Death in the time of coronavirus is lonely, and silent. Italy’s ban on saying goodbye to dying family members or friends plunges many into despair — but they continue to hope for new, more humane regulations.
Reported by Deutsche Welle 5 hours ago.
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Coronavirus: When saying a final goodbye is banned
↧
Italy PM extends virus lockdown, says euro zone rescue plan inadequate
Italy has recorded almost 19,000 deaths from the virus since its outbreak came to light on Feb. 21, more than any other country.
; Reported by Jerusalem Post 4 hours ago.
; Reported by Jerusalem Post 4 hours ago.
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↧
At Via Crucis, Pope Francis prays for those serving the suffering
Vatican City, Apr 10, 2020 / 03:50 pm (CNA).- Pope Francis prayed for those who are serving the suffering as he presided at the Stations of the Cross in a deserted St. Peter’s Square on Good Friday evening.
At the conclusion of the Stations, the pope prayed: “O God, eternal light and day without sunset, fill with your goods those who devote themselves to your praise and the service of those who suffer, in the countless places of humanity’s sorrow. Through Christ our Lord. Amen.”
The official booklet for the ceremony suggested the pope would then offer a short reflection, but instead he simply imparted his apostolic blessing.
With Italy under lockdown due to the coronavirus pandemic, this was the first time in decades that the Via Crucis was not held at the Colosseum, a Roman amphitheater associated with the Christian martyrs.
The pope had asked the chaplaincy at the “Due Palazzi” House of Detention in Padua, northern Italy, to prepare the meditations for this year’s Stations of the Cross. Contributors included parents whose daughter was murdered, the child of a man sentenced to life imprisonment, a magistrate, a prisoner’s mother, a corrections officer and a priest acquitted after eight years in the justice system.
The reflections, which were written in the first person but did not identify their authors by name, were read out as the small group carrying the cross processed around the Egyptian obelisk at the center of St. Peter’s Square, which was lit by lines of small fires.
Among those who carried the cross were two medical professionals helping to lead the fight against COVID-19 in Rome. Esmeralda Capristo, an internist, and Paolo Maurizio Soave, an anesthesiologist, are treating coronavirus patients at the Gemelli University Hospital and the Columbus Covid 2 Hospital.
After the first eight stations, the group bearing the cross moved to a fan-shaped area in front of St. Peter’s Basilica. The 12th Station, “Jesus dies on the cross”, took place before the Crucifix of San Marcello, which is credited with liberating Rome from plague in 1522.
The crucifix was displayed on March 27, when the pope gave his Urbi et Orbi blessing amid a torrential downpour, as well as on Palm Sunday and at the Solemn Celebration of the Lord’s Passion.
At this evening’s ceremony the miraculous crucifix stood facing Pope Francis, who led the Stations from a platform beneath the facade of St. Peter’s.
The introduction to the meditations, which were compiled by chaplain Fr Marco Pozza and journalist Tatiana Mario, said: “Accompanying Christ on the Way of the Cross, with the raw voices of those who live behind the walls of a prison, is an opportunity to view the great battle between life and death, to discover how the threads of good and evil inevitably intertwine."
It continued: “Contemplating Calvary from behind bars is to believe that an entire life can be played out in a few moments, as happened to the good thief.”
The Holy See Press office released a message Friday from Pope Francis thanking members of the parish of "Due Palazzi" for composing the meditations.
“Thank you for sharing a piece of your story with me,” the pope wrote. “God tells of Himself and speaks to us within a story. He invites us to listen attentively and mercifully. I want to thank you also because you have scattered your names not in the sea of anonymity, but of the many people linked to the prison world.”
“Thus, in the Way of the Cross, you will lend your story to all those in the world who share the same situation.” Reported by CNA 3 hours ago.
At the conclusion of the Stations, the pope prayed: “O God, eternal light and day without sunset, fill with your goods those who devote themselves to your praise and the service of those who suffer, in the countless places of humanity’s sorrow. Through Christ our Lord. Amen.”
The official booklet for the ceremony suggested the pope would then offer a short reflection, but instead he simply imparted his apostolic blessing.
With Italy under lockdown due to the coronavirus pandemic, this was the first time in decades that the Via Crucis was not held at the Colosseum, a Roman amphitheater associated with the Christian martyrs.
The pope had asked the chaplaincy at the “Due Palazzi” House of Detention in Padua, northern Italy, to prepare the meditations for this year’s Stations of the Cross. Contributors included parents whose daughter was murdered, the child of a man sentenced to life imprisonment, a magistrate, a prisoner’s mother, a corrections officer and a priest acquitted after eight years in the justice system.
The reflections, which were written in the first person but did not identify their authors by name, were read out as the small group carrying the cross processed around the Egyptian obelisk at the center of St. Peter’s Square, which was lit by lines of small fires.
Among those who carried the cross were two medical professionals helping to lead the fight against COVID-19 in Rome. Esmeralda Capristo, an internist, and Paolo Maurizio Soave, an anesthesiologist, are treating coronavirus patients at the Gemelli University Hospital and the Columbus Covid 2 Hospital.
