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Khazanah Sosial, Vol. 4 No.1: 47-64
DOI: 10.15575/ks.v4i1.16787
* Copyright (c) 2022 Alik Naha and Debasish Nandy
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License
Received: October 10, 2021; In Revised : December 10, 2021; Accepted : December 27, 2021
Sustainability of Supply Chain: Analysis of Post-COVID Economic
Recovery Possibilities in Selected Sectors in the ASEAN Region
Alik Naha1*, Debasish Nandy2
1Department of Political Science Vidyasagar College, Kolkata, West Bengal, India
2Department of Political Science Kazi Nazrul University, Asansol, West Bengal, India
*Corresponding Author E-mail: aliknaha@gmail.com
Abstract
The environment of financial uncertainty among the Global Supply Chain networks has been fueled by the
impact of Covid-19 which saw major economies around the world imposing months of lockdown, slowing
the pace and flow of raw materials and manufactured products resulting in an economic slowdown. It has
also brought to light the vulnerabilities and susceptibilities of emerging economies, like the ASEAN nations.
This has resulted in collapsing of both domestic and foreign sectors like retail, accommodation, and food
services. This has prompted the regional governments to boost up regional cooperation through structural
reforms for sustainable economic recovery. In this respect, three sectors of tourism, agro-processing, and
garments can be improvised, while two other sectors like electronics and E-trade have greater potential
for future growth. In this context, the paper using content analysis and exploratory methods focuses on
the impacts of Covid-19 on the sectors of tourism, agro-processing, and garments in the ASEAN region and
the possible options for improvising the sectors of Electronics and E-trade to further economic recovery
in the ASEAN region.
Keywords: ASEAN, Covid-19, Economic Slowdown, Global Supply Chain, e-trade, e-economy.
Abstrak
Lingkungan ketidakpastian keuangan di antara jaringan Rantai Pasokan Global telah didorong oleh
dampak Covid-19 yang membuat ekonomi utama di seluruh dunia memberlakukan penguncian selama
berbulan-bulan, memperlambat laju dan aliran bahan baku dan produk manufaktur yang mengakibatkan
perlambatan ekonomi. Ini juga menyoroti kerentanan dan kerentanan negara-negara berkembang,
seperti negara-negara ASEAN. Hal ini mengakibatkan ambruknya sektor domestik dan luar negeri seperti
ritel, akomodasi, dan jasa makanan. Hal ini mendorong pemerintah daerah untuk meningkatkan kerja
sama regional melalui reformasi struktural untuk pemulihan ekonomi yang berkelanjutan. Dalam hal ini,
tiga sektor pariwisata, pengolahan hasil pertanian, dan garmen dapat diimprovisasi, sementara dua sektor
lainnya seperti elektronik dan perdagangan elektronik memiliki potensi pertumbuhan yang lebih besar di
masa depan. Dalam konteks ini, makalah yang menggunakan metode analisis konten dan eksplorasi
berfokus pada dampak Covid-19 pada sektor pariwisata, pengolahan hasil pertanian, dan garmen di
kawasan ASEAN dan opsi yang memungkinkan untuk berimprovisasi pada sektor Elektronik dan
Perdagangan Elektronik. untuk pemulihan ekonomi lebih lanjut di kawasan ASEAN.
Kata kunci: ASEAN, Covid-19, Perlambatan Ekonomi, Rantai Pasokan Global, e-trade, e-ekonomi.
INTRODUCTION
The Supply Chain concept was created in the early 1980s, and since then, theorists and
practitioners' interests and concerns have grown significantly. Around this time, businesses realized that
segregating suppliers and other functional units in the Supply Chain was not a viable strategy for long-
term competitiveness. There aroused a sense of “collaborative relationship within and beyond their
organization” (Felea & Albăstroiu, 2013). Supply Chain and Supply Chain Management help to promote
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Sustainability of Supply Chain: Analysis of Post-COVID Economic Recovery Possibilities in Selected
Sectors in the ASEAN Region
Alik Naha and Debasish Nandy
ISSN 2715-8071 (online)
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corporate efficiency. To integrate the Supply Chain, connecting and exchanging information on Supply
Chain, Supply Chain Management, and Distribution Management characteristics have been provided. This
integration led to the notion of an extended corporate supply chain, which is currently manifested as a
cooperative supply chain that transcends intercorporate boundaries to increase value across the Supply
Chain. (Janvier-James & Mbang, 2012).
With the globalization of the international economy, product sourcing and consumer items from
hosts all over the globe are growing producers' and wholesalers' reliance on International Supply Chains.
The efficiency of marine supply chains has also become important for positive competitiveness in
emerging global markets as a result of trade barriers being eliminated (Fourie, 2006). Physical trade
distribution's competitiveness with the rest of the globe will gradually impact economic growth and
development. However, despite its importance from an academic and commercial standpoint, there is
substantial ambiguity over its definition. As Habib points out, some consider it to be the interchange of raw
materials and completed products, while others consider it to be a management philosophy, and just a few
authors define it as an integrated system (Habib, 2010). The continuation of this uncertainty demands a
distinct understanding of the notion.
The concept of Supply Chain has been defined by Beamon (1998) as a “structured manufacturing
process wherein raw materials are transformed into finished goods, then delivered to end customers.”
