December 20 – Omicron fear, RTO policy being reversed, conflicts, and more..

Our Key Messages

  • The Known Unknown – The omicron virus is still a topic that many people are not quite understanding it fully
  • Reversing The Opening Trend – Return to Office policy is being reversed throughout the world
  • Conflicts – Taiwan Straight, Ukraine, and South China Sea
  • Light in the darkness – Covid Pills and Booster Shot
  • Interest Rate – Up and Down

The Known Unknown – Omicron Threat

Omicron virus, the topic that is on decision maker’s mind. This new variant appears better able to break into cells and evade immunity, and seems to replicate faster in the airways than the Delta variant. While scientists across the world are still refining and augmenting their findings, the heightened transmissibility seems to be a consensus across the world.

While it has only been spotted just a month ago, Omicron virus is believed to have reached almost every country in the world. Different from Delta, Omicron is far more capable of infecting vaccinated people.  This leaves government across the world hardening their covid restriction policy. 

However , preliminary evidence suggested that Omicron is also far less deadly comparing with its predecessors.

1. Omicron and Health System

While Omicron does not seem to show serious death rate, it is indeed threatening the existing infrastructure of our health system.  Countries like UK and German was experiencing some ten thousands or even twenty thousand cases per day and with the Omicron situation, this will only get worse. 

Regions where vaccination remain low (less than 60%) are the most threatened with the Omicron emerging.  The bed itself is not enough to sustain the surge. There are also consequences to a health system locked up by Covid patients. There were still strokes, heart attacks and accidents coming in. (Two weeks after these interviews, a tornado struck the other side of the state, killing more than 70 people.) But hospital beds around the state were full, and transfers to other hospitals were nearly impossible.  Lori Coots, director of emergency services in Saint Joseph Hospital, said that at the height of the surge, Saint Joseph had patients waiting in the emergency department for days, on services the hospital did not have.

Not only the infrastructure, the human resources won’t be able to sustain another surge in Covid cases. Nurses from Saint Claire hospital are putting body into body bags themselves everyday according to the Bloomberg News. Polls conducted by Morning Consult have also shown that 18% of nurses are leaving their workplace because of pandemic and 79 percent of healthcare professionals said shortages have affected them and their workplace.

2. Governments are moving fast

Omicron was first reported to the WHO on November 24 in South Africa. This new variant was just first detected in  November 11. Two days later WHO named this variant Omicron and started urging government across the world to be cautious of the development of this virus.

This is much different comparing with the Delta variant which takes almost half a year until it gets its name.

So governments across the world are moving fast to either shutting down border or reversing some re-opening policy until we have better understanding of how dangerous is the Omicron variant.

  • South Korea’s return to normal life has come to a halt with fast-surging COVID-19 infections and local Omicron transmission even though South Korea holds an impressive 80% vaccination rate
  • Japan is probably the most cautious with its border control, shutting down the country from all foreign entry.
  • US also introduce new initiatives to keep Omicron from entering it by asking passengers to show proof of negative Covid test result.
  • Countries across EU are also introducing similar policy to suppress the infection of the variant.
  • With the Emergence of Omicron, China, the country with the most serious zero covid strategy is ever more confident with its approach and has laid out its plan to keep the status quo.

Reversing The Trend

Employers across the world has been screaming for office return. With with James Gorman as an example who famously told told conference attendees that he would be “very disappointed” if his workers hadn’t returned to Morgan Stanley buildings by Labor Day in June.

And this is understandable according to an aggregated research done by The Economist which collect 3rd party data from multiple countries. It shows that most managers don’t think working remote is more productive.

With employees having very different belief with their productiveness.

However, this is no longer a problem as most companies are letting their RTO date left blank as the Omicron variant emerging throughout the world. A late August survey of 238 executives, conducted by Gartner, found that two-thirds of organizations had delayed their return to office plans because of news about coronavirus variants. Apple, Ford, CNN and Google are just a handful of the employers that announced postponements, along with Lyft, which said the earliest that workers would be required to return to the office is 2023. 

  • Apple has announced it will ditch their return to office date during an internal memo sent out by the CEO
  • Google delayed its office re-openings previously set for January
  • Citigroup Inc, Goldman Sachs Group Inc, Carlyle Group Inc, Blackstone and MetLife among the latest finance companies to adjust plans as the Omicron variant of the coronavirus spreads.

