As of last week, the novel Covid-19 virus is present in 185 countries and territories. According to Johns Hopkins’ Global Case Tracker, there are 1,699,019 confirmed cases of the infection. 376,976 of these cases have recovered from the virus and about 102,782 people have died.
There is no doubt that the virus has, and will continue to, cause large scale socioeconomic disruption in every economy it is present in. Governments around the world are racing to impede the spread of the virus and most have invoked special powers altering their legal framework in order to enact emergency legislation as needed. For example, the UK enacted new legislation allowing for the imposition of several ‘lockdown measures’.
Other countries have declared a state of emergency as they come up with measures to combat the virus and adopt new economic policy measures to address the short term and long term implications that these ‘lockdowns’ will cause.
The lockdown has acted as a dampener to business activity all across the globe. While developed countries are able to introduce stimulus packages worth trillions of dollars like the US, developing countries are incredibly short-handed with the resources to provide the majority of their population relief. In addition to that, since a large part of their population is dependent on daily wages, being unemployed for them poses a terrible dilemma: suffer by staying at home and not having the means of survival or go out and risk your life? These nuances have led to different approaches by governments in dealing with the virus.
The other differences in policies can also be attributed to the reaction times of different governments. While countries like New Zealand acted very quickly, others like the US were very late to respond. Such factors lead to very different consequences even if all countries implemented the same policies. Let us have a better look at evaluating different government responses to the pandemic.
The first case of the virus has been traced back to have emerged in November 2019 in China. However, it was not until 31st December 2019 that the WHO was informed and China started adopting measures to control the spread of the virus.
A lockdown was implemented in Wuhan which affected around 57 million people. The lockdown called for strict measures including travelling restrictions, suspension of businesses, bans on private vehicle use and physical distancing measures. Later the lockdown was expanded and is said to have restricted the freedom of about 760 million people. Although these measures were controversial at the time, in retrospect, experts believe these were essential in helping the spread of the virus.
As the virus entered its global phase, the authorities completed the construction of Huoshenshan Hospital within 10 days. Leishenshan Hospital was constructed shortly afterwards and 14 facilities in Wuhan were converted into temporary hospitals. About 6000-8000 people were tested for the virus on a daily basis although only patients who were experiencing a number of symptoms could qualify for the test. Moreover, these tests were provided by the government and free of any charges.
An estimated fiscal package of RMB 1.3 trillion is being implemented in China for procurement of medical equipment, tax relief and disbursement of unemployment benefits.
New monetary policies are also being implemented that will provide financial relief to companies and households via liquidity injections, credit extensions and lower interest rates.
The WHO has lauded these bold efforts as the number of cases decline and significantly flatten the ‘curve’ which essentially means a decline in the rate of new infections. This will allow for a less stressed health care system and greater testing and treatment capacity.
The first confirmed case of the virus emerged in January 2020 in Washington and prompted the formation of the White House Coronavirus Task Force followed by a declaration of a public health emergency. The US has been criticised and said to have responded too slowly to the outbreak of the virus. Even though the Center for Disease Control announced they had come up with their own test kits, many of these were found defective. This, coupled with the federal government’s lack of approval for non-government test kits, significantly delayed testing and early detection of the outbreak. As of now, the US is only second to Italy in the number of deaths caused by the virus and a total number of 469,121 confirmed cases.
A number of cities in the US have imposed lockdown measures limiting the mobility of people, shutting down business and closing schools. The degree to which these cities are ‘locked-down’ varies largely according to the number of confirmed cases. Some cities have been advised to stay home and avoid social interaction whereas in some cities only ‘essential’ businesses and jobs can be conducted normally.
The authorities have also invoked new legislation and policies to help flatten the curve of the outbreak and help control the economic consequences of the distancing measures. The Trump administration has also invoked the Defense Production Act, effectively halting the sale of locally produced medical equipment to anyone other than the government. Some companies have taken emergency steps to help overcome these medical shortages. General Motors shifted production to manufacture ventilators while other companies are turning to manufacturing hand sanitisers and face masks.
According to the IMF’s list of economic policies , the US has approved a $2.3 trillion bailout package that will provide relief to people affected by Covid-19 and help stimulate the economy out of recession. Unemployment benefits have been increased and direct checks for lower and middle-income families will be provided. For corporate entities, $500 billion will be made available to borrow and interest rates have been slashed by the central bank.
By February 2020, South Korea had about 3,150 confirmed cases of Covid-19. Till then, it had been using technology to help control the spread of the virus. Credit card data, phone history and CCTV footage were used to track patients, quarantine them and inform their close contacts. However, after a sudden jump in cases, South Korea revamped this system and introduced new measures to control the outbreak.
