Here in Hong Kong, I qualified early to get a COVID-19 shot since I moonlight as a personal trainer when I'm not covering Asian markets for you guys. After some initial hesitation at getting a new vaccine, I got the jab, swayed by an outbreak at a gym here that's popular with expats. Infecting my training clients would be a disaster.
My wife, on the other hand, is staunchly anti - this vaxx. It's too new and untested, she says. Plus during the last election cycle, her favorite Hong Kong YouTubers, who are skeptical about the Chinese Communist Party, directed her to a lot of Communist-critical content from social media influencers in the United States. Both they and my wife were fervently pro-Trump, at least until he lost. After that defeat, they somehow morphed into major vaccine doubters. Point out that Trump himself got the vaccine and they will tell you that, "No, he did not." It's all Mainstream Media spin, they insist.
It's exactly this kind of vaccine stubbornness (I think we're well past "hesitancy") that's now hard to fathom. There are 4.0 billion doses in arms now. While severe side effects grab headlines, and certainly warrant watching and treatment, few of those 4.0 billion arms have fallen off, or caused second heads to sprout. Deaths and hospitalizations from COVID descend quickly once a high share of the population gets COVID-19 covered.
There are two elements for investors to watch in Asia, as the continent contends with rolling waves of COVID infection. The first is vaccine availability, which is poor in poor nations. The second is vaccine resistance, not medical but personal, and anti-social. Either way, countries that get high levels of coverage will emerge first economically.
Malaysia (51 cases per 100,000) and Mongolia (40) currently have the worst infection rates per capita in the region, double the rate in the United States (22) or Brazil (21). For raw infections, Indonesia had been leading the world (a daily average of 42,552 cases), surpassing India (39,897), though the United States (71,621) and Brazil (45,094) have suddenly shot to the top again.
An outbreak in Thailand is frustrating attempts to open up borders in a nation that gets 20% of its economy and 20% of its jobs from tourism, per IMF figures. That's debilitating. The resort island of Phuket is a "sandbox" greeting vaccinated tourists without quarantine. But the 125 cases reported there last week, mainly Thais returning from high-risk provinces, rose above the 90-case threshold set by the government.
In South Korea, cases are currently at record levels. Japanese COVID cases are up 164% in the last two weeks. Singapore has seen infections spike. Even China, which has clamped down so harshly when cases emerge, is struggling to contain various outbreaks, most notably in the former capital city of Nanjing.
All flights have been grounded into or out of Nanjing, there are checkpoints on all ground travel, and the entire 9.3 million population is going to have to undergo a second round of mandatory testing. It's the third Chinese outbreak of the Delta variant first discovered in India, after a cluster in Yunnan Province next to Myanmar (which sits in between India and China). There was another infection flare-up in Guangdong Province, across the border from me in Hong Kong, in May and June.
Cambodia has a curfew. Macau is telling its citizens not to go outside the city's borders, and is desperately trying to protect its casino business by bringing back quarantines and border controls for travelers from infected parts of China.
Philippines President Rodrigo Duterte, always outspoken and occasionally deranged, first said he would throw anyone who didn't get vaccinated in jail. Now he says vaccine resisters should be detained in their homes by local officials and village chiefs. Neither command would be strictly legal. He knows it, but feels there should be some urgency. Manila looks about ready to enter a hard lockdown.
These are the clearly identified clusters. We know infections are really bad in Myanmar, where the military dictatorship is hoarding vaccines and oxygen for army officials. The local U.N. special rapporteur says the country could become a COVID super-spreader state. No one knows how many have died, but there are lines for three things: ATMs, oxygen and the morgue.
We guess that it's really bad in North Korea, too, where Kim Jong-un suddenly lost a suspiciously large amount of weight and said in public that failure by his officials to stop the spread of COVID-19 had caused a "great crisis." The tiny economy may have shrunk as much as 20%, according to Jim Byeong-yeon, an economics professor at Seoul National University. With the borders closed to China and South Korea, the north faces its worst challenge since a 1990s famine that killed 3 million people.
Some of the above nations simply don't have enough vaccines. In other cases, there's very variable government effectiveness at getting doses out to the public. Official bungling has delayed the injection pace in Japan and South Korea, and there's finger-pointing in places like Thailand for not ordering doses early. In developed Asia, there's significant resistance to getting doses even when they're freely available.
Sure, people can choose whether or not to get the shot. Other people, however, can expect their fellow members of society to do everything they can to avoid infecting them. When we drive, we reasonably expect people to stay on their side of the road, even though they are free to "drive everywhere."
Emerging Asia will struggle to hit significant vaccine rates anytime soon. But even the response they have mustered has occasionally been off-target. Indonesia has had some of the laxest social restrictions in the world, never entering a significant lockdown. Now its economy, in the area that Nomura covers, will be the only country to post lower economic growth in 2021 than in 2019.
Mongolia leads the region in its vaccination rate, with 61% of its population fully covered. So it is one of six countries currently experiencing both high vaccination and high infection rates. Five rely on Chinese vaccines, with the other the United Kingdom, contending with a Delta spike.
Even Singapore, with 55% of its population fully vaccinated, is experiencing a small spike in infections. Of serious cases requiring hospitalization in the last month, 76% were of unvaccinated people, the rest people with one dose, and none from people who are fully covered.
Hong Kong and Singapore, very similar cities in many ways, have been trying to set up a "travel bubble" for quarantine-free journeys for vaccinated people. These have been scrapped several times due to infection spikes. Both cities are tiny. If either is going to open its borders, it will need very high vaccination rates. As it stands, even having plenty of doses does not ensure you'll be in good enough shape whether you look at the economy, social conditions or lifestyle.
Hong Kong has had enough vaccine doses to inoculate the entire population of this 7.4 million-person city virtually from the first moment they became available. Yet, months later, only 31% of residents are fully vaccinated. We have a choice of the Pfizer (PFE) shot or the Chinese-made Sinovac shot. It doesn't make much difference.
Even the chance to win a HK$10.8 million (US$1.4 million) apartment, the vaccine-raffle top prize from Hong Kong developers Sino Land (SNLAF) and Chinese Estates Holdings (CESTF) , isn't swaying those standing on the sidelines. There's another HK$5 million (US$643,000) prize to put toward an apartment from Li Ka-shing's CK Asset Holdings (CHKGF) , part of a long list of private-sector incentives to get vaccinated.
Cajoling vaccine deniers won't accomplish much. But peer pressure is a powerful thing. Yes, people have the right to resist a vaccine. You don't have to take part, to do your part. Equally, companies, restaurants, airlines also have their right to turn you away.
If you make that choice, you may have to accept that society wants, needs to get on with its business around you. Without you.