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Is it Too Early to Reopen Businesses? A Take on Economy vs Public Health

  • May 15, 2020 10:04 PM AEST
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1376 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Is it Too Early to Reopen Businesses? A Take on Economy vs Public Health

The unfathomable COVID 19 mayhem continues to be a period of upheaval and uncertainty even though several decision makers are showing intent of taking the harsh decision of reopening businesses. However, flattening of the virus curve has noticeably shown some light at the end of the tunnel. But, is it too early to get the pre-COVID normalcy in the business world, while the world awaits a robust anti-viral vaccine for the invisible enemy?

COVID 19- Current Global Situation

Across the globe, cases of COVID 19 has crossed the four million mark. As per World Health Organization (WHO), on 15 May 2020, there were 4.3 million confirmed cases of the virus globally, with 295k confirmed deaths across 216 countries.

Countries had enforced lockdowns, in response to strong virus transmission and utilize the the time to ramp up their ability to trace, isolate, test and care for patients. With social distancing being regarded as the most apt measure to contain the virus spread, businesses, school, colleges and likewise institutions were shut, travel and border restrictions were imposed which consequently had a detrimental effect on many people’s livelihood.

The WHO states that until there is a vaccine; hygiene, social distancing, and robust public health measures need to be in place. Vaccines across the world remain in pre-clinical and clinical stages. However, there have been reports of few companies being confident of having developed cures that can help curtail coronaviruses.

GOOD READ- Search for COVID-19 Vaccine; Top 10 Names Across the Globe

After weeks of lockdowns in most affected countries, the seriousness of socio-economic impact has come into picture. Reacting to the same and to protect lives, a measured and stable lifting of lockdowns is being regarded as the key to both revitalizing economies, while also closely gauging the virus so that required steps can be taken if an pick-up in cases is recognized.

Economies Devise Plans to Lift Lockdowns

Germany was looked upon as a country that was relatively successful in slowing the outbreak owing to a massive testing programme. Consequently, it took its first tentative steps to ease a lockdown but around first week of May, the country reported that infections had accelerated again.

France and China are other economies that have begun to reopen certain businesses. However, around first week of May, Wuhan City in China, the epicentre of the global outbreak, reported its first cluster of infections from the time when its severe lockdown was lifted, approximately one month ago.

Australia too seems to be on track in flattening the curve as Prime Minister Scott Morrison recently announced to restart the economy, though steps would not be uniform across states and territories as Australians have been cautioned to ready themselves for a rise in infections as economic activity resumes.

Things in the world’s largest economy and the one with maximum number of confirmed cases, US, has fetched perhaps the most attention and if one must say, criticism too. President Trump, running for re-election in November, has been assertive for a rapid reopening across US states, against the recommendations of health experts who are advocating a more cautious move to avoid a resurgence of the coronavirus. A JHU CSSE dashboard updates that the US has 1.41 million confirmed cases as on 15 May, with 85k deaths.

The reopening chronicle does not end here. Russia has recently overtaken Italy and Britain to report the world’s highest cases after the US (252k as per JHU CSSE on 15 May). Nonetheless, President Putin has declared plans to ease national lockdown measures from 19 May 2020.

Dr. Anthony Fauci’s Take on Businesses Reopening

From flattening one curve to getting ahead of another, economies seem to be wanting it all. US, Spain, Italy and France- countries with the highest numbers of confirmed COVID 19 cases, have announced plans for exits from their lockdowns, some cautious and gradual, others like the US seem to want a speedy pre-COVID 19 environment (or maybe a better one?) back in no time.

It is true that curves are flattening, and infection rates have started to fall. Reports suggest that over 1,000,000 people across the globe have recuperated from the virus, with 154k alone in the US. But with the contagious fear still looming, is it wise for economies to reopen businesses?

The White House’s key US infectious disease expert, Dr. Anthony Fauci, has been vocal about how deadly the novel coronavirus is and he has been warning the Congress that the decision of some states to prematurely reopen businesses and schools might invite the unwanted risk of additional outbreaks, especially in vulnerable populations.

He further stated that without widespread testing and contact tracing measures, the risk of having people leading normal lives with no social distancing will trigger outbreaks that might be beyond Government control.

President Trump, however, has seemed keener to ramp up the American economy which has been on its knees owing to production halts and travel restrictions. He believes that Dr. Fauci’s warning is not an acceptable answer. Interestingly, the strength of the economy has been central to Mr. Trump’s pitch for re-election this November.

WHO’s Take on Lifting of Lockdowns

Tedros Adhanom Ghebreyesus, Director general of the WHO, in his recent media briefing stated that a well- planned lifting of lockdowns is the key to stimulating economies and keeping an eye on the virus, traits of which are still unknown. However, countries should ask themselves three questions before they decide to ease restrictions-

These questions should be the tripod stand that help economies understand if a lockdown should be released gradually, or not. Dr. Tedros also stressed on the fact that even with three optimistic answers, releasing lockdowns is both difficult and complex.

While the risk to reopen businesses remain, it is a slow but true fact that economies need to start pulling the strings and decide on wise, scrutinized lifting of lockdowns, if normalcy were to be revived.

Meanwhile, one must also remember what Dr. Tedros says-

“Only together can we get through this pandemic. In national unity and global solidarity”

GOOD READ- Conventional Way of Re-opening Economy in Uncertain Times – US, UK, Australia and China

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