industries that were gravely affected is the manufacturing and logistics industry. Sectors like automotive and semiconductors are one of the few examples in which production was disrupted by the crisis.

This was the case in Malaysia where they needed to have a nationwide lockdown to deal with the growing number of COVID-19 cases. In a report by Everstream Analytics, the production of electronics, semiconductors, and medical equipment has halted due to the new restrictions in the country, especially companies located in Selangor and Kuala Lumpur. Nonetheless, in order to ensure minimal disruption to their supply chain, a few manufacturing-related services are allowed to operate but with a lesser workforce. The country, although still in Phase 1, already has a national reopening plan in place for when the cases of COVID-19 subdues.

Similarly, Thailand is also experiencing disruption in its supply chain, specifically on production, causing delays in exports. One example, in a report by the Japan Times, the automotive giant, Toyota decided to suspend the operations of its plants in Thailand. This was a big decision for the company as their plants in the country are considered to be the key production bases in Southeast Asia. In line with this, they also suspended part of the production at their affiliate’s plant,  Aichi Prefecture. 

The number of  COVID-19 infections has also been rising in Vietnam, causing the local authorities to tighten and implement new protocols, once again affecting the country’s supply chain and leading to the suspension of some of their operations. In an article by China Macro Economy, it was stated that some Chinese Manufacturers were forced to stop production in the country after suffering a great loss due to the pandemic. 

“The country’s financial and economic hub and neighbouring industrial provinces like Dong Nai and Binh Duong have closed non-essential businesses, restricted gatherings and imposed strict social distancing measures,” said by authorities in Ho Chi Minh City (China Macro Economy)

On the other hand, Singapore’s Finance Minister, Lawrence Wong announced in Parliament last Monday, July 26, that the recent event concerning Singapore returning to Phase 2  will not affect the country’s economic recovery.

Sectors such as retail and food and beverage (F&B) will surely be affected by the tightened measures implemented in the country as dining-in is suspended and group gatherings will now go back to a max of two people. Nonetheless, most of Singapore’s economic activities have an outward orientation (70%) giving the country more opportunity to continue its plans of reopening. The country is also offering support packages- wage support and new relief funds. In a report by Channel News Asia, until August 18, other forms of support like higher wage subsidies will be offered by the country under the Jobs Support Scheme (JSS). Adding the support package fund and the current situation today, “Singapore’s overall fiscal position for FY2021 will remain unchanged with an overall deficit of S$11 billion, or 2.2 percent of GDP,” as stated by Mr. Wong.

With the roll-out of the COVID-19 vaccines, different sectors around the world are hopeful that all operations will go back to normal, all production will restart and the economic growth of the countries will soon continue to prosper.




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