I was in Asia on vacation for the last two weeks of February. It gave me some insights into the broader economic impacts of the coronavirus outbreak that I thought would be instructive to share. What really hit home was how this virus, in addition to the concerning health implications, has had, and will continue to have, a very real impact on people in terms of their ability to simply make a living.


On my trip my wife, daughter and I visited Singapore, where my son is a university exchange student, and we then spent a week in Cambodia. We did have some nervousness with making the trip given the evolving COVID-19 issues, but the trip had been planned months in advance and our son was already there. Part of the concern arose from the fact that when we arrived in Singapore it had the second highest number of confirmed COVID-19 cases, but since then that number has only slightly increased. Current numbers of cases have been surpassed by France, Germany, Iran, Italy, Japan, South Korea, Spain and the United States.


As with most public-policy issues, Singapore’s response to COVID-19 has been characteristically swift and strong. We had our temperatures taken at the airport and at some of the shopping centers. In our hotel each day at breakfast our temperatures were noted and written down. My son has to file evidence of his temperature to school health officials twice a day; any gathering of more than 50 people is strongly discouraged; and lectures with more than 50 students have moved online. In addition, we noted that the Singapore Flyer Ferris wheel was turned off, and a show at Marina Bay Side was postponed to avoid attracting large crowds.

Although we appreciated the positive side effects from the reduction in tourism across Asia (lots of space on planes and our pick of the best tables at restaurants), its economic implications became more apparent when we visited a Michelin-rated street-food hawker. Usually there’s a three-hour queue to get his special Soy Chicken, but we simply walked up to the counter and ordered our meal — no queue. While the no-wait time was great for us, it wasn’t so great for the hawker, who has expanded his small business into a brick-and-mortar restaurant. The drop in tourists has clearly caused his revenue to take a serious hit. To its credit, the Singapore government has since noted a decline in growth expectations and opened discussions around how to help businesses financially impacted by the virus.

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Although we appreciated the positive side effects from the reduction in tourism across Asia, its economic implications became more apparent.
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Cambodia, at time of writing, only had one confirmed case of COVID-19. However, there is no doubt that Cambodia has been severely impacted by the virus from spillover effects. According to the OECD, Cambodia has seen strong annual GDP growth of 7.2% between 2011 and 2015, largely driven by tourism, which has enjoyed a tenfold increase.1 Again, our plane from Singapore to Cambodia was vacant, and very quickly we heard about hotels that were almost empty. Hotels reporting 60% occupancy were very proud of themselves. Tour operators and tourist transport organizations were getting very little work, in particular due to the drop-off in Chinese tourists. We used a private taxi to drive from Phnom Penh to Siem Reap, around a six-hour trip. The driver was very happy for the fare, since he had yet to pay off the taxi (an air-conditioned Lexus), purchased with a bank loan. With fewer tourists, he was less certain when he would get his next long trip.


Further fallout from the coronavirus scare registered after visiting Angkor Wat, the world’s largest religious monument and other temples in the region. After posting photographs on social media, a number of our friends asked, “Where were all the other tourists?” Although we had unobstructed views for taking pictures and no-wait lines, the lack of activity was clearly not so fantastic for the market sellers, “tuk-tuk” drivers and local restaurants who are finding it more difficult to make a living.


On balance, given the gravity of the COVID-19 situation in other regions of Asia, in Europe and the US, we were lucky and we had a fantastic holiday. So far, we have had no health issues (although out of an abundance of caution, I am working from home for the next couple of weeks). That said, my Mercer colleagues and I recognize with genuine concern the impact of the virus as it spreads, adding daily to the numbers of diagnosed cases and, sadly, deaths.


But another takeaway from my trip was seeing for myself the very real and immediate impact the pandemic is having on people’s livelihoods. In addition to promoting a coordinated health response, we cannot overlook addressing its economic impact on individuals, such as the one facing our Cambodian taxi driver. Economic spillover effects from COVID-19 certainly are not unique to Cambodia and Singapore, and I have little doubt we will see them ripple globally, including to the United States (in fact, reports of such are beginning). It’s well known that 40% of Americans are “liquid-asset poor,” meaning they don’t have enough money saved to cope with even a sudden disruption in income. Employers should explore paid leave and other measures to alleviate short-term financial pressures. Otherwise, we may continue to see an unwelcome growth in 401(k) or maybe predatory payday lenders.

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In addition to promoting a coordinated health response, we cannot overlook addressing its economic impact on individuals.
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Mercer has created a new dynamic microsite, www.mercer.com/coronavirus, that can help you stay abreast of new developments with the COVID-19 outbreak. In addition, you can learn what other business leaders around the world are doing from Mercer’s Global Survey: Coronavirus Impact Study.

There is no doubt that this pandemic is increasingly having a health as well as wealth impact on the organizations we work and associate with, and on all of us individually. Please stay safe and healthy.

Neil Lloyd
by Neil Lloyd

Partner, Head of DC and Financial Wellness Research, Mercer

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1 http://www.oecd.org/dev/asia-pacific/saeo-2019-Cambodia.pdf

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