South Korea started developing test kits early and introduced a system of mass testing, using drive-thru and ‘phone booth’ testing. This allowed the country to create a testing capacity of 20,000 people a day. This strategy allowed it to flatten the curve without imposing nation-wide lockdowns and curfews. Experts agree that South Korea’s response to the pandemic has been exceptional, bringing the country back to some level of normalcy after once being declared the second-largest hub for the virus. Impressed by these measures, the US has requested medical aid and spare testing kits from South Korea.
Along with a well-planned governmental response, South Korea also experienced a solid response from the general public, as people started practising social distancing early on without being strong-armed into it. The government did, however, revise the anti-infectious disease law to deal with violators of quarantine by imposing fines or jail time.
The South Korean government has introduced a rescue package worth 100 trillion won ($80 billion) in order to save companies from bankruptcy and laying off staff via loans and bond-buying agreements.
The UK government has been heavily criticised by the public for a slow and relaxed response to the deadly pandemic. The first cases appeared in late January and as of now, there are a total of 65,872 confirmed cases and 7,978 deaths according to Johns Hopkins’ Global Tracker.
As new cases emerged in February, the Secretary of State for Health and Social Care was prompted to introduce the Health Protection (Coronavirus) Regulations 2020 statutory instrument. However, this new legislation did not contain any social distancing impositions and merely allowed for some extra powers for health professionals and the police. They included the right to detain patients who were carrying Covid-19 in order to screen, assess or isolate them.
It was not until March that new emergency legislation was enacted and social distancing measures were imposed on the public. A complete lockdown is now in place with many people working from home as all non-essential businesses close down.
Efforts were made in the testing department as drive-thru test centres were set up and NHS staff and volunteers were hired but, even so, the government failed to develop a good testing capacity compared to its neighbours. It has faced severe criticism for this as evidence suggests that mass testing is an effective way to break the chain of transmission.
Prior to the outbreak, the UK was negotiating its plans to leave the European Union (Brexit) and the government was already pre-occupied with managing this divorce. The prolonged lockdown and distancing measures have only added to these concerns and authorities have now introduced a large bailout package to avoid a recession.
Up to 80% or £2500 of wages will be subsidised by the government for at least 3 months to encourage firms to retain staff under the ‘Coronavirus Job Retention Scheme’ (CJRS). Relief has been offered for tax payments and unemployment benefits have been increased. An additional £5 billion has been granted to the NHS for procurement of medical equipment and staff.
The first case of Covid-19 was reported in Iran on 19th February 2020 after which it quickly became the hub of the virus in the Middle East. As of now, there are 68,192 confirmed cases and 4,232 deaths from the virus.
Iran has been criticised for initially covering up reports of the outbreak and punishing those who spread ‘rumours’ about the virus. This included a cyber campaign as well where reports of the outbreak were suppressed by authorities.
Iran, being an important pilgrimage destination for muslims, has a large influx of people visiting from other countries. However, social distancing measures were not implemented and in fact, leaders encouraged people to perform pilgrimage at the many shrines and landmarks.
However, in March, the government beefed up its response to the pandemic as many politicians and notable figures started contracting the disease. The President approved 5 trillion rials to aid in the efforts to combat the virus and then requested a further $1 billion from the National Development Fund. A public health emergency was declared and the government announced plans to mobilise 300,000 soldiers to aid medical staff and set up 1000 detection clinics. Travel restrictions were imposed, public places were closed and some shrines were reported to have closed their doors to the public.
Many experts believe that Iran is not being transparent as to the outbreak of the virus and reports are emerging of widespread infection within the country. Most recently, the President of Iran has requested a $5 billion loan from the IMF to combat the spread of the virus. In order to stabilize its currency, the government has also injected $1.5 billion into the exchange market.
Italy has been one of the worst-hit countries so far with about 143,626 confirmed cases and 18,279 deaths. Its first real case appeared in late February, but in only a few weeks, Italy became the epicentre of the pandemic and had to turn to other countries for aid as its hospitals overflowed with patients.
A state of emergency was declared in Italy in late January 2020 and a partial lockdown was put in place affecting about 50,000 people. By March 2020, a decree of the President of the Council of Ministers was introduced that, along with several other laws, called for a nationwide quarantine. This was enforced by the Italian police and only essential businesses were allowed to run.
In Vò, an Italian town, researchers conducted mass testing on the entire population of 3,400 people. About half of these were found to be positive and quarantined. This completely eliminated the chance for any new infections. Following this case, many Italian officials are pushing for mass testing of the entire population. However, the cost of the test is a barrier to this solution for now.