(Beamon, 1998). Lambert, Stock, and Ellram (1998) viewed it as alignment of companies that sell products
and services in the market (Lambert, Stock, & Ellram, 1998). Pienaar (2009) argued it as “a general
description of the process integration involving organizations to transform raw materials into finished goods
and to transport them to the end-user.” (Pienaar, 2009). Chopra and Meindl (2007) mention that Supply
Chains include “all parties involved, directly or indirectly, in fulfilling a customer request. Within each
organization, such as a manufacturer, the supply chain includes all functions involved in receiving and filling
a customer request. These functions include, but are not limited to, new product development, marketing,
operations, distribution, finance, and customer service.” (Chopra & Meindl, 2013). Chen and Paulraj (2004)
on the other hand consider Supply Chain as a “network of materials, information, and services processing
links with the characteristics of supply, transformation, and demand.” (Chen & Paulraj, 2004). More
extensive ideas concerning the Supply Chain has been presented by Ayers (2001), who suggest Supply
Chain as a “Life cycle processes comprising physical, information, financial, and knowledge flows whose
purpose is to satisfy end-user requirements with products and services from multiple linked suppliers.” (Ayers,
2001). This divergence in the conception of the idea makes it difficult to be implemented in practice. A
typical integrated supply chain involves three dimensions – first, the material flow, which includes
purchasing, transformation, and distribution; second, informational flow, which includes electronic data
exchange; and finally, the financial flow which includes payment for the products, services, and the retailer
by the consumer on the finished product to suppliers and subcontractors.
SCM, on the other hand, refers to the integration of all functional operations within the supply chain.
SCM, according to Russel and Taylor, is in charge of coordinating the movement of information, products,
and services across a network of consumers, businesses, and supply chain partners (Russel & Taylor,
2009). It is related to the globalization of manufacturing and manufacturers' proclivity to give their
planetary inputs, which necessitates the management of profitable ways for regulating global input or
output flows. In such cases, the primary focus of market rivalry is not just between commodities, but also
between supply networks that deliver goods. Customer satisfaction is the hallmark of the success of the
Supply Chain. Therefore, the rationale of the term is cost efficiency and customer support (Janvier-James
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& Mbang, 2012). As Oliver and Webber note, “Supply chain management (SCM) is the process of planning,
implementing, and controlling the operations of the supply chain with the purpose to satisfy customer
requirements as efficiently as possible. Supply chain management spans all movement and storage of raw
materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.”
(Oliver & Webber, 1982). For Krajewski, Ritzman, and Malhotra, SCM is “developing a strategy to organize,
control and motivate the resources involved in the flow of services and materials within the supply chain.”
(Krajewski, Ritzman, & Malhotra, 2007).
The virus has jeopardized the supply chain and the industrial system's smooth operation. It has had
a negative influence on long-term production and global consumption patterns. The supply chain network
has been affected as a result of the national border closure. The pandemic's influence is likely to alter
production and consumption patterns in the next years. In such a case, sustainable manufacturing may
develop as a solution to this problem. The epidemic has severely affected national and international trade.
The scenario has exacerbated the widening gap between supply and demand. Essential goods such as food,
groceries, and pharmaceuticals are in high demand.
RESEARCH METHOD
As regards the methodology, we have used content analysis and exploratory methods in
collecting data from secondary sources like books, journals, web reports, scientific papers, and
publications of professional organizations and practitioners.
Research Questions
There are four research questions that we seek to investigate in this paper.
1. How will the production system and Supply Chain deal with the pandemic?
2. What are the impacts of Covid-19 on the sectors of tourism, agro-processing, and garments in the
ASEAN region?
3. What are the possible options for improvising the sectors of Electronics and E-trade to further
economic recovery in the ASEAN region?
4. What it will be to sustain the Supply Chains in the post-COVID world?
RESULT AND DISCUSSION
Supply Chains in the Era of Globalization
Global Supply Chains are a network of interrelated activities and processes that generate and
transport goods and services from the manufacturer to the client. It links several functional units through
logistics to maximize resource use. As a result, encouraging a cooperative climate among businesses
(Reeds, 2000). Advanced transportation and communication infrastructures have redefined global
connections in the era of globalization. Previously, moving products from one location to another was
expensive and time-consuming. Due to restricted access to various locations, the scope of business was
likewise constrained. Any individual or entity is now more linked than ever. Opportunities for inter-
continental business have expanded as communication technology has advanced. It has also led to the
establishment of a complex web of Supply Chain networks that connect various corporate organizations
throughout the world, from manufacturers to suppliers. These networks assist businesses in lowering
costs by delivering goods and services from regions of the world with low labor and manufacturing costs.
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Globalization also provides access to pan-continental markets. As a result, business groups and
manufacturing firms can sell their products in regions where demands are higher. Also, those
manufacturing units that cannot make a profit through business in the developed world, can invest in the
developing countries where market size is much bigger and customers favor diverse options. This
interconnectivity promotes cost-effective businesses. Globalization further allows the regional
manufacturing units that do not have high capital resources and limited market access to mutually
collaborate and promote their business. These collaborations can take place through both G2G and B2B
agreements. Two industries that have benefitted much from this cost-reducing effect of globalization are
electronics and apparel (Chopra & Meindl, 2013). Electronic items like mobiles, tablets, smartwatches, etc.,
and clothing are in high demand throughout the world and are easy to transport. The rise and growth of
e-commerce in this new century is the reflection of the success of interconnected Supply Chain networks.
There are several advantages of participation in a globalized Supply Chain.
Cost Efficiency
Companies engaged in a global supply chain can reduce their expenses, ensuring a steady market
position and commercial sustainability. One of the earliest strategies to apply cost reductions in supply
networks has been global supply chains.
Access to Diverse Products
Global Supply Chain allows easy and efficient export of the highest quality products. The
competitive nature of the global market makes it possible to get the best price for supplies. Customers get
the scope of selecting products of their choice from a varied range and at the best price.
Better Motivation
Regional businesses participating in the global Supply Chain are encouraged to improve their
quality standards and performance. There is a high level of competition and non-performance will allow
other business groups to acquire the market and make profits.
Diverse Market Opportunities
Broader market prospects also come with accession to the global supply chain. For instance, if a
firm chooses to get its products from Singapore, it will look for opportunities to explore markets to enter
beyond Singapore. In short, as a company starts to outsource supplies, its urge to expand market
opportunities increases.
