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.