Opening border and increasing cooperation:” The key “ for all to get up from Covid 19

Economic cooperation is critical to ensuring a smooth recovery from the pandemic. It's also a way to help reduce the long-term costs of Covid's severe consequences while maximizing the benefits of countries' post-pandemic reconstruction efforts.

The year 2022 begins in a difficult situation. The Omicron mutation caused damage on recovering economies, forcing many countries to reintroduce travel restrictions, resulting supply chain disruptions and high inflation. It also occurred on a larger scale than originally anticipated, resulting in higher fuel prices and higher inflation. 

The International Monetary Fund (IMF) estimates that global growth will decelerate from 5.9 percent in 2021 to 4.4 percent this year, which is a reduction of 0.5 percentage points from the report's projection. 

It's unsurprising that in such circumstances, the need for "self-sufficiency" and protectionist policies have grown in popularity in the last two years, particularly in countries with strict border controls to prevent epidemics. 

More than ever, countries must reopen their borders and strengthen their cooperation. Vietnam, predictably, is actively promoting efforts to maximize the benefits of the RCEP Agreement. 

The "freedom road" is being opened. 

According to a World Bank report, Vietnam is one of the countries that benefits the most from the Agreement in the most optimistic scenario, when all favourable terms are applied. 

Vietnam's GDP is expected to grow at a faster rate than the rest of the RCEP countries, at 4.9 percent. 

Furthermore, the RCEP Rules of Origin allow ASEAN markets to import up to 60% of product components from non-RCEP economies (on value-added terms) for resale. This creates numerous opportunities for countries to diversify their supply chains with third parties in order to effectively "defend" against future uncertainties. This creates numerous opportunities for countries to diversify their supply chains with third parties in order to effectively "defend" against future uncertainties

Economies that want to boost production and export growth can use measures like foreign investment reforms to open up capital flows. 

Southeast Asia has developed rapidly in the digital economy over the last two years, outpacing any other region on the planet. 

Consumers in Vietnam are turning to the internet to find solutions to their problems during the lockdown. As a result, since the pandemic began, Vietnam has added 8 million new digital service users, a rate that is higher than the Southeast Asian average. When online consumption becomes inherent in people's lives, the retention rate of digital services skyrockets: 97 percent of new users continue to use online services, with 99 percent intending to do so in the future. 

These changes must be promoted and widely implemented because Southeast Asian consumers are increasingly turning to online shopping; it has become a way of life for them. 

 Highlights to remember 

Improving the digital platform, which includes speeding up business payment processing and synchronizing data standards, will help both parties feel more confident and transparent. 

Cross-border transactions are an important focal point in global connectivity, with the total value of global payments expected to reach $156 trillion in 2022. 

The successful connection of Singapore and Thailand's real-time payment systems (PayNow and PromptPay) in 2021 not only marked the birth of the world's first cross-border payment link, but also a significant step toward realizing Southeast Asia's digital economic potential. 

The example will encourage greater participation from the financial services industry as well as other Southeast Asian markets, ultimately leading to a truly regional solution. 

Southeast Asia will soon unleash the enormous potential of the region's digital economy by allowing businesses and consumers to transact across borders. 

The path that lies ahead 

Increasing the speed of trade flows and coordinating national solutions in terms of nature and timing will help build confidence in financial markets and investor communities. 

Furthermore, sharing information and pooling resources allows the international community to come up with common solutions to global issues, such as the lessons learned from Thailand's real-time payment platform.

Although many countries' domestic payments have advanced rapidly in recent years, cross-border payments face numerous challenges. 

In most industries, there are two ways to achieve a unified standard: either the entire world comes together to create a universally recognized standard, or stakeholders and interests come together to create a unified standard. 

Therefore, finding a point of agreement is the key for all to get up from Covid 19

The MAS and BOT's success is a testament to the latter's efficacy, demonstrating the value of collaboration between government agencies, technology companies, and multilateral organizations in achieving results. 

This is a valuable lesson for many parts of the world, not just ASEAN countries. 

Over the last three years, we've seen a lot of change. Instead of a single market, it makes far more sense if the entire international community follows suit.

Tim Evans, Director of HSBC Vietnam/ Kinhtevadubao.vn