Learning Opportunities
Across the globe, along with mode, the strategies of doing business vary. An important contribution
of globalization is that it allows the functional units to learn from each other through collaborations.
Through this learning of new production and distribution strategies, companies can cope up with
emerging challenges in the domain of global trade.
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Sustainable Management of Global Supply Chain
The World Commission on Environment and Development in its Brundtland Report (1987) viewed
sustainability as development that fulfills the requirements of the present generations without
jeopardizing the demands of the future generation (WCED, 1987). In the words of Elkington, to become
sustainable, a firm needs to calculate the total expenditure of all its activities – people, planet, and profit
(Elkington, 1997). But there remains a divergence of perspective among stakeholders in realizing these
terms, which slows down concrete progress towards more sustainable economic practices. Sustainable
Supply Chain Management can be seen as a comprehensive idea, not confined to Green Supply Chain
Management (GSCM) and reverse logistics. Today, as global trade has become more intense and diverse,
there are increasing financial, environmental, and social risks to Supply Chains. As a result, sustainability
has emerged as a crucial aspect for conducting global trade.
Sustainable Supply Chain Management is an effort to induce sustainably in different levels of the
Supply Chain – purchasing, manufacturing, designing of products, packaging, storing, transporting, etc.
(Linton, Klassen, & Jayaraman, 2007). Also, SSCM may be seen as a Supply Chain integrated process
involving sustainable internal Supply Chain integration, supplier sustainable Supply Chain integration,
sustainable integration of the customer Supply Chain, and the community sustainable integration of the
Supply Chain (Wong, Wong, & Boon-itt, 2015). As Fritz (2019) notes, for sustainable Supply Chains, there
is a need to incorporate sustainability at various levels of Supply Chains through “governance mechanisms
and top management; at the operational level; at the product/service level; and, through supply chain
partners.” (Fritz, 2019). This integration is not necessarily hierarchical but can take place simultaneously
in a different order.
Governance refers to the management of an organization at the top level. For the Sustainability of
Supply Chains, this is done through the directors, board of management, partnership firms, and at the level
of federation. Sustainability has to be treated as a goal or an objective that needs to be achieved by an
organization. As Pagell and Wu note, “The specific managerial actions that are taken to make the supply
chain more sustainable with an end goal of creating a truly sustainable chain.” (Pagell & Wu, 2009).
Therefore, the stakeholders at the highest level in any organization need to be engaged in promoting
awareness, undertaking sustainable initiatives, and educating people. These policies, activities, and
sustainability partnerships must be coordinated at the Supply Chain level to administer material,
information, and capital flow most efficiently and efficiently in the different stages of SC (e.g. design,
purchasing, production) and to integrate short and long-term stakeholder needs while continuously
maintaining and improving. This coordination includes sustainable management in multiple
manufacturing processes and across different organizational and geographical borders.
At the operational level, sustainability needs to be integrated among various departments like
finance, production, accounting, technology, and logistic transport. Involvement of these departments that
play a crucial role in planning, designing, outsourcing, production, logistic related activities, etc. to make a
Supply Chain sustainable. Such integration needs a robust information system to handle all information,
finance, and product flows along the Supply Chain which contains both environmental, social, and
sustainable criteria to meet Sustainable Supply Chain objectives (Badurdeen, et al., 2009). Integrating
product-level sustainability indicates that sustainability should be part of the product/service design, to
limit or eliminate its harmful environmental and social effects during the manufacturing, use, and end-to-
life period. Sustainability at the product or service level is also important as it is the only means of contact
between a manufacturing firm and the consumer of the product. The customer assessment of the
sustainability of a firm might thus focus on its product/service features, which can be expressed by a
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ranking of products/services, such as the NGO Greenpeace Guide to Greener Electronics (Greenpeace,
2017), or rating applications for smartphones. Finally, The transfer of sustainability to Supply Chain
partners implies strengthening the abilities and skills of suppliers so they can achieve the same
performance of sustainability as the originating company. Here collaboration is key to manage the process
of sustainability. Specific measures to transmit and monitor suppliers' sustainability performance include
training and the development of information systems. In order to take care of sustainable development
goals, collaboration with Supply Chain partners is required and usually promoted by clients and
stakeholders. The role of the government is also crucial in promoting a sustainable Supply Chain (Seuring
& Muller, 2008). Today, for Sustainable Supply Chain Management there is also the need to underline
ethical issues beyond the economic, social, and environmental aspects of sustainability. These ethical
issues are related to employment opportunities and job losses. The pandemic of COVID-19 has made this
ethical concern far more revealing. In the course of the pandemic, several millions of people have lost their
jobs or opportunities for better livelihood throughout the world due to the almost collapse of Global Supply
Chain Management.
Challenges to Production System during COVID-19
The course of the pandemic has been marked by a sharp rise in the demand for medical equipment
like PPE kits, ventilators, oxygen cylinders, face shields, sanitizers, etc. As a result, several big
manufacturing houses have used their production facilities to meet the growing demand of society. In
order to manage the production of essential and nonessential products during a pandemic, government
machinery, manufacturing organizations, and health institutes should be equipped before time to confront
pandemics. There must be a buffer plan in place to address the potential challenges. The post-COVID
period offers an opportunity for a sustainable business transformation and requires a more robust supply
and production chain. It offers room for the development of a flexible and resilient production system to
preserve economic and social sustainability in the production process. To combat the pandemic or other
disruptive event, the company needs to have Supply Chain network resilience and manufacturing
resilience. Because of such disruptive situations, material scarcity and delivery delays are observed
throughout the supply chain, leading to the ripple effect and lower service level, income, and process
productivity (Ivanov, Sokolov, & Dolgui, 2014).
