BIMP-EAGA Countries Cautiously Reopen to a New Normal

After months of fighting the pandemic, countries in Southeast Asia are easing restrictions and stepping up efforts toward economic recovery, including in the BIMP-EAGA subregion.

On 4 June, ASEAN economic ministers adopted the Ha Noi Plan of Action to counter the economic impact of the coronavirus disease (COVID-19) pandemic and restore supply chains, particularly for important goods such as food, medicines, and vaccines. They also welcomed the business community’s proposal to break down non-tariff barriers and streamline and automate customs procedures, among others.

ASEAN has taken a united stance against the pandemic, reiterating the importance of regional cooperation in curbing the spread of the disease at the virtual 36th ASEAN Summit on 26 June. BIMP-EAGA is part of ASEAN and was formed by Brunei Darussalam, Indonesia, Malaysia, and the Philippines to spur development in remote and less developed areas. The four countries earlier announced national measures to mitigate the impact of COVID-19.

Domestic and international travel

On the island of Borneo, which is part of BIMP-EAGA, some transport services have resumed. For example, the state of Sabah on the northern part of Borneo lifted restrictions on travel from peninsular Malaysia, Sarawak, and Labuan by air, land, and sea on 2 June. Sarawak was the first to allow flights to and from the peninsula at full capacity after the country lifted its interstate travel ban on 10 June. More flights and travel options to the Indonesian part of Borneo are also expected as the country removed the 50% limit on seating capacity for land, air, and sea transport.

Royal Brunei Airlines, however, has continued to suspend its flights to Borneo destinations, offered in partnership with Malindo Air, until 30 November.

Malaysia is looking at reopening its borders to six countries with low active COVID-19 cases, namely, Australia, Brunei, Japan, New Zealand, Republic of Korea, and Singapore. The Sabah State Government has decided to allow foreign traders and investors to enter the state on 25 June.

Indonesia is reopening key destinations to local tourists in July and plans to welcome back foreign tourists in September. These include tourist destinations in BIMP-EAGA subregion, such as Lake Tambing in Central Sulawesi and Wakatobi in Southeast Sulawesi province. The government is putting in place standard procedures under a “new normal” for tourist and other public facilities, which will include health and hygiene protocols.

The Philippines is focusing on the domestic market to jumpstart the travel and tourism industry. It is preparing to reopen major destinations, including Palawan, a top ecotourism destination in the subregion.

Expansion of freight transport

In the meantime, the Philippines wants to expand direct shipping services in the subregion. Its Maritime Industry Authority (Marina) is allowing domestic ships to ply BIMP-EAGA routes to boost trade with the subregion. Marina will issue special permits for the temporary deployment of these ships for international trade and enter designated gateway ports in the subregion.

Indonesia’s Angkasa Pura Logistics launched air freight services in June to nine cities, which include Banjarmasin in South Kalimantan and Makassar in South Sulawesi. The subsidiary of state-owned Angkasa Pura I is targeting areas that cannot be served by commercial airlines, which are struggling to cope with the COVID-19 crisis.

Recovery measures

Other initiatives in the subregion were recently rolled out to reboot local economies.

Sabah has unveiled the second phase of its COVID-19 assistance package, which will support the transition to a digital economy, private sector development, and the agrofood sector. It includes strengthening the value chain and logistics, developing an e-commerce platform, financial assistance to small businesses and farmers, and measures to boost tourism. In particular, Sabah wants to help farmers, fishermen, and entrepreneurs to get into the export market.

Earlier, Sarawak also announced its second economic stimulus package to help micro, small and medium-sized enterprises (SMEs), which account for more than 75% of its business sector and 20% of the state’s gross domestic product.

Brunei Darussalam and Indonesia have also turned to e-commerce as one of the strategies to stimulate economic activities. Brunei announced its 5-year digital economy master plan, which lists 17 projects and includes a national business service platform and halal certification system. Previously, it launched an online portal, eKadaiBrunei, that offers a list of products and services and promotes e-commerce as a safe and convenient way to do business during the pandemic.

Indonesia is targeting to get two million SMEs from across the country to join the digital economy this year. The government has partnered with e-commerce platform Lazada to train entrepreneurs in digital marketing and retailing.

Under its Making Indonesia 4.0 program, the country recently added pharmaceutical and medical device industries to increase their productivity using digital technology solutions. The pandemic has highlighted the importance of securing medical supplies during emergency situations.

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