Quarantine-free travel in Southeast Asia is unlikely anytime soon, but regional countries can double efforts to move travel bubbles into bigger travel balloons.
While financial markets responded strongly following emergency use authorisation of various Covid-19 vaccines in several countries, the economic impact will take much longer to materialise. One reason for this is that turning vaccines into vaccinations in large numbers will take time. There is uncertainty over whether those vaccinated will still be infectious, although they would likely be immune from the disease. Combined with a host of other uncertainties, quarantine-free travel is unlikely anytime soon. Therefore, waiting for an unpredictable and prolonged process to play out before opening borders is inefficient and costly. The next steps are to turn unilateral air travel passes into reciprocal ones, or travel bubbles, and then to turn these bilateral bubbles into multilateral ones, or travel balloons.
Air travel passes build upon travel corridors or “green lanes”, which allow travel with testing but without quarantine for select groups like businessmen under strict conditions, such as pre-arranged itineraries. To have a significant impact on the economy, however, air travel passes unilaterally extend these terms to all travellers. In ASEAN, Singapore has been leading the effort in pursuing air travel passes with partners that have controlled community transmission. These include Australia, Brunei Darussalam, several cities in China, New Zealand and Vietnam, and from 18 December, Taiwan.
There are various other bilateral travel arrangements in the region that have been operating successfully. To move them forward, the first step is to expand their coverage to turn them into unilateral air travel passes, and then to get partners to reciprocate to create travel bubbles. For this to happen, perceptions of health risks associated with opening borders need to converge across countries. Some governments need to overcome an inherent bias against opening borders. That is, even when differences in infection rates suggest that inter-country movement is less risky than intra-country movement, borders remain mostly closed while easing of domestic movement continues. The factors underlying this bias need to be addressed before travel corridors can be upgraded to travel passes, and then travel bubbles.
Following that, and to avoid replacing a proliferation of travel passes with travel bubbles, a consolidation of these bilateral arrangements into a regional one – a travel balloon – could be pursued. For instance, the Singapore-Vietnam or Singapore-Brunei travel pass arrangements, once successfully upgraded to a bubble, could be pilot-tested to include other countries with similar or lower infection rates. It could start by consolidating the two, so that travel between the spokes, Brunei-Vietnam, as well as with the hub, Singapore, is quarantine-free. It could then be progressively expanded to include Cambodia, Laos and Thailand, for instance. An expanded travel bubble, or a travel balloon, involving up to six ASEAN countries – Brunei, Cambodia, Laos, Singapore, Thailand and Vietnam – could magnify the economic benefits without significantly raising health risks, if implemented according to a plan.
The plan should involve harmonisation of Covid-19 screening and quarantine protocols to preserve the integrity of the risk mitigation controls across countries while facilitating seamless movement to reap maximum benefits from the increase in scale. Harmonisation should prevent distortions similar to trade deflection in a free trade agreement (FTA), where the integrity of the system is compromised through entry via the “back door” country with the least stringent set of controls or requirements.
The plan should involve harmonisation of Covid-19 screening and quarantine protocols to preserve the integrity of the risk mitigation controls across countries, while facilitating seamless movement to reap maximum benefits from the increase in scale.
Protocols such as exemption of quarantine needs to be mutually recognised across participating countries to avoid duplication and to encourage movement between them. Mutual recognition should increase both intra- and extra-regional flows. For example, a tourist travelling from Europe to the six-country travel balloon must undergo a two-week quarantine period in Thailand; that said, he or she is more likely to also visit Cambodia, Laos or Vietnam, if the quarantine does not have to be repeated in each country. The deterrent effect of a two-week quarantine is reduced when it enables travel to more than one country in the region.
An ASEAN-wide travel balloon is unlikely at this stage because of significant differences in infection rates. It is unlikely that countries that have controlled community transmission will recognise quarantine periods undertaken in countries that have not. The ASEAN countries that have higher infection rates could, however, chose to recognise the quarantine observed within the 6-country travel balloon, even if reciprocity is denied them. Even without reciprocity, these countries could benefit economically because they could receive a larger number of travellers on a relatively safe basis through the one-way arrangement.
The agreement should include an open accession clause, which would allow new members to join if health conditions in the country change in a way that meets those specified in the agreement. Similarly, the agreement should enable the suspension of members should health conditions deteriorate to an extent deemed unsafe for quarantine-free travel. The recent deferment of the Singapore-Hong Kong travel bubble attests to the ability of such arrangements to have built-in safety clauses that kick-in as soon as circumstances warrant.
Once set up, the institutional mechanism can help deal with emerging issues, such as vaccinations, on a consistent basis. While countries may differ in terms of how and when they chose to recognise vaccinations, let alone different vaccines, these issues need to be addressed in a way that does not deter travel in the short term, while harmonisation is pursued to narrow differences in the longer term. A well-functioning travel balloon could do that.
The potential that travel balloons present in opening up travel in the region to hasten the transition to a new normal is clear, but needs to be done gradually yet expeditiously. A cautious and incremental approach will enable such balloons to give a fillip to economic growth, yet have enough safeguards that will kick in should infections head north again.
Jayant Menon is a Senior Fellow at ISEAS – Yusof Ishak Institute. He was formerly Lead Economist in the Office of the Chief Economist at the ADB.