The next major problem for nations concerns the planning of skilled medical staff, the distribution
of jobs, and the programming for medical and diseased individuals. In the actual world, producing urgent
items before a pandemic outbreak is extremely difficult. An event such as COVID-19, therefore, places
pressure on the workers to adapt to the new production system. Many developments, such as
modifications to manufacturing and processes and conventional working practices for maintaining social
distance at work, have supplemented this. This makes it more challenging to achieve staff productivity
goals since additional time is needed to adapt to the new regime.
Many manufacturing and service organizations are developing pandemic preparation strategies. To
meet consumer demand during the COVID, stock of vital products and raw materials must be maintained.
In order to deal with unforeseen disruptions, the organizations should focus more on the manufacturing
delivery system. The WHO has also published different preparation instructions. The WHO has established
a prevention and response framework of COVID-19 that places greater focus on livelihood potential and
reduces COVID-19 morbidity and death. To limit the impact of such a pandemic, Hale and Moberg
proposed that the policy on procurement, stock planning, travel planning, and production planning should
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be reconsidered (Hale & Moberg, 2005). Different mitigation techniques are explored, including delay,
strategic stocks, flexible supplies, flexible movement, and dynamic disaster response planning (Tang,
2007).
The pandemic’s impact on the global Supply Chain has been multidimensional. First, a sharp rise in
demand for certain companies and their products among consumers; second, supply failure and raw
material supply uncertainty; third, a decline in demand for products like automobiles, textiles, etc.; fourth,
impacting the ability of workers to assemble and distribute items; and finally, impacting capacity to send
and receive items on time because of scarcity and logistic constraints. To mitigate these challenges, a
feasible manufacturing strategy is required. The manufacturing units are required to reflect greater
resilience and production flexibility to meet consumer demands. Artificial Intelligence (AI) technologies
can be used to create maps that allow companies and individuals to avoid areas of risk, manage risks, and
the government to disperse resources to mitigate those risks. In the industrial production units, digital
production would help to maintain social distance and regulate the mobility of the worker as a result.
Likewise, drones can be used for the delivery of essential commodities in big towns and cities to avoid
direct contact.
As a result of the COVID-19, there is a need to reinvigorate production capacities and raw materials
supplies to most manufacturing sectors worldwide or local (automotive, transport, pharmaceutical, food,
etc.), etc. Additional funding from national and regional governments is also needed to revamp the sector.
Disruption of trade routes due to containment policies adopted by various governments has significantly
hampered international trade. The service Supply Chain has been severely hit. Hotels, restaurants,
tourism, etc. are witnessing a gradual decline. The pandemic has put to challenge the survival of the
workers. Many manufacturers and business groups are cutting down manpower to reduce losses
incurred. Also, in pursuance of COVID protocols, most of the manufacturing units are working with a
reduced workforce that has significantly lowered production output. The manufacturing and service
sectors are expected to remain vulnerable to the effects of the pandemic for a long time. Therefore, with
an aim towards the future, these vulnerable sectors need to prepare and educate their workforce to
become more resilient. Companies need to compensate and introduce policies that take into account the
existing vulnerabilities of their employees while at the same time enabling the latter to work with reduce
the impact of the virus. There is also the need to stress on worker’s mental and physical well-being to boost
production output.
COVID-19 & Disruption of Global Supply Chain
Any global event that has the potential to adversely impact the major exporting countries can give
a shock to the Global Supply Chain. These events include world war, regional conflicts, inter-state conflicts,
major health crises (e.g., COVID-19), and trade wars (e.g., The US-China trade war). Due to either of these
challenges, the exporting economies are unable to conduct business as usual with their trading partners.
The smooth functioning of Supply Chains is hindered. The onset of an economic recession due to the
pandemic reflects this disruption across manufacturing and service industries. This is due to the
containment measures imposed by countries around the world to mitigate the health crisis. As a result,
there have been restricted movements, closure of national borders, reduced production output, and an
overall decline in economic activities.
The outbreak of the pandemic was first reported in China, which is also one of the major global
manufacturing and distribution hubs (PWC Nigeria, 2020). China is the world’s largest exporter
accounting for nearly 16% of the total global exports. Many countries are depended on China for the supply
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of electronic hardware components, pharmaceutical producing items, and other finished or semi-finished
products. Due to the pandemic and related restrictions, many foreign industries and production firms that
are dependent on China for the supply of raw materials are witnessing lower production. As a result, there
has emerged a global demand-supply imbalance. This has severe implications for lower and middle-
income countries.
The continuity of a Supply Chain requires an effective transport system. But due to the containment
measures, the global transport system has collapsed. The World Trade Organization (WTO) reported a
substantial decline in international trade volume by the end of the previous year. It noted a two-digit
decline in all the continental regions especially in Asia and North America. This disruption of the Supply
Chain has also impacted the World Food Program. It is expected to significantly increase the number of
people suffering from acute hunger. The World Bank too has projected a decline in global GDP. This means
there will be a decline in “the amount of global incomes and wealth available to finance production and
consumption will reduce by 5.2%” (PWC Nigeria, 2020). This will have a repercussive effect on global
purchasing power. In such a situation, countries are renewing their Supply Chain policies while the MNCs
are reshaping their outsourcing policies to overcome the disruptions caused due to the containment
measures. The developed economies have stepped up their push on companies to tackle carefully
procedures that will provide resilience in the face of potential disruptions in the global Supply Chain.
Due to the pandemic, some countries are adopting protectionist policies to meet their growing
domestic demands. The WTO has also permitted the member states temporary trade restrictions on
essential commodities. This can have serious implications for those countries that cannot produce
domestically and have to rely on the import of these essential commodities. This is a serious challenge in
the path of economic development when many of these emerging economies are already tormented by
the disruptions in Global Supply Chain, commodity market, and human resources.
