Pressure builds on governments to explain their plans due to the increased economic costs of measures designed to contain the corona virus. This is compounded by concerns that food supplies and health care provisions can be undermined if restrictions are imposed too long.
While locking is likely to remain for weeks – and in some countries, detailed months of planning now can protect vulnerable people and help the economy recover faster when restrictions are reduced. Making mistakes can cause more outbreaks, rounds of restrictions on work and public life, and many more economic hardships.
In Germany, where 100,000 people tested positive for the corona virus and nearly 1,600 people have died, a group of economists, lawyers and medical experts recommend a gradual revival. The largest economy in Europe that allows certain industries and workers to continue their activities while steps are taken to prevent coronavirus revival.
A dozen academics wrote in the report, published last week by the Ifo Institute for Economic Research, that they did not expect effective vaccines or treatments for the corona virus to be available before 2021. As a result, Germany must approach the fight against disease “more like a marathon than run.”
“Future steps must be designed and prepared in such a way that, on the one hand, they ensure good health care and, on the other hand, that they can be sustained for the period of time needed,” the experts wrote. “Planning for this transition must begin immediately in politics, administration, companies and other organizations.”
How to restart the economy
The German government has launched a € 750 billion ($ 825 billion) economic rescue package that includes measures to spur loans to businesses, take risks at companies and support leave workers. This package is the largest that was launched anywhere in the world.
The Ifo report recommends that countries now have to create a national task force of experts and public representatives who will make recommendations on how to ease restrictions on work and public life, and when the industry should restart production. Returning to work will be voluntary for employees.
Industries such as telecommunications and car production which add the most economic value must be prioritized, the report said, while jobs that can be easily done from home must continue to be done remotely. Nurseries and schools will open relatively quickly, because young people rarely have severe symptoms and parents cannot work if child care facilities and schools remain closed.
No clubbing or big events
Companies that make health care products or components must also be reopened quickly, while hotels and restaurants are only allowed to do so in a “very careful and controlled manner” because it is difficult for people to keep their distance at such places. Disco and clubs must remain closed for now, the report said, and events with large numbers of spectators should not be held.
Experts say it is possible that different standards can be set in different regions. Restrictions can be alleviated first in places with low infection rates or reduce the risk of transmission, such as rural communities. Over time, areas where populations have built up immunity levels can be allowed to operate with fewer restrictions.
That, of course, requires large-scale testing of the corona virus. Comprehensive training on proper hygiene, and new rules that require the use of personal protective equipment will also be needed.
The experts also recommended that Germany organize a “massive increase” in the production of protective clothing and masks, increase its production capacity for medicines and vaccines, and build information technology platforms that allow for strategic planning.
And while the task force will make recommendations, politicians and business leaders will make the final call when to lift restrictions. “Efforts to centrally control the resumption of production … will not succeed in practice. This return must be controlled primarily by institutions and companies themselves,” the report said.
Looking to China
Countries that are trying to start their economy while preventing a second wave of coronavirus infections might look for clues as to what works and what doesn’t.
The country is likely to suffer the first economic contraction in decades in the first quarter after the central government in Beijing took drastic steps to curb the spread of the corona virus.
China has embarked on an aggressive plan to save its economy, launch policies and campaigns intended to encourage people to return to work, encourage business confidence, and protect as many companies as possible from failure. Beijing spends billions of dollars on medical supplies and treatment, and pumps money into infrastructure projects to create jobs. It also removes roadblocks and allows people to travel more freely in areas where the virus appears to have walked.
But it’s too soon to sound clear. New questions are being raised about whether the infection data reported by Beijing can be trusted, and large numbers of people are seen flocking to tourist sites over the weekend. Some businesses rush back to work too fast, making recovery difficult. The top titanium producer restarted its factory in February, only to stop work again because workers were infected.
Need for balance
Anthony Fauci, a top contagious disease expert in the United States, recently said that while public health is his top priority, keeping society and the economy on total closure for too long will have unintended negative consequences.
And former British Prime Minister Tony Blair told BBC radio on Monday that he was “afraid” of the economic damage that was done to lock down the British economy, estimated by the Center for Economic and Business Research at £ 2.4 billion ($ 2.9 billion) per day.
“If it lasts for a long time … it also affects your ability to operate your health care system effectively,” Blair said.
How to achieve the right balance, Fauci said, is a question that is being considered by countries around the world as coronaviruses continue to spread.
“People depend on supply chains for nutrition, for food,” he told the New York Times. “They might starve. People suffer from illness. If you dramatically interrupt it until there is no more, community disruption can be a major disaster.”
“We need to make sure we oversee the balance,” he added.
– Laura He and Stephanie Halasz contributed reporting.
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