Flattening the curve without flattening the SA economy

19 April 2020

Our situation requires is a delicate balancing act

One of the worst outcomes of the current coronavirus onslaught will be the failure not only to flat­ten the curve, but to salvage what is clear­ly a convulsing global economy.

The corollary – a flattened curve and thriving economy – is a test that a few are managing, with great difficulty, to traverse. The IMF and the World Bank concur that the impact of the corona­virus is not only without precedence (on the health front) but will rival, in economic terms, the realities of the 1930s Great Depression – a depression that spawned innumerable economic theories and literature because of its impact on lives.

China’s economy, estimated at one-sixth of the global economy, was the first to slow down because of the restrictions necessary to tame the virus. Globally, markets tanked and a swathe of the glob­al economy is creaking to a halt as major economies are in lockdown.

In South Africa, the debate has, at least publicly, been about the need to save lives, much less the economy. We have over-used the quote – “we know how to reboot economies, not how to bring back lost lives” – even when I think we don’t actu­ally know how to reboot economies too.

Africa’s economies have, for decades, been crying out for a reboot. The rejection of the cigarette industry’s bid to operate and the arrest of the adventurist mine boss Mark Munroe of Impala Platinum by President Cyril Ramaphosa’s admin­istration were necessary to stem a prema­ture opening of the floodgates.

In the UK, many are arguing there’s hardly a point to saving lives if the econo­my is allowed to tank. Professor François Balloux, chair in computational biology at University College, London, argues that a correlation between life expec­tancy and the economy is a critical part of a mix of factors to be considered. “If you go to Somalia, life expectancy is not the same as in the UK or Europe and the reason is the economy. If you trash the economy you trash the health system and education – and if you trash the health system and education you trash life ex­pectancy,” he said.

He is supported by Dr Bharat Pankha­nia, a lecturer at the University of Exeter, who notes: “The economic impact [of Cov­id-19] is huge and in itself will result in lives lost…” Decoded, not only will people die from the virus, they will also die from the impact of a badly managed economy, however gradual the deaths and limited life expectancy.

In the US, the debate has been more crass, with some blatantly arguing that it is not callous to suggest that elderly peo­ple and others who have underlying ail­ments must be allowed to die while the economy is saved because they’re, after all, not economically active. These sup­port President Donald Trump, who has argued that “we cannot let the cure be worse than the problem itself”.

Put differently, let the virus kill how­ever many people as long as we save the great American economy.

To understand Trump, his one ticket to the White House has been the improve­ment of the US economy. Now, corona threatens that which is at the core of his campaign.

His critics, though, have pointed out the molten immorality of his politics: he wants to prematurely open the economy, risk lives because he is under pressure to please cor­porations and Wall Street executives who contribute large sums of money to his elec­toral campaigns. For them to continue to do so, they need the economy open, they need to trade regardless of who dies.

Like their UK counterparts, they ask whether it is worth allowing the economy to tank in order to save the economically inactive elderly and sickly Americans. It is a debate that has polarised conserva­tives and Trump’s troupe who cheer him on when he says the World Health Or­ganisation-declared pandemic is a “new hoax” by Democrats.

As Americans tear each other apart, the virus continues to devour the land of the free – with more than 700 000 con­firmed cases and over 32 000 deaths, making it the most affected country in the world. China, meanwhile, has put the lid on the virus at 83 000, with about 3 000 deaths.

Out of the annihilation of the North, there are important considerations for developing economies. The poor in our country are already at a gross disadvan­tage in the management of the virus.

Our poor hardly have access to clean water, healthy food, sanitation, good health facilities open 24 hours a day. Their immune systems are the weak­est – which impact on life their expec­tancy, as correctly argued by Balloux. They already are at the thin end of the wedge. For them, safeguarding an econ­omy from which they’re already exclud­ed makes no sense.

As a country, we can’t argue that we need to save our economy for our youth because, in any case, we have one of the biggest youth unemployment figures (per capita) in the world in addition to being in the pits with regard to inequality.

The corollary of this argument though is that our blind pursuit of an all-inclu­sive health will no doubt induce an eco­nomic Armageddon. Those who stand to suffer the most from this are, again, the very poor who are much exposed to this virus. Ours, therefore, can’t be the dichotomous debates of the North, but a delicate balancing act.

Flattening the curve without flatten­ing the economy is a pursuit that re­quires all of Ramaphosa’s business and political acumen.

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