Post-COVID Recovery of Various Sectors in the ASEAN Region
The pandemic has thrown the ASEAN region's rising economies into disarray. Containment
measures and shutdown of national borders have impacted the demand-supply relationship to a great
extent. As a result, the members of ASEAN adopted several structural reforms to move towards
sustainable economic recovery (Seng, Swee, Mangal, Ng, & Zara, 2021). In this paper, we are going to
emphasize three key areas that need greater focus like tourism, agro-industry, and garments. Also, two
other sectors have the potential to reflect future growth – electronics and digital trade. Strengthening
regional coordination in Southeast Asia is essential to aiding states in dealing with future crises more
successfully.
COVID-19 & Tourism Industry
The region of ASEAN is a highly diverse region with richness in flora, fauna, deep-rooted tradition,
history, and culture. Tourism in the region has boomed in the last few decades. Several beach cities have
emerged as favorable and cheap honeymoon destinations for foreigners. Cheap transportation, budget
hotels, local delicacies, and colorful nightlife have attracted tourists from all around the world. This has
contributed to the significant growth of regional tourism in the last few years. In comparison to 2005, the
number of tourists visiting has increased three-fold by 2019 (ASEAN Statistics Division, 2021). Tourism is
a vital driver of regional GDP and job growth, but the COVID-19 has had a significant impact on it, and it
must adjust appropriately. Though even before the outbreak of the pandemic, regional tourism suffered
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from several challenges: first, unplanned tourism policy with a focus on limited destinations leading to
overcrowding; second, tourism mainly dominated by foreign tourists from few particular countries; third,
underdeveloped infrastructure at most tourist spots, resulting in a lack of potential diversification; fourth,
the amount of money spent each by visitor falls short of regional goals; and finally, lower wage and
informal job.
With the onset of the pandemic in 2020, the popular regional tourist destinations have witnessed a
sharp decline in the number of tourists arriving. In some places, the rate of decline in the number of foreign
tourists ranged from 80% to 100% (Mufti & Akhlas, 2020). With government restrictions in place and
growing fear of infection among tourists, people have become health cautious and selective of travel
destinations. This is expected to change the pattern of international tourism as people tend to prefer short-
distance or proximity tourism. A poll conducted by the World Economic Forum found that a high
percentage of tourists are looking for destinations with proper hygiene and less congestion. Also, with a
decline in overall household incomes, cheaper domestic holiday spots are gaining more tourists' attention.
In a situation when countries around the world have embarked on the process of mass vaccination and
showing signs of recovery, the region needs to make efforts to promote regional tourism with proper
emphasis on health protocols and travel norms. It is more likely that during the pandemic, regional
governments are more likely to stress ecologically sustainable tourism instead of mass tourism
(Winterflood, 2020).
For the tourism sector to revive in the post-COVID period, ASEAN nations will need to develop
methods for promoting safe tourism and convincing international tourists. This will need the coordination
and execution of suitable activities to close information gaps and reduce risks. Passengers will feel safer
when vaccines are distributed. Countries should strive to diversify their tourism attractions and establish
lesser-known places of attraction. Ecotourism is a growing tourist trend that has the added advantage of
helping to protect natural places. With a greater emphasis on health and premium wellness experiences,
these locations have the potential to attract more tourists. To address the challenges of lower wage and
job insecurity, authorities should engage in training tourist sector workers in both digital and non-digital
skills. Higher-skilled workers will attract higher-spending visitors, while new technology will boost
worker productivity in the tourism industry. Each country's tourism industry will need to work closely
with national and provincial governments to improve communication channels. The formation of a
permanent crisis management task force can help to ensure that a country's tourism industry is better
equipped to deal with future crises.
Agro-Processing Industry & COVID-19
Agriculture is one of the major contributors to regional GDP. The availability of cultivable land and
skilled farming is a great advantage for the industry. But despite these benefits, certain challenges hinder
the growth of this sector. Inconsistent raw material supply owing to unfavorable weather conditions, shifts
in global market pricing and exchange rates, geographical limits, and considerable post-harvest food
waste. Seasonality in raw material availability, as well as a lack of access for local smallholder farmers to
official markets and enterprises, also impede agro-processing companies from operating efficiently year-
round. Most Southeast Asian countries have a labor-intensive agro-processing sector. Adopting more
sophisticated and productive processing technologies can assist the agro-processing sector in increasing
output quantities while also adding value. The growth of the agro-processing sector has been hampered
by underdeveloped utilities, transportation, and logistics infrastructure, particularly in rural regions. Lack
of financing, innovative technology, skilled personnel, stable and high-value markets, and hospitable
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business environments are restricting the access of agro-industry operators to key enablers. Shifts in
customer desire toward ecologically friendly products have also occurred, placing certain regional
producers at a disadvantage owing to their inability to supply. Labor shortages at factories, warehouses,
and logistical hubs disrupted supply chains during the Pandemic, and several nations put limitations on
food product exports and imports to prioritize local needs. Fortunately, some of these restrictions were
only temporary, and they were phased out within a few months. While agriculture was less affected by the
COVID-19 than other sectors, regional governments must now assist attempts to shift toward higher-
value-added businesses such as agro-processing (ITC, 2021).
Improving the efficiency and openness of Supply Chains will assist agro-processing businesses to
avoid delays and needless compliance expenses. Improving cross-border food product and production
inputs will decrease food wastage due to handling and provide simple access to key raw materials such as
insecticides. According to the OECD, digital technologies combined with adequate information and
communications technology infrastructure may help cut export delays in Asia and the Pacific by 44%
(Jouanjean, 2019). Today's customers are more aware, and there is a greater desire for healthy food
alternatives such as organic, "free-from" (e.g., gluten-free), functional, and reformed. Operational
improvements, such as organic cultivation; sales tactics, such as targeting high-end stores to expatriates;
and technical skills, such as educating staff in reformed food processing, are all factors in expanding the
food product diversity. Countries might assist businesses in increasing their sales channels, particularly
digital ones, and adding value in agro-processing by enhancing digital connections (e.g., expanding internet
coverage) and assisting firms in accessing digital platforms.
