ASEAN’s youth learns financial resilience during pandemic

Young people in Southeast Asia are learning about personal financial management and ways to increase their incomes in order to stay resilient against the COVID-19 pandemic, a recent study by the World Economic Forum (WEF) has shown.

The study, COVID-19 – The True Test of ASEAN Youth’s Resilience and Adaptability: Impact of Social Distancing on ASEAN Youth, showed that 58 percent of people aged 16 to 35 years old had learned better budgeting. Meanwhile, 56 percent learned about the value of emergency savings and 31 percent learned how to increase their income.

“It is a tough time and people want to be prepared to face the uncertainties. So, they learn more about conserving and managing cash, as well as ways to save for rainy days,” said Santitarn Sathirathai, group chief economist from Sea, a Singapore-based global consumer internet company that conducted the study along with the WEF.

He went on to say that 31 percent of respondents also found new business models and new ways to improve income. The trend is especially true for entrepreneurs aged 26 to 35.

Young people are the fastest growing investor group as the number of investors aged 18 to 25 grew by 338.61 percent from 2016 to May 2020, according to data from the Indonesian Central Securities Depository (KSEI). Meanwhile, the number of investors aged 26 to 30 grew by 204.97 percent.

The WEF survey, which was conducted in June, also found that 64 percent of full-time students and 38 percent of active workers used online educational tools more actively during the COVID-19 pandemic.

“For students, I think it is to be expected that they use online learning, but workers were also willing to learn new skills. It really shows a growth mindset among ASEAN youth,” Sathirathai said.

However, he added that 69 percent of respondents said that they found it difficult to work and learn from home, including 7 percent of whom said it was impossible. The study noted that the main reasons were poor internet quality, high internet cost and household distractions, among other problems.

People who are living outside the capital city and those with a below-college education were also far more likely to face difficulties with remote working or studying remotely during the pandemic.

In Indonesia, 29 percent said that they found the internet expensive, but 43 percent said they had a good quality connection. Meanwhile, the survey pointed out that young people in the Philippines and Vietnam experienced the most difficulties.

Sathirathai added that young entrepreneurs and youth working in the gig economy faced funding constraints caused by COVID-19.

According to the survey, only 33 percent of those who faced funding constraints said they relied more on bank loans, while 31 percent relied on government support and 23 percent turned to online financing.

“This is an opportunity for a public-private partnership to solve the funding gap. Youth need the funds to pay for their education, for taking care of their families and for entrepreneurs, to strengthen their businesses,” Sathirathai said.

Similarly, ASEAN Socio-Cultural Community deputy secretary-general Khung Poak said that member states needed to roll out government support or stimulus programs especially for small and medium enterprises (SMEs).

He also suggested community-based learning to tackle education inequality during the pandemic especially in areas where people did not have stable access to the internet.

Meanwhile, Research and Technology Minister Bambang Brodjonegoro said that Indonesia still needed to finish its middle and last-mile internet connectivity infrastructure to provide stable and quality internet connections throughout the archipelago.

“However, such a task needs large investment and time to be completed,” he said. “One short-term solution to provide better connectivity is to use the existing telecommunications satellites, but the government needs to ramp up frequency slots to do so.”

Studying from home has become an increasing burden for students, teachers and parents alike especially in remote places in the country, which threatens to exacerbate the already endemic education inequality in Indonesia.