REGIONAL REVIEW
ALL EYES ON 2021 Tentative Hopes for Asia’s Sharp Recovery BY THOMAS TIMLEN
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rowth in the Association of Southeast Asian National, or ASEAN, region is expected to slow sharply to 2.2 percent in 2020 as a direct reaction to the pressure of Covid-19 on global economies, according to the Asian Development Bank, or ADB. With that somber 2020 projection in mind, project cargo and breakbulk players in the region may find solace in the ADB’s forecast of 6.2 percent growth rebound in 2021. But will that 2021 growth materialize? Not all stakeholders agree with the bank’s optimistic forecast. “The Covid-19 pandemic is causing volatility and uncertainty all over the world. Under the assumption that the various countries manage to restart their economies while handling the virus in a controlled manner, it should be realistic to expect a rebound of the regional and 20 BREAKBULK MAGAZINE www.breakbulk.com
global economy in the second half of 2020 and during 2021,” G2 Ocean’s vice president of project cargo, Leif Arne Strømmen told Breakbulk. He adds, however, that it is important to distinguish between project cargo belonging to capital investment projects and regular breakbulk, as the Covid-19 impact differs. Project cargo for capital investment projects are not directly linked to the changes in the ADB predictions. “These volumes will be directly linked to ongoing, planned and future capital investment projects, and are, in a greater extent, related to pricing of commodities like oil, gas, electricity and various minerals, in addition to planned investments into governmental infrastructure. For breakbulk not linked to capital investments projects, such as steel or aluminum to the automobile industry and other consumer-driven industries, there certainly are more direct implications reflected in the ADB predictions,” Strømmen said.
SLOW RECOVERY PROJECTED
For breakbulk, excluding project cargo, Strømmen expects to see a slow recovery in the market during the third and fourth quarters of 2020. “We are also expecting this to continue into 2021, depending on how the next three to four months develop.” In addition, he anticipates increased governmental capital investments into infrastructure to create new jobs, and new governmental capital investments into renewable energy to utilize the crisis to speed up decarbonization. As an example, the European Union has reshaped its Green Deal into a recovery package, with huge support for renewables, green hydrogen and electric vehicles. This is expected to have a positive impact on Asia and the involved manufacturing companies. Charles Zhang, marketing manISSUE 4 / 2020