There are also opportunities to improve productivity through concentrating on research and
enabling regulations to provide a more constant supply of high-quality, safe raw materials and promoting
digital transformation in the agricultural processing business. The COVID-19 crisis revealed that Southeast
Asia's agro-industry is particularly sensitive to shocks. The regional governments can introduce strategies
to promote greater resilience. This may include enhancing regulatory functions, enhancing the local agro-
processing environment by emphasizing diversity, shorter supply chains, local alternative suppliers, and
local markets, implementing food-related circularity strategies to reduce post-harvest and supply chain
waste, and fostering collaborations between agro-processing stakeholders in the corporate sector, the
government, and other neighboring countries beyond the region.
COVID-19 & Southeast Asia’s Textile Industry
Because of their cheap labor costs, strategic location, preferential market access, and supporting
government policies, several Southeast Asian nations are competing in the labor-intensive textile, clothing,
and footwear manufacturing industries. Simultaneously, several of these nations continue to emphasize
large volumes of low-value-added products, relying on low labor costs as their primary competitive
advantage (Huynh, 2015). Southeast Asia's garment industries are vulnerable to supply chain disruptions
because they rely on raw material suppliers, timeliness, and size of local input production, and
unpredictable energy sources. Associated with this is an increasing labor expenditure while a
simultaneous decline in productivity rate.
COVID-19 has had a significant impact on the Southeast Asian clothing sector. Order cancellations
and manufacturing constraints have prompted numerous Southeast Asian firms to close their doors and
lay off workers. The industry's pre-pandemic difficulties have been compounded, resulting in higher
volatility and shortages of production due to a lack of raw materials, which affect various areas of the value
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chain. Closures of manufacturing operations in other nations have slowed the delivery of imported
materials and impeded garment production. The pandemic has also revealed the industry's lack of support
services for vulnerable workers and increasing disparities. In the short term, women working in these
industries are more vulnerable due to a lack of access to essentials, uneven home duties, gender-based
employment discrimination, and an increased risk of gender-based violence (Seng, Swee, Mangal, Ng, &
Zara, 2021). Long-term implications include restricted access to social assistance, uncontrolled working
conditions, and reduced access to health care, which may weaken women's economic and social
empowerment. The pandemic may also have a significant impact on children since economic constraints
and insufficient safety nets may force many under-aged youths into child labor (ILO & United Nations
Children’s Fund (UNICEF), 2020).
To mitigate these challenges, as a temporary measure the government has come forward to extend
monetary support to the garment industry. Beyond such immediate support, for the industry to achieve
sustainable growth and resilience, governments of the region will have to adopt certain long-term
strategies. This could help the textile industry to expand and become globally competitive in the post-
COVID period.
Improving competitiveness via productivity is important to sustaining the industry's development
potential. This would require emphasis on scrutinizing policies that stifle growth, such as high raw
material tariffs and time-consuming export permission procedures, which lead to high manufacturing
costs, improving vocational curriculum and expanding training availability, particularly in remote areas,
and encouraging the use of digital technology such as smart factories and additive manufacturing to allow
mass customization of products (Seng, Swee, Mangal, Ng, & Zara, 2021). Furthermore, the region's exports
are currently focused on certain markets such as the European Union and the United States. As a result,
more end markets must be developed. To stay appealing, the textile sector must also pursue product
differentiation and develop better value-added clothing.
Improving productivity and using better manufacturing technology might help the sector
withstand future demand shocks. According to ADB research, implementing new technology in the sector
may boost employee productivity by an average of 22% over the following five years (Asian Development
Bank, 2021). Shorter supply chains, local alternative suppliers, and local markets should be prioritized.
Governments might also fund machinery, train employees, and recruit international investors to
encourage higher value-added industrial processes. To make this industry capable of sustaining any future
shocks, flexibility has to be promoted. To satisfy shifting customer demand, garment manufacturers should
be able to make a transition between diverse manufacturing methods.
Electronic Industry & COVID-19
The manufacture of electronic products and spare components is a prominent sector in the region.
The products created range from capital-intensive products such as hard drives to labor-intensive
products such as electrical components. While the great majority of electronic products are exported,
some, such as consumer electronics, are still sold in domestic markets. Southeast Asia's electronics
manufacturing industry is frequently underdeveloped, with inadequate industrial infrastructure and a
lack of comprehensive upstream and downstream value chains (Seng, Swee, Mangal, Ng, & Zara, 2021).
Electronics manufacturers continue to rely heavily on a global industrial chain based in China, particularly
for raw materials and components. Many countries prioritize the assembly and testing stages of the
industrial value chain above the upstream stages that provide more economic value, such as R&D and
product design. One reason for the sector's inability to go beyond assembly tasks is its predominantly low-
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skilled workforce. Manufacturers must constantly improve and adapt their manufacturing inputs and
processes in response to technological advances, which can be costly in the long term. Furthermore, due
to economic and geopolitical reasons, the diversification of production away from traditional regions such
as the PRC gives opportunities for nations in the region to extend their electronics manufacturing footprint
or risk being left behind. Furthermore, due to economic and geopolitical reasons, the diversification of
production away from traditional regions such as the PRC gives opportunities for nations in the region to
extend their electronics manufacturing footprint or risk being left behind.
The virus has accelerated the global digital transformation while harming the sector. As a result of
supply chain interruptions, several regional electronics manufacturers are facing manufacturing delays,
leaving them unable to meet the rising demand for different consumer products during the COVID.
