Economic Policy Responses to COVID-19 of the Northeast Asia Countries

Abstract

Once at the epicenter of the original source of the coronavirus spread, the governments of China, the Republic of Korea and Japan introduced immediate administrative measures to isolate the population, which helped to effectively contain the spread of COVID-19 on their territory. The review shows that in the first half of 2020, due to policy of isolation in these Northeast Asia countries, there was a contraction of their economies. The subsequent dynamics of economic growth of the three Northeast Asia countries indicated structural differences in their economies. In the face of economic recession during a COVID-19 pandemic, the governments of Northeast Asia countries are applying stimulating economic policies, with Japan having the largest public spending with respect to its GDP, followed by the Republic of Korea and China. In China, the support for the economy is focused on fiscal policy measures, in the Republic of Korea – monetary and macro-financial policies, in Japan – a combination of policies’ various measures. In the context of a decrease in the coronavirus spread, mid-term estimates indicate that these three countries will be able to maintain positive economic growth rates while investment supporting of the green and digital technologies, including the support through the measures of economic policy. These support measures could have a short- and medium-term positive impact on the economies of the three Northeast Asia countries. However, for the purpose to localizing the pandemic in these countries large fiscal expenditures will contribute to the further growth of their public debt, thereby reducing the national savings rate, restraining the dynamics of their economic growth in the long term

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Discourse Analysis Fiscal Stimulus Policy During the Covid-19 Pandemic: Comparatives Study of Indonesia and Japan

“…In the context of decreasing the spread of the coronavirus, the medium-term forecast suggests that the State of Japan will maintain a positive economic growth rate while supporting green and digital technology investments, including support through economic policy measures. However, large fiscal expenditures will contribute to the further growth of the Japanese State's public debt, thereby reducing the level of national savings and restraining the dynamics of the economic growth of the Japanese State(Izotov, 2021). Employment opportunities in tourism and other industries are reduced by about a million, mainly affecting part-time and temporary workers.At the same time, the overall unemployment rate will barely exceed one-third of the average of general OECD countries due to sufficient financial support, long-termZein, M., H., M., Wurarah, R., N., Fatkhuri, Meiyenti, I., Kumorotomo, W., Purbokusumo, Y., Nalien, E., M., Agustina, I.…”