Covid-19: The Epidemic & The Economy

By Rajan Philips –

Rajan Philips

“What I have learned about pandemics is you have to be very humble. There is no mission-accomplished moment.” ~ Dr. Vin-Kim Nguyen 

Perhaps every medical professional would agree with the sentiment in the above comment by a Vietnamese Canadian Doctor, who is affiliated to two international hospitals, one in Montreal, Canada, and the other in Geneva, Switzerland. Unlike Doctors who would give you the unvarnished truth, governments and politicians generally have different arrangements with truth and humility. Lack of humility and premature celebrations of victory are all too common in government and politics in Sri Lanka and elsewhere. The country seems to be now paying the price for the government’s premature declaration of victory over Covid-19 and prodigal distractions thereafter – changing the constitution just for the heck of it and changing the heck out of the positions of doctors in  public health agencies. The infection total is now past 21,000 and the death toll is reaching 100. A sevenfold increase in both in just over seven weeks. What is worrisome, apart from the rate of increases, is the absence of any indication that the government is in control and is able to arrest the trend, let alone reverse it.    

Sri Lankan numbers are still pea nuts in the global context. At Sri Lanka’s rates, the US should have under 400,000 infections and 2,000 deaths. But the superpower has a staggering 13 million infections and over a quarter million deaths. But the finally-on-his- way-out Donald Trump, after singlehandedly leading America to become the super spreader of the coronavirus, maniacally believes that but for his brilliant stewardship tens of millions of more Americans would be infected by now and a million of them would have died. Americans have managed to get rid of Trump, thanks to their unsung heroes who faithfully counted nearly 160 million votes in the most contentious of situations and the judges who boldly rebuked and threw out every one of Trump’s vexatious pseudo-legal challenges. But America is stuck with the coronavirus which is still spreading in its deadly mutation. And vaccines, though the result of globally coordinated scientific efforts at the highest level, are not going to be overnight panaceas. Again, every medical professional is saying that. 

Logistically, there are several hoops to pass through even after one or more of the three lead vaccine candidates are approved for use. Their mass production, storage and transport are all huge challenges, which can be done but not in any hurry. And worldwide vaccination thereafter will be an unprecedented health intervention on a global scale. Then come the challenges of keeping records for multiple inoculation, verifying vaccine effectiveness, and tracking virus transmission after vaccination by pre-symptomatic and asymptomatic carriers. According to experts the now ongoing clinical trials alone are not sufficient to be conclusive about any of this, given the speed at which vaccine development is necessarily being undertaken. The consensus upshot is that masks and physical distancing cannot be dispensed with easily or quickly even after vaccination programs get underway in different countries. All of this would invariably lead to delaying the resumption of economic activity to pre-pandemic levels. Sri Lanka is not alone in this, but there are many things that individual countries will have to do themselves on their own.    

From Infection to Recession

Last week I referred to Dr. Tissa Vitarana’s statement on “Community action can end the Covid-19 pandemic,” where he very simply explains the basic facts about the virus, its current level of transmission in Sri Lanka, the difficulties Sri Lanka will face in obtaining a vaccine for the entire population within a short-time frame, and calls for “community action” to end the pandemic. He calls the current mode of transmission, “uncontrolled community spread.” He suggests there could be 80% asymptomatic transmission and cites a figure of 30% test positivity from a random PCR study in Colombo by the CMOH. He fears that waiting for the vaccine to control the virus could be a “distant dream.” The reason is that apart from logistical delays, Sri Lanka should be in a position to buy the available vaccine for 60% of the population in addition to the expected WHO’s free vaccine for 20% of the population, to vaccinate 80% of the population – the threshold “to break the chain of transmission in a population.”  

Until then, it is “community action” that should be relied upon, along with public health infrastructure and a knowledgeable population observing basic health practices, to contain the community spread of the virus. Dr. Vitarana is confident that “if a good example is set from the top (no large gatherings etc.) and the people follow the health guidelines, the country can get rid of the Covid-19 scourge.” 

In fairness to Dr. Vitarana, he is not asking to be in charge of this community action plan, and he is confident in the abilities of doctors in the Epidemiology Unit and of the armed forces for tracking and tracing. And if Dr. Vitarana is just a retired professional without political involvement, no one would be suggesting that he should be recalled from retirement to head this or that coronavirus task force. The only reason that some of us are puzzled about his apparent exclusion, is that he has been so much a part of the PA/UPFA/ULF/SLFP/SLPP governing political formation for twenty six years – all the way back from 1994, when some of the current bigwigs were in and out of the country and would not have known the difference between a parliamentary system and a presidential system.

Put another way, the mystifying exclusion of Dr. Tissa Vitarana and the inexplicably ridiculous transfer of Dr. Anil Jasinghe from Health to the Environment, are not signs of a government utilizing the best available people and the all the available institutional resources to “methodically” (to borrow presidential terminology) deal with the current pandemic crisis. Equally, if things have been working, and there is no surge of infections, no body will be talking about Dr. Vitarana or Dr. Jasinghe. And there is no certainty either that everything about containing Covid-19 is going to get better. At least, there are no encouraging signs that things are indeed getting better. 

The saving grace for everyone is that the recovery rates are high and the death rates are still low. It would also seem that the symptoms of infected are people are not as severe in Sri Lanka as elsewhere, and hospitalization is not currently overwhelming. Will all these factors hold at their current manageable levels, or can they get out of control? I have not come across any discussion about future projections either through technical modelling, or based on experience and common sense. The overall uncertainty affects decision making about the levels to which social and economic activities can be allowed to open up or resume. In the absence of certainty and determination, it will not be possible to plan for or promise economic growth, let alone prosperity. Even if Sri Lanka is somehow able to resume significant economic activities, it still will have to face a very sluggish world outside. 

It is a sign of the times that the British government has officially declared that it is heading towards its worst recession in three centuries. That last one was in 1709 and was caused by a fierce European winter which ravaged economies and caused famine. This time the British economy is expected to contract by 11.3%, worse than every country in Europe other than Spain which is staring at a 12.4% GDP drop. Rishi Sunak, Britain’s Punjabi-Hindu Chancellor of the Exchequer, told the House of Commons last week, “Our health emergency is not yet over, and our economic emergency has only just begun.” The emergency could apparently get worse if Brexit goes wrong. In any event, the British government is not expecting the economy to return to pre-pandemic levels until the end of 2022. That generally is the sentiment in most countries. And China cannot play the same saviour role it played during the 2007-2008 global financial crisis.

This is also the context in which Sri Lankan government leaders should rethink and revisit many of the premises and projections that were included in the new budget. If it is “day-dreaming” to think of buying vaccine to vaccinate 60% of the population, by what yardstick of reality can one expect 60% market capitalisation? Until Covid-19 is brought under reasonable control, it would not be realistic to expect the economy to return to anywhere near full throttle. Clearly, a total lockdown is not the answer, even though it would be the easiest to implement and to claim victory. 

Economic targets and infrastructure investments that are inappropriate for the current situation, that are environmentally harmful, and do not carry long term benefits should be avoided. Inappropriate examples include construction of highways and mass paving of 100,000 kilometres of currently unpaved rural roads. The latter would be a drainage disaster. Potential projects that deserve investment green light, are helping garment factory workers to build their own houses, urban and rural water supply and sanitation schemes, countrywide drainage control, and water management as part of agriculture and food production. Such targeted economic activities can go hand in hand with “community action” to contain Covid-19.