Other countries are desperately trying to contain the virus, at different stages of flattening the curve or curbing the exponential growth of those infected. Australia seems to have succeeded in slowing the rate of growth and there is talk of gradually lifting some restrictions. Japan appeared to be an outlier alongside its South Korean, Taiwanese and Hong Kong neighbours but is now fumbling into partial lockdown as the number of infections has risen sharply. Prime Minister Shinzo Abe declared a state of emergency on 7 April, but relies on requests from governors in designated prefectures and public compliance as more draconian legal enforcement measures are unconstitutional in Japan.
Can those governments and societies that appear to have had success start looking at restarting their economies and gradually easing lockdowns? All the analysis and data would suggest that unless there is mass testing or inoculation (still many months away), the risk is a rapid rebound of virus infections.
It’s still difficult to get tested in many countries. Even with some symptoms, there are often strict criteria such as having to have recently returned from overseas or having been in close contact with someone with an officially confirmed infection. Many carriers, including children, are asymptomatic and there is a lag until symptoms show. Decisions simply should not be made on the basis of the incomplete and partial data that many countries have.
The key for countries now is to get the re-transmission rate, R, to below one, and keep it there so the infections die down. An R of one will mean a constant infection rate, a knife-edge because any R above one means exponential growth, which we all understand now is explosive. In Japan, R is currently greater than one and, as the United States and Europe show, every day counts before infections get out of hand and health systems are overwhelmed. Lifting lockdowns too early will mean that exponential growth returns. The costs in terms of human life and the health burden are too high.
Until there’s a vaccine, there needs to be mass testing everywhere. If not mass testing, there needs to be random testing at scale so that choices can be made on the basis of reliable data. South Korea is exhibit A. Many may question the accuracy of the Chinese data but the trend is clear and it’s difficult to imagine the lockdowns being lifted if the virus were not now largely contained.
COVID-19 spread so rapidly thanks to our interconnected world with its daily mass movement of people around the globe. Past epidemics from the Black Death in the 14th century to the Spanish Influenza in the early 20th century managed to spread globally even before today’s hyper-globalised world. With globalisation spreading the virus faster, exponential growth in any one country is a risk to the rest of the world.
But in today’s interconnected world, information moves faster than the virus and we can learn from other countries’ experience more quickly. Many governments have squandered the lead time they had in preparing to fight the virus, exposing weaknesses of some kind or other in almost all governments and systems.
It’s not just the real-time experience from other countries that informs policy responses. As Barry Eichengreen reminds us in one of our lead essays this week, responses are heavily informed by narratives entrapped from history. ‘In seeking to avoid past mistakes, we risk committing new ones’.
The COVID-19 crisis is unlike past epidemics or economic crises and the differences must inform our responses to it, alongside the experience from other countries as it unfolds. It is a truly global virus that does not discriminate. Financial and economic contagion will move faster than the viral contagion. Although there’s a political instinct to deny it, one country’s problem is everyone’s problem.
Global cooperation is therefore essential to the remedy for COVID-19. More information sharing, cooperation and assistance across borders is the only path that avoids ongoing health and economic catastrophe. Yet there’s no obvious leader or institution to forge such cooperation strategies. The G20 has been ineffective with Saudi Arabia at the helm and the G7, stymied by US recalcitrance, more so. Strategic rivalry between China and the United States has turned up a notch, not been put aside, even during this global catastrophe. So far there’s been no catalyst to leadership on cooperation at the top. What’s needed and what’s yet to come is from the bottom up — countries and organisations not used to assuming a leadership role.
The need for cooperation will become more urgent as the crisis takes off in low-income countries. The difference of this from crises past, as Eichengreen explains, is that the low-income countries were not so integrated into the global economy or financial systems in crises past. They still have weak and vulnerable health systems that presage ‘a crisis that will dwarf anything in the advanced world’. ‘Addressing their plight should be priority number one’ on humanitarian, economic and epidemiological grounds.
In another feature this week, Cai Fang explains lessons from China’s experience and the difficulties faced as it tries to revive its economy while the rest of the world is still in lockdown. That demonstrates an important aspect of the economic recovery for the rest of the world. Recovery will not happen for countries simultaneously, but will be phased. Those that deploy mass testing and get R below one will be able to gradually reopen their economies sooner.
Cai Fang argues that there are ‘second-mover advantages for those countries that come to restart their economies further along the global epidemiological curve’, by taking ‘advantage of the spill-over effects from the recovery front runners’.
If China is able to avoid a second wave of infections, its economy will create large positive spillovers for those able to contain the health crisis. That’s an advantage that some may wish to squander. Jeffrey Schott, Gary Hufbauer and Euijin Jung point out that global cooperation against protectionism is now vital to avoid just that. A chorus of commentators in the West are taking this opportunity to argue for less dependence on the Chinese economy. That approach will be a heavy drag upon recovery. The Chinese economy may be the only growth engine in the global economy as this year of troubles continues to unfold.
Follow East Asia Forum’s special COVID-19 crisis series from experts in-country and around the world. As with all our publications, they are double-blind peer reviewed so you can expect the usual authoritative analysis, made accessible.
The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.
This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.