Manufacturing and shipping interruptions have an impact on transportation, sales, prototyping, and the
launch of new goods throughout the industry (Leopold, 2020). The COVID-19 outbreak has pushed
customers to adopt new ways of working and living, which may drastically impact demand for Southeast
Asian-made electronics components.
SEZs are geographically delimited areas where governments stimulate economic activity by
offering fiscal and regulatory incentives as well as infrastructure support. SEZs bring together firms to
profit from economies of scale while also facilitating potential spillovers in technology, labor skills, and
market opportunities. SEZs for the electronics sector can improve industrial links, resulting in greater
collaboration and resource pooling while boosting competitiveness. Creating industry-specific laws, such
as boosting electronics export through free trade agreements, would also benefit the region's firms. Finally,
better coordination between the government and industry, as well as local and foreign investors, can assist
to smooth the transition to high-value sectors in the electronics supply chain.
Southeast Asian countries must aggressively improve human capital to attract foreign direct
investment, remain competitive, and transition to high-value electronics manufacturing. Governments
might provide resources to industry-specific training programs, collaborate with other stakeholders, and
establish specialized government agencies. Governments must also prioritize the upskilling and reskilling
of employees in the electronics industry, for example, by collaborating with private sector partners and
educational institutions. Similarly, encouraging and investing in STEM education to assure a supply of
highly qualified people may contribute to an enabling climate for innovation. Southeast Asian
governments should also highlight the need for mutually beneficial agreements between foreign and
domestic enterprises that enable knowledge transfer, as well as explore giving incentives for local firms to
invest in R&D. Emerging industrial fields such as biotechnology may give case studies for the region's
electronics industry.
COVID-19 & E-trade
Digital trade is a young and expanding business. While the contributions to GDP of digital products
(software); digitally enabled services (business process outsourcing, online advertising, data processing
service export); and indirect digital services are not yet well captured in Southeast Asian national statistics,
their importance is likely to grow dramatically as more activities shift online in the post-COVID-19 world.
The digital economy in the region is currently dominated by information technology and business process
outsourcing (IT-BPO). Certain Southeast Asian nations have also seen an upsurge in the development of
software applications.
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While digital technologies have accelerated the growth of the IT-BPO sector of the digital trade
sector and may boost worker productivity in Southeast Asian countries, the increasing sophistication of
artificial intelligence technologies may eliminate the need for human involvement in many IT-BPO
functions. Although mobile and internet connectivity is critical, there are regional differences in availability
and speed. This is a serious impediment to inclusive growth since it prevents companies and consumers
from accessing the market. Poor or costly digital connectivity hurts future economic prospects. Many small
and medium-sized businesses (SMEs) cannot explore overseas sales opportunities, build a global business
network, and market their products on a global scale. Although digital technologies may be advantageous,
many SMEs are ignorant of the available digital solutions, software, or business platforms, as well as the
accompanying trade possibilities.
Economic activities and employment in the digital commerce industry are more adaptable to
remote labor and have shown to be more robust to the COVID-19 epidemic than in other industries. To
grow the industry in Southeast Asia and ensure the potential benefits of greater digital exports, an enabling
environment is required. A comprehensive national road map that reflects an awareness of new
technological prospects, talent needs, and specific policies will help the growth of the IT-BPO business.
Some Southeast Asian nations' underdevelopment of broadband networks can be attributed to a lack of
access to supporting infrastructure or to restricted expenditures in network expansion owing to
commercial unviability. As a result, larger expenditures will be required to develop the enabling network
infrastructure and incentivize investment. To assist the development of digital skills, a variety of activities
are required. Increased business participation in curriculum creation can assist in guarantee that
important skills like English language proficiency, critical thinking, and complex problem solving are
included. This must be complemented by company assistance and financial incentives to encourage more
and higher-quality workplace training (Asian Development Bank, 2021). Cross-border trade would benefit
substantially from eliminating the need for local registration, eliminating disclosure requirements for
essential intellectual property, and lowering needless procedures and levies. Adopting bilateral (or
multilateral) approaches to data flows would also enhance cross-border trade. Adopting the APEC Privacy
Framework and joining its Cross Border Privacy Rules System, as well as adopting international standards
that describe measures to protect personal data, would be a good place to start. This may be aided by
fostering interoperability between digital frameworks, particularly payment gateways, to reduce the
expenses associated with firms having to tailor their techniques to every market. Finally, nations within
ASEAN will need to make progress on the data management effort outlined in the Master Plan on ASEAN
Connectivity 2025 (MPAC 2025), which intends to increase openness and accountability on data
regulatory standards in ASEAN and identify areas for improvement (ASEAN Secretariat, 2016).
Knowledge- Based Economy and Intellectual Supply Chain
Since the 1960s, various state authorities of the world have been trying to introduce a knowledge-
based economy (Jarman and Chopra, 2008). To develop knowledge economies, governments have
replaced knowledge instead of machinery, land, and labour as the key source in economic progression and
production (Bell, 1973; Beniger,1986; Drucker, 1993) Knowledge-based economy has been a very
prominent sector of the economy and an important part of the supply chain. After introducing
globalization and liberal economic policy, most of the South East Asian nations emphasized ‘soft power’
and a knowledge-based economy(Nandy,2021a). The government of Malaysia has emphasized a
knowledge-based economy. Malaysia has developed a lot in the education and service sector very tactfully.
In terms of intellectuality, Malaysia is not superior. After emphasizing education and service sectors
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Malaysia has started to hire manpower from outside. Through the marketization of the education system,
Malaysia has started to offer higher and professional degrees by taking huge capitation fees from the
students(Nandy,2021c). Malaysia’s transition towards the k-economy immensely helped to increase the
country’s economy. The foreign resource persons and students are two major pillars of its intellectual
capital. The k-economy is a key part of its broader plan to succeed in the objective of the nation’s ‘Vision
2020’. The Vision 2020 is a 30-year plan to improve the Malaysian economy at optimum level aiming to
establish it as an industrial nation in terms of economic performance and technological capability
(Mustapha & Abdullah, 2000). As an important part of the k-economy, IT holds an important part of its
economy. Thousands of IT foreign experts are working in Malaysia which is performing as the key digital
supply chain.
