NY, March 30, 2020.- Lately, in the middle of the mist of New York City, many unanswered questions keep on popping up in my mind. In less than a month, the Covid19 virus has locked up a third of the world’s population. To date, it has caused more than 40.000 deaths and over 800.000 infections. The good news is that far as we know over 165.000 patients have already recovered and if it holds true that 25% of the infected people don’t show any symptoms this figure increases to 430.000 people. On the other hand at the end of March another terrible record number: 3.3 mio people filed claims for unemployment in the USA. In my mind:
• In the fight against the Coronavirus, what should be the priority, preserving the health of the citizens at all costs, or preserving the economy from disaster so that when the crisis is over we can continue life and business as usual? Where is the balance?
• Most of the Western economic systems are sustained by workers and companies contributions through direct and indirect taxes in addition to other tariffs (importation, concessions, etc.). If the lockdown situation continues for much longer as it currently looks like, how are the countries and economies going to sustained themselves? Companies and workers will have to pay the bill.
• Is the Trump Administration Strategy the most appropriate for the current situation? A tweet from Trump as an example: “The United States will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the Chinese Virus. We will be stronger than ever before¡”.
• What will be the repercussions in the world’s economy?. How fast will we be able to recover from the imminent recession?
• Will a new era be born due to social distancing and having to learn to live with the virus. A new economy?.
• How deep will the States have to intervene in the economy? Public sector versus private sector?
Unfortunately I don’t have the right answers to these questions, but a serious analysis can help us to further understand reality.
BBC: Prime Minister Boris Johnson has said he believes the UK can “turn the tide” against the outbreak within the next 12 weeks and the country can “send coronavirus packing”. But even if the number of cases starts to fall in the next three months, then we will still be far from the end. It can take a long time for the tide to go out – possibly years. It is clear the current strategy of shutting down large parts of society is not sustainable in the long-term. The social and economic damage would be catastrophic. What countries need is an “exit strategy” – a way of lifting the restrictions and getting back to normal. But the coronavirus is not going to disappear. If you lift the restrictions that are holding the virus back, then cases will inevitably soar. “We do have a big problem in what the exit strategy is and how we get out of this,” says Mark Woolhouse, a professor of infectious disease epidemiology at the University of Edinburgh. “It’s not just the UK, no country has an exit strategy.” It is a massive scientific and societal challenge.
New Yor Times: Companies, in the absence of sales, have to fire their employees. Households that do not have sufficient income drop by drop on food. International investors are leaving so-called emerging markets at a rate not seen since the 2008 financial crisis, causing a decline in the value of currencies and forcing people to pay more for imported goods such as food and fuel. “It will be just as bad, or perhaps even worse, than the global financial crisis for emerging markets,” said Per Hammarlund, chief emerging market strategist at the SEB Group, a Stockholm-based global investment bank. “The outlook is bleak.” It is also a threat to the global future. Emerging markets represent 60 percent of the world economy in terms of purchasing power, according to the International Monetary Fund (IMF). A slowdown in developing countries translates into a slowdown of the planet.
Time: Dr. Bruce Aylward has almost 30 years experience in fighting polio, Ebola and other diseases, and now, he’s turned his attention to stopping the spread of COVID-19: “What it looks like is that we’re going to have a substantial wave of this disease right through basically the globe unless something very different happens in the southern hemisphere. And the question then is: What’s going to happen? Is this going to disappear completely? Are we going to get into a period of cyclical waves? Or are we going to end up with low level endemic disease that we have to deal with? Most people believe that that first scenario where this might disappear completely is very, very unlikely, it just transmits too easily in the human population, so more likely waves or low level disease. A lot of that is going to depend on what we as countries, as societies, do. If we do the testing of every single case, rapid isolation of the cases, you should be able to keep cases down low. If you simply rely on the big shut down measures without finding every case, then every time you take the brakes off, it could come back in waves. So that future frankly, may be determined by us and our response as much as the virus”.
Meanwhile, the Senate passed a landmark $2 trillion relief package for millions of Americans and businesses hurt by the coronavirus pandemic. The bill includes direct $1,200 cash payments to many Americans; $150 billion to help the healthcare industry; $500 billion for state and local governments and companies; and $350 billion in loans and assistance for small businesses.
And finally, an answer. The health of citizens comes first, but just as important is the health of companies that will later hire them. That is, at the same time that all public administrations are focused on ending the Coronavirus, we should be thinking about designing the company tomorrow. Analyzing how to revive each economic sector, subsidies, training and innovation programs, how to implement the latest technological advances with greater speed, etc. In short, not to return to yesterday’s normality, but to return to a new world with a new economy and competitive companies, prepared to face any uncertainty.