Conflict Persisted

Conflicts between Taiwan and China, disputes over the South China Sea, Russia, potential turmoil in Ukraine, with all these happening, it almost seem that a world war III is imminent. 

1. Conflicts between Taiwan and China

Being the 20th largest economy in the world and one of the most technically advanced country, Taiwan’s economy is deeply tied to the world. However, with threats of unification coming from China, Taiwan’s capability of defending itself is being tested.

2. South China Sea

The dispute in the South China Sea has become militarily equipped as China is building military base in the region over the past decade. Now a potential conflict could emerge as US, UK, Australia, India, Japan, and Some EU countries are holding military drills in the region.  

China wants to increase its dominance in the South China Sea because it is a major trade conduit where one-third of the world’s shipping occurs. The sea is also rich in seafood and oil reserves.  

While military actions taken place in South China sea is far more likely than an invasion in Taiwan, the scope would not be as devastating.

3. Russia and Ukraine

Russia is yet again putting military force to Ukraine and use it as a leverage to negotiate deals with the EU and US.

Booster Shot and Covid Pill

Two reasons to keep a positive attitude toward 2022 are Covid oral treatment from Pfizer and Merck and the booster shots.

While the boosters surge to to all-time high amid fear toward the Omicron variant, the real game changer is the more and more available oral treatment for Covid.  However, the earliest does not necessarily imply its effectiveness.  Merck, the company that first started selling the oral treatments to governments across the world has downgraded its  Covid pill result. 

Trial data submitted to the US Food and Drug Administration (FDA) suggest that molnupiravir, an oral antiviral drug developed by Merck and Ridgeback Biotherapeutics, is less effective than originally thought. The results showed that the pill decreased the risk of hospitalization from COVID-19 by 30%, down from the 50% reduction observed early in the trial. 

An FDA advisory panel still recommended granting an emergency authorization for the antiviral by a 13–10 decision. Monoclonal antibody treatments, by contrast, reduce the risk of severe COVID-19 by up to 85% — but they are costly and need to be administered intravenously.

While Pfizer the already biggest winner in the vaccine development has finalized their study and hold a nearly  90% effective against the Covid.

Interest Rate Hikes.

Interest rate across the world is rising amid a potential inflation drive by the supply chain disruption and stimulus packages over the past almost two years.



The Federal Reserve could raise interest rates as early as March in the face of “alarmingly high inflation”, according to a senior US central bank official. Christopher Waller, a Fed governor, on Friday endorsed the central bank’s decision this week to accelerate how quickly it scales back its asset purchase programme so that the stimulus ends altogether several months earlier than initially outlined in November. The revised schedule would bring the stimulus to an end in March, soon after which the Fed should raise interest rates, he said at an event hosted by the Forecasters Club of New York.


Officials on the U.K. central bank’s Monetary Policy Committee voted eight to one to lift the BOE’s policy rate to 0.25% from a record low of 0.1%, saying the strength of the labor market meant higher borrowing costs were appropriate to keep a lid on price growth.

The move comes a day after the U.S. Federal Reserve set the stage for a series of rate rises in 2022, a major policy pivot that highlights growing concern over inflation. It also comes despite surging cases of the Omicron variant of coronavirus in the U.K., which the committee said could have unpredictable effects on the British economy.

South Korea

As early as three weeks ago, South Korea’s central bank has put up interest rates for the second time this year amid concerns over higher prices and rising household debt. The Bank of Korea’s quarter of a percentage point hike to 1% was widely expected by economists.


The Bank of Japan is not headed toward policy normalization like the U.S. and European central banks as its 2 percent inflation target is still far off and aggressive monetary easing needs to be maintained, Governor Haruhiko Kuroda said Friday.

Policy decisions by monetary authorities of other countries are based on their own economic conditions and will not immediately impact policies of the Japanese central bank, Kuroda said. Even if their rate hikes lead to a weaker yen, it will likely be “positive” for the Japanese economy under the current circumstances.


The president of the European Central Bank said it was unlikely eurozone interest rates would increase next year, calling the current rise in inflation a passing “hump”, but added that the ECB would act swiftly if needed to staunch the increase in prices. Despite eurozone inflation hitting a record high of 4.9 per cent in November, well above the ECB’s target of 2 per cent, Christine Lagarde said it was likely to have peaked and would decline next year.

The Author

Our Weekly Asia Economics & Insights Update is dedicated to help subscribers and insiders get insights behind our latest news.  We hope to inform, delight, and enrich you with our thought-provoking executive briefs.

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