There are many foreign enterprises from China and elsewhere looking for cross-border investment
in the field of advanced science and technological knowledge. Malaysia is also trying to enhance its
investment in the knowledge economy through FDI. In the education sector of Malaysia, Chinese
investment has become an important stake. COVID-19 has immensely hampered this sector, especially
foreign students who wanted to come to Malaysia for higher and technological study. The existence of
high-tech organizations is very supportive of the k-economic process. Due to pandemic, the supply chains
has been interrupted; that is why, demand for the industry to open up for further acceleration knowledge-
based manpower support (MIDA,2020). Among the ASEAN countries, Singapore, and Malaysia are
emphasizing a knowledge-based economy.
To control China’s Information and Communications Technology and Services Supply
Chain(Nandy,2021b). As the US has claimed that China is responsible for spreading coronavirus across the
globe, that is why the Donald Trump administration tried to interrupt the Chinese global supply chain as a
part of the Washington-Beijing ongoing trade war.
Due to visa issues of COVID-19, many Ph.D. students have been compelled for holding an admission
offer from various universities of Malaysia and Singapore as per their earlier plan (UWN,2020). However,
Singapore has been a lucrative destination for foreign students for the quality of education, facilities,
placement, standard of life, etc. As a destination of international study, Singapore pulls thousands of
students into its various governmental and non-governmental educational institutions. Singapore has
ensured a highly-successful knowledge-based economic system over the decades due to having a stable
democratic government, good governance, transparency, cosmopolitan environment, modern and quality
education system, high-standard of livedoid. In 2019, Singapore is ranked 20th as the best student city.
Singapore is emphasizing a knowledge-based economy. The foreign students are part of a knowledge-
based economic supply chain and it works in two ways. (1) every year thousands of foreign students used
to go to Singapore to study from whom the government of Singapore earns a huge amount of revenue. (2)
Many brilliant students are absorbed by the Singaporean government and non-governmental agencies as
a workforce. This is called the ‘intellectual supply chain’. Due to pandemic COVID-19, in 2020 the flow of
foreign students was reduced. After the pandemic was started, initially the curve of foreign student flow
was descending. But this curve has been started to move as an ascending curve since September 2020. In
September 2020, 41%, and in March 2021, it grew to 52%. This percentage is better than the USA (51%),
Netherlands (49%), and Australia (43%). Singapore has been highly affected by a coronavirus. But in many
ways, Singapore performed strongly during COVID-19 (Chew and Hudson, 2021).
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CONCLUSION
COVID-19 has caused significant social, political, and economic disruption. Closing non-essential
enterprises, social distance, smaller public gatherings, indefinitely postponing athletic events, canceling
conferences, and ordering people to shelter in place are all examples of global viral containment
approaches. While this crisis presents chances for long-term sustainability, it may also lead to
disappointment. Although doubts and worries persist, we may anticipate a move to greater supply chain
sustainability as a result of this crisis. Sustainability strategies and practices help to supply chain resilience
by, for example, ensuring the preservation of ecosystem services, supporting more sustainable ‘buy local'
behaviors, and fostering community trust (Sarkis, 2020). Risk reduction and crisis response are two
reasons why the crisis provides a transformative opportunity for reducing risk and building resilience via
sustainability. In a recovery, jobs and economic considerations will take precedence over any pretense of
environmental concerns. Several countries have previously suggested an economic growth agenda that
includes scaling down or eliminating some environmental restrictions. This tendency is concerning for
social and environmental sustainability. The post-COVID-19 recovery might result in worse
environmental effects.
As part of Industry 4.0, manufacturing technology is moving toward automation and data exchange
platforms. Manufacturers may use Industry 4.0 technologies such as cyber-physical systems (CPS), the
Internet of Things (IoT), cloud computing, and cognitive computing to supplement human judgments with
decentralized decision-making. In response to COVID-19 efforts, these technologies may play significant
long-term roles (Kumar, Raut, Narwane, & Narkhede, 2020). Data-driven awareness-based collaborative
action is a potential big change. This activity entails collectively discussing issues and then modifying
behavior in response to the COVID-19 crisis. As systems begin to collapse, particularly market and
governmental regulatory systems, companies must alter their behavior. Similarly, similar techniques can
help with sustainability. A significant development that is probable is data-driven awareness-based
collective action. This activity entails addressing issues cooperatively and then modifying behavior in
response to the COVID-19 dilemma. Organizations require behavior modification as systems, particularly
market and governmental regulatory systems, begin to fail. Similar approaches can help with
sustainability. Ensuring vital equipment and supplies through more agile manufacturing and quick supply
logistics to hot zones might amount to more lives saved or the spread of positive cases being slowed—a
social sustainability problem.
By manufacturing only what is required, localized production can help to maintain sustainable
supply chains. Shorter supply chains result in less waste, less transit, and less demand for inventory
storage; each has long-term supply chain consequences. During the COVID-19 crisis, social distance,
remote employment, and reduced business travel provide lessons for a sustainable supply chain.
Employee commute and business travel are decreased, which contributes to lower corporate carbon
footprints. As governments seek to re-establish their economy, they must help sectors that have been
adversely affected by the epidemic while simultaneously investing in new development areas. Improving
the investment climate and improving infrastructure will help to achieve these objectives. Investing in
digital skills will become more vital as digital transformation becomes more significant. Many of the next
issues will need strong collaboration between governments and companies.
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