Thursday, March 19, 2020

More thoughts about the economic impact of the coronavirus

Recently, I wrote about my thoughts on how the novel coronavirus and COVID-19 will affect economies. As the coronavirus spreads across the world, and more and more people are diagnosed with COVID-19, things are changing again.

Those who speculated that supply chains will leave China for other countries, especially those in Southeast Asia, are probably relooking at their opinions now as those countries are also closing off their borders, making it harder for goods to be moved between countries. Conversely, China has done everything it can to get back to normalcy as soon as it can. We see the drop in COVID-19 cases in China, and its factories are reopening. It is even sending medical staff overseas to help other countries deal with COVID-19.

Meanwhile, other countries are banning foreign travelers or imposing quarantine/isolation on people entering their borders. Italy has seen its medical system overwhelmed, and someone in the U.S. even mentioned that the coronavirus could infect 40% to 60% of the U.S. population. That's like 150 million people, and even a fatality rate of 1% would mean more than a million deaths.

We have seen the stock market tanking in the U.S., bringing with it the other stock markets in the world. Economic outlook is bleak with people saying that the U.S. is probably already in a recession, if not an economic depression. Yet there are also countries who had somehow managed to keep afloat. Singapore continues to serve as an example of how to deal with the novel coronavirus by always trying to stay ahead of the curve. South Korea, with the rapid decision to expand testing, has managed to limit the spread of COVID-19 too. Hong Kong is linked to mainland China by land, yet managed to effectively keep itself isolated. Taiwan, with strong economic ties to mainland China, has also managed to contain the spread of the novel coronavirus.

These countries share one similarity: the ability of their governments to take swift and decisive action. Their governments made use of the time that China bought (with its quarantine of Wuhan and other major cities) to put in place measures for detecting and limiting the spread of the virus. While the rest of the world was watching how things would develop in China, and some even trying to find blame with the Chinese government, these countries were making the best use of that time to make sure their people are and will be safe.

If Japan had made use of the Chinese New Year period, when China was effectively isolated, to also ask its people to limit travel and work from home, Abe would not have to deal with allegations that he is deliberately making it hard to test people (by setting really high criteria to qualify for testing) so that it would not affect the Olympics. But Japan carried on with life as usual, the packed trained and densely populated cities became breeding grounds, and there are more and more cases each day. And those cases are only those who had cleared that high criteria for testing; based on statistics, there are probably many many more with COVID-19 that are either asymptomatic or with mild symptoms.

If the rest of the world had used the Chinese New Year period to limit travel and close schools and work from home, we may not be where we are today. No one knows for sure, but that possibility is there.

But their governments, their leaders, did not take that chance, did not make that tough decision. And so here we are today. Where people cannot feel safe and secure, medically, socially, economically. A world of racism and conspiracy theories as people try to find others to blame for their own poor judgment.

I just hope we can all get through this, come out better, and come out wiser.

Previous posts:
My thoughts about the economic impact of the coronavirus
Some thoughts about the political and economic impact of COVID-19 on China

No comments: