The Virus and the Accordion
By Dr Ashish Lall | April 8 2020, 8:15 AM SGT
Now, when it is a tad late, the media and ‘experts’ in many western countries are finally asking what they can learn from Singapore, Taiwan, Japan and South Korea about ‘flattening the curve’. These countries have learned their lessons from the SARS outbreak and doubled down to prepare for the next epidemic. They responded early, in January 2020, with various non-pharmaceutical interventions including travel restrictions, using masks, temperature checks, aggressive contact tracing, using apps, and social distancing – tightening the restrictions when needed. Of course, Singapore has recently shut down to prevent a second wave and Japan has also declared a state of emergency. Sweden, which has also been open for business (except businesses with over 50 employees) may find it needs to tighten the constraints as the death toll from covid-19 climbs.
The UK, US, Canada and many European countries reacted only in mid-March either due to a large outbreak, as in the case of Italy and Spain or because an Imperial College study dated March 16th predicted that an unmitigated epidemic would lead to about half a million deaths in the UK and 2.2 million in the US. By this time, it was too late to take a graduated approach and many of these countries had little choice but to declare national emergencies and shut down their economies.
The Imperial College study mentioned another important detail. It expects the epidemic to come and go in waves for the next 18 months, since that is how long it will take to develop a vaccine. What is required over that period, is flexibility, to loosen and tighten constraints. My metaphor is that of an accordion. So, the conversation needs to move to opening up. The graduated approach taken by countries that acted early versus the ‘single bullet’ approach taken by others has economic implications as well. We should expect the negative economic shock to be larger and more uniform (low regional or within country variation) in the latter group of countries. The recently released Google mobility reports, which may be taken as a proxy for expected economic performance, confirm this. For example, in Japan [UK], declines in mobility (relative to a baseline) were 26% [85%] for retail and recreation; 7% [46%] for grocery and pharmacy, 41% [75%] for transit stations and 9% [55%] for workplaces. In Japan decline in mobility for retail and recreation varied from 1% in Akita prefecture to 63% in Tokyo. There was no decline in mobility for workplaces in Akita whereas the decline in Tokyo was 27%. Japan did not shut down, but the country operated under some constraints, each region responded differently to the constraints depending on its socio-economic characteristics. Since the public health and economic risks vary across regions, it makes little sense to give them the same medicine. In the UK on the other hand, the decline in mobility for retail and recreation was 85%; Bath and Northeast Somerset registered the largest decline of 91%. Neath Port Talbot Principle Area and West Lothian registered the smallest decline of 74%. The negative shock is large and more uniform than in Japan – the ‘single bullet’ approach to public health explains this and also suggests that the economic pain is self-inflicted. The duration of the economic downturn will also be dictated by the inadequacies of the healthcare system. Flattening the curve may be important, but any curve relative to healthcare capacity (such as the number of intensive care beds, respirators, test kits) will ultimately determine the duration of the shutdown.
Countries which took a graduated approach have already learned how to play the accordion and so have businesses in these countries. Businesses in these countries already know what they need to do to operate in a constrained environment. They have thought about issues like how to get parts and equipment, how to reorganize their workplaces and how to make up for revenue shortfalls. In countries which have shut down, it is likely that some businesses can only think of whether they will ever open again. If they do, they will still have to learn how to operate in a constrained environment and possibly to shut down and open up again over the next 18 months.
Perhaps there is an opportunity here, to put aside ideological and cultural blinders and for businesses in Singapore, Taiwan, South Korea, Japan and Sweden to share their experience with those who are in similar sectors in countries which have shut down. In addition, it is likely, that many supply chain, operations, and business continuity professionals are presently underemployed. They can chip in as well, pro bono of course. I may be biased, but I think Facebook is an ideal platform to make this happen.
Dr Ashish Lall (PhD Economics) is a Senior Advisor on Public Policy and Government Relations at PS-engage. he has taught at the Lee Kuan Yew School of Public Policy, the National University of Singapore and Nanyang Business School (NTU). His previous affiliations include the Canadian Royal Commission on National Passenger Transportation; Abt Associates of Canada and Canada Post Corporation.
Image credits: Molly Woodworth