Imperialist pressures on Southeast Asia to free up supply chains, amid COVID disaster
As they battle some of the world’s worst COVID-19 epidemics, countries in Southeast Asia are under pressure, from imperialist powers and manufacturing conglomerates, to remove COVID-control measures. 19 and liberate crippled global supply chains.
An article in Fortune on September 13, said Vietnam, Malaysia and Singapore have realized “that they can no longer afford their strict COVID control measures.” While low vaccination rates make many people vulnerable to the Delta variant, their “strained” public finances and the “firepower of declining monetary policy” mean that the lockdowns are “less sustainable by the day”, intoned the magazine.
As governments have started to roll back protective measures, finance capital and big business are making sure they realize the need to ‘open up’. In what amounts to a threat, Fortune said it is essential to address blockages in the global supply chain “to avoid dampening the appetite of foreign investors for the dynamic region”.
Amid escalating geostrategic tensions, Washington is preparing an offensive to control essential resources. The “Quad” meeting of leaders of the United States, Australia, India and Japan last weekend, chaired by US President Biden, pledged to strengthen the “security” of the channel supply for semiconductors, components and software, to reduce dependence on China, as part of war preparation.
An article in Forbes Sept. 12 described semiconductors, which are vital to military equipment, as “the most essential physical resource of the 21st century,” and warned that the struggle for access to semiconductors is foremost ” economic factor “that could trigger a war between the United States and China.
Currently, the uncontrolled spread of the Delta COVID-19 variant is leading to shortages of semiconductors and computer chips, disrupting production and pushing up the prices of cars and electronics, with a growing impact on the global economy.
A wave of COVID-19 cases in Vietnam and Malaysia has contributed to the shortage of computer chips and vehicle parts. Toyota, the world’s largest automaker, said it was cutting production for September from 900,000 units to 540,000. Other automakers, including Ford, General Motors, Jaguar Land Rover and China’s Geely, had to reduce production at factories in Europe, Japan, the United States and China.
The threat to profits is significant. The WSWS reported in April that the global auto industry could see revenues fall by $ 61 billion in 2021. Ford expects closures to cut profits by $ 1 billion, from $ 2.5 billion in the first half, while GM revealed pre-tax profits could be hit by $ 2 billion. The global chip shortage will last for at least another year, according to Flex, one of the world’s largest electronics contractors.
The the Wall Street newspaper reported on September 17 that the surge in COVID-19 cases had also ‘strangled ports’ and locked down plantations and processors, causing prolonged disruption of raw materials including palm oil, coffee and tin .
The Delta strain has become endemic in recent months, with the daily death rate in many countries in Southeast Asia exceeding the global average. There is growing pressure from big business to resuscitate profits, treating COVID-19 as rampant and forcing the homicidal policy of “learning to live with the virus”.
Singapore, a global trade and travel hub, ranks among the most vaccinated, with more than 80% of the population fully vaccinated. After closing its borders in March 2020, Singapore entered the deepest recession in its history, with the government spending $ 100 billion, or 20% of GDP, to support the economy.
However, despite the high vaccination rate, there has been a resurgence of the virus. As of September 25, Singapore reported 1,443 new cases of COVID-19, the fifth day in a row, new infections have exceeded 1,000, bringing the total to nearly 86,000 cases. And there have been 21 deaths so far in September, a new monthly record.
Malaysia and Vietnam, which play a vital role in the production of electronic components, as well as the packaging and testing of components, used in everything from vehicles to smartphones, are facing their worst epidemics since the start of the pandemic.
Vietnam has become an increasingly important part of the technology supply chain, with companies from Samsung Electronics to Apple’s suppliers relocating from China, amid rising costs and business and geopolitical risks. At the start of the pandemic, Vietnam remained largely open, allowing Intel to increase production volume by 30%, in the first half of 2020.
From April, however, the government imposed strict closures to contain the new delta surge, with strict stay-at-home orders in Ho Chi Minh City and Hanoi. Samsung was forced to cut production at one of its large electronics factories, after an epidemic sparked housing demands for thousands of workers at the industrial complex.
The Commerce Ministry has warned that Vietnam is at risk of losing foreign customers due to the closure of factories. The European Chamber of Commerce in Vietnam estimated that 18% of its members have relocated some of their production to other countries, in order to ensure their supply chains are protected, and more are expected to follow.
Bloomberg reported that the new rules had “pissed off exporters” as the lockdowns impacted manufacturers and businesses, but did not stop the spread of Delta. Vietnam is now testing a limited target lockdown strategy, which has seen Hanoi institute travel checkpoints as authorities vary restrictions based on virus risk in different areas of the city.
Vietnam, however, is reporting record infection rates, with new cases averaging 7,950 per day and deaths reaching 360 per day. A total of 263,543 infections were reported in one month, according to Johns Hopkins. Vietnam has recorded 747,000 cases and more than 18,000 deaths.
The epidemic has severely affected Vietnam’s health system. Only 7.5% of its population is fully vaccinated, while 30% of the 98 million people have at least one vaccine. The slow deployment of vaccines is due, in part, to the fact that rich countries collected the majority of the initial vaccine supplies.
In Malaysia, COVID-19 infections are also skyrocketing. The country recently imposed its fourth lockdown, as it has reported consecutive daily records of coronavirus cases. Malaysia has one of the highest per capita infection and death rates in the world. New daily infections currently stand at nearly 16,000, with a total of 2.17 million cases. The death toll rises to more than 25,000.
More than 50 international chip suppliers operate manufacturing plants in Malaysia, which is also home to semiconductor conditioning and testing facilities. The global supply of tin, used to connect computer chips to printed circuit boards, has been hit by disruptions at a major foundry in Malaysia. Tin exports fell 29 percent in June from the previous year. The restrictions have also prevented migrant workers from entering Malaysia’s plantations, raising the prices of widely used palm oil.
With Malaysia’s 2021 growth forecast to be halved to 3-4%, companies have been allowed to continue operating, with 60% of their workforce, during partial shutdowns. Overcrowded factories and dormitories of workers have become major transmission sites for the virus. Companies will now be able to fully resume their activities, when more than 80% of their workers are fully vaccinated. Meanwhile, vaccines are directed to economically vital regions, rather than poorer residential areas.
Indonesia, with the region’s largest population, persists as an epicenter of infections and deaths. However, in the capital Jakarta, a drop in the number of cases to 2,500 per day from 50,000 saw the authorities remove the status of “red zone” and partial closures in many areas of the city and declare the disaster over.
Thailand announced last month that it would move from a zero COVID strategy to one that tolerates the virus, amid its own wave of new infections and a lagging vaccination campaign. More than 1.5 million people have been infected with more than 16,000 deaths, mostly since April. The government has lifted most of its limited lockdowns, in a bid to revive tourism and manufacturing.
Under conditions of worsening poverty and a public health catastrophe, broad political opposition erupts. In Malaysia, Prime Minister Muhyiddin Yassin was forced to resign last month. The government’s inability to contain the virus, coupled with the deepening economic and social crisis, fueled protests by young people and a strike by overworked junior doctors.
Street protests against the Thai military-backed regime, predating COVID, have turned into rallies linked to the pandemic. The latest wave of protests began at the end of June and has intensified over the past two months, despite police crackdown. More than 10 protests were forcibly dispersed last month.