The nationwide quarantine is reported to have flattened the curve for new infections however, lifting the lockdown carries the risk of re-infection. At the same time, these distancing measures are having a devastating impact on the Italian economy. To combat this the government has announced a bailout package worth €25 billion to aid healthcare services, preserve jobs and provide liquidity for firms. Private companies are also trying to aid the national effort, with many alcohol breweries producing sanitisers and other companies turning to manufacture personal protection equipment (PPE) for medical staff.
The first case of the virus emerged in Spain on 31st January 2020. Spain was slow to respond to the virus. Serious measures were not taken until March 2020. Schools and universities were ordered to stop in-person classes and by 13 March, the Government of Spain announced a state of alarm across the country prompting nationwide social distancing measures.
On 28th March, the Spanish prime minister ordered a complete lockdown and only essential workers could conduct their jobs. The lockdown was enforced through the police and drones and anyone found violating the lockdown was to be fined or imprisoned. Initially, the government planned on easing the lockdown by 12th April however, it was extended owing to the increasing number of deaths due to the virus.
As for the healthcare system, The Guardian reported that Spanish hospitals have not been able to handle the sheer amount of Covid-19 patients and the burden on their ICUs and ventilators was far above any other European country. This was attributed to the budget cuts that previous governments had made to the healthcare system. There is a lack of testing equipment as the 340,000 test kits ordered by the Spanish government were found to be effective only 30% of the time and so, had to be discarded.
As of now, 157,022 people have tested positive for the virus and 15,843 people have died due to it. The Spanish economy has taken a serious hit as low-income workers suffer the most. It is also important to note that most low-income workers are immigrants and therefore are not provided with unemployment benefits. The Spanish government has announced a €200 billion bailout package to help keep businesses afloat and stimulate the economy. Tax relief and suspension of social security contributions have also been offered to the public.
The coronavirus has been spreading rapidly across France with about 118,790 confirmed cases and 12,210 deaths. The first case can be traced back to 24th January 2020.
In March, the French president announced the closure of all schools and universities and shortly thereafter a complete lockdown was placed on the country through a decree. The lockdown entailed mandatory home confinement and only allowed for essential services to continue. Civilians are required to complete an attestation form in order to leave their homes, and they may only do so to travel for work, food, accessing healthcare or exercising within 1 km radius of their house. They must also keep this attestation form on them all the time.
France’s National Assembly drafted an emergency bill to give the government special powers to combat the coronavirus pandemic and will allow for greater control over enforcement of the lockdown as violators will be fined or may even face prison time.
Initially, France has only tested people with either very severe symptoms or people who have been in the vicinity of current patients. However, after facing severe criticism, France is increasing its testing capacity and will be testing about 20,000 people every day. The government has now authorised private labs to conduct testing in order to meet this goal.
French authorities will spend €45 billion to encourage small businesses and employees and President Emmanuel Macron said there will be unlimited aid for companies. A further €300 billion will also be granted for corporate loans.
The reason why the Covid-19 pandemic is unique amongst other outbreaks over the years is mainly down to how quickly the virus can spread. The asymptomatic nature of the virus only adds to the overall complexity of solving this dilemma. According to Vox, while a vaccine may seem like the ultimate solution, delays in the funding and testing process prevent it from becoming a reality anytime soon. Meanwhile, countries can only benefit by implementing strict social distancing measures in order to slow down the spread of the virus. Countries like New Zealand are a prime example of how social distancing can flatten the curve if not completely deplete it. However, it is way too early to believe that a month or two of social distancing measures and lockdowns will completely solve the issue. Lifting a lockdown without knowing whether the virus has been overcome may only send us back to square one and all current effort would go to waste with only an increased economic burden and a tougher ask for an already broken healthcare system.
The economic outcome of this pandemic will be detrimental for the global economy. The big bailouts might help keep some businesses afloat and grant unemployment benefits to people, however, lower-income groups and immigrants will be at a loss. This will be even worse in the third world where bailout packages might not even be considered.
Multilateral institutions are playing their part in trying to revive the global economy. The IMF has set aside $100 billion to lend to countries requiring bailouts. The World Bank Group and the European Union have also promised $150 billion and €500 billion respectively to aid in these efforts.
It is very possible for countries who were unable to curb the virus in its infancy to follow the same trajectory as South Korea if policymakers can adapt to systemic and well thought out practices. Measures used in Italy and South Korea are evidence that mass testing is an effective way to overcome the virus when the development of a vaccine is months away.