5 Key Sectors Can Boost Post-Pandemic Recovery in Southeast Asia

A study shows targeting support to tourism, agro-processing, garments, electronics, and digital trade can help ensure strong recovery from COVID-19.


Economies around the world experienced a setback because of the COVID-19 pandemic. In Southeast Asia, measures to control the spread of the virus adversely affected domestic and external demand in consumer-driven sectors, such as retail, accommodations, and food services. This has highlighted the need for structural reforms to support sustainable economic recovery.

An analysis of different sectors, their potential for future growth, and the strengths of countries in the region showed that support for five key sectors is essential for sustainable economic recovery. The well-established tourism, agro-processing, and garments industries need to be improved while more attention should be placed on the evolving electronics and digital trade sectors.

This article is adapted from Asian Development Bank’s Supporting Post-COVID-19 Economic Recovery in Southeast Asia, which provides a high level summary of the analysis of the five sectors. This publication recommends policy actions that could help these sectors recover from the pandemic and ensure sustainability over the long term. More detailed nuances can be found in a report that will be published within the year.


Southeast Asia’s tourism industry saw impressive growth with tourist arrivals of almost 144 million in 2019 from only 37 million in 2005. Interest in the region’s history, culture, and natural landscapes was boosted by low-cost air transport, rising incomes, and targeted tourism investment. However, COVID-19 and pandemic-related travel restrictions halted the robust growth in the sector. Foreign visitor arrivals in 2020 dropped by 50% to 80%, with some declining by almost 100% in some popular destinations, like Bali in Indonesia.

As the tourism sector reels from the devastating impact of the pandemic and moves toward recovery, it will likely put more emphasis on health and hygiene, proximity tourism (domestic and short-haul international travel), and environmentally sustainable tourism.

Recommended policy actions

  • Restore demand by developing domestic marketing campaigns and improving coordination of procedures to reduce information gaps.

  • Build new channels of demand by developing more tourism destinations, including areas for ecotourism and coming up with policies on halal certification and facilities.

  • Build capacities to support future demand by providing digital and non-digital skills development and leveraging new technologies.

  • Increase industry resilience by improving communication channels between the private sector and the government and creating a permanent crisis management task force.


The share of agriculture in Southeast Asia’s gross domestic product has been decreasing, but it remains a major employer in many countries in the region. Challenges that hindered growth in agro-processing even before the pandemic include inconsistent supply of raw materials and low level of automation and technological adoption. COVID-19 exacerbated these challenges. Travel restrictions and closed borders shifted demand for food and beverage products to domestic markets, disrupted supply chains, and increased food protectionism policies.

Although the pandemic had less impact on the agriculture industry than on other sectors, it highlighted the need to shift focus to value-added activities, such as agro-processing.