After the first eight stations, the group bearing the cross moved to a fan-shaped area in front of St. Peter’s Basilica. The 12th Station, “Jesus dies on the cross”, took place before the Crucifix of San Marcello, which is credited with liberating Rome from plague in 1522.
The crucifix was displayed on March 27, when the pope gave his Urbi et Orbi blessing amid a torrential downpour, as well as on Palm Sunday and at the Solemn Celebration of the Lord’s Passion.
At this evening’s ceremony the miraculous crucifix stood facing Pope Francis, who led the Stations from a platform beneath the facade of St. Peter’s.
The introduction to the meditations, which were compiled by chaplain Fr Marco Pozza and journalist Tatiana Mario, said: “Accompanying Christ on the Way of the Cross, with the raw voices of those who live behind the walls of a prison, is an opportunity to view the great battle between life and death, to discover how the threads of good and evil inevitably intertwine."
It continued: “Contemplating Calvary from behind bars is to believe that an entire life can be played out in a few moments, as happened to the good thief.”
The Holy See Press office released a message Friday from Pope Francis thanking members of the parish of "Due Palazzi" for composing the meditations.
“Thank you for sharing a piece of your story with me,” the pope wrote. “God tells of Himself and speaks to us within a story. He invites us to listen attentively and mercifully. I want to thank you also because you have scattered your names not in the sea of anonymity, but of the many people linked to the prison world.”
“Thus, in the Way of the Cross, you will lend your story to all those in the world who share the same situation.” Reported by CNA 3 hours ago.
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Italian priest grieves, holds mass in empty church
Parish priest Rev. Angelo Riva is conducting a mass at an empty church in Carenno, northern Italy. The circle of contagion around him couldn't have been tighter, the pain of watching those near him fall to the virus. (April 10)
Reported by USATODAY.com 4 hours ago.
Reported by USATODAY.com 4 hours ago.
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Zinedine Zidane was 'ignored for two years' after World Cup 2006 final headbutt
Zinedine Zidane ended his playing career after being sent off for France in the 2006 World Cup final against Italy
Reported by Daily Star 2 hours ago.
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In Some States, Virus Deaths Could Peak Earlier Than Predicted
Watch VideoDeaths from the coronavirus may be hitting their peak sooner than expected in many states.
Last week, researchers estimated that the daily death toll would start to level out by the middle of next week. But new data has led to more optimistic predictions this week.
The model now estimates that the peak will come this weekend, and it predicts that 33,000 fewer people will die over the course of the pandemic.
What changed? The model learned from new data about the pandemic’s course in places like Italy and Spain, where deaths are already on the downswing.
And social distancing policies enacted weeks ago have made a difference in the overall curve.
Ali Mokdad is part of the team running the model at the University of Washington.
“Mortality is much lower than has been projected,” Mokdad said. “The measures are working, but Americans have been staying at home before the governors ordered them to do so. And so Americans are listening and are paying attention and they are doing their part. So good news, welcome news.”
We looked at how the model’s predictions changed for every state and we found that hospital demand will peak sooner than expected in 39 states. Almost every state will peak in the next two weeks. That’s a big change from earlier predictions.
“It means it's going to give the hospital less time to be prepared,” Mokdad said. “But the positive of that is there'll be less demand on the hospitals and for a shorter time. So in general, very good news. We hope for some places that will have more time to prepare. They don't. But at least they have less to prepare for it, which is very good.”
Earlier estimates said that 41 states would run out of ICU beds. Now, only 14 will, according to the model. And nearly every state will see fewer deaths than previously predicted.
There are a lot of models out there. Mokdad’s is probably the most prominent: The team delivers briefings to the White House daily.
“You know, again, academics will argue which model is better,” Mokdad said. “All these models are telling us exactly the same message: Staying at home is working, and then staying at home would protect life.”
Mokdad warned against taking the good news as license to ease up on social distancing. Right now, the model assumes that restrictions stay in place until the first wave of infections is over, perhaps in early June.
“We know everybody is suffering. We know everybody is going through a hardship, but they are working and they're going to help us to get out of it much faster than what we have expected before," he said. "We should stay the course and keep doing what we are doing. It's working. It's not time to relax. We will know when to relax. The data will tell us.” Reported by Newsy 2 hours ago.
Last week, researchers estimated that the daily death toll would start to level out by the middle of next week. But new data has led to more optimistic predictions this week.
The model now estimates that the peak will come this weekend, and it predicts that 33,000 fewer people will die over the course of the pandemic.
What changed? The model learned from new data about the pandemic’s course in places like Italy and Spain, where deaths are already on the downswing.
And social distancing policies enacted weeks ago have made a difference in the overall curve.
Ali Mokdad is part of the team running the model at the University of Washington.
“Mortality is much lower than has been projected,” Mokdad said. “The measures are working, but Americans have been staying at home before the governors ordered them to do so. And so Americans are listening and are paying attention and they are doing their part. So good news, welcome news.”
We looked at how the model’s predictions changed for every state and we found that hospital demand will peak sooner than expected in 39 states. Almost every state will peak in the next two weeks. That’s a big change from earlier predictions.
“It means it's going to give the hospital less time to be prepared,” Mokdad said. “But the positive of that is there'll be less demand on the hospitals and for a shorter time. So in general, very good news. We hope for some places that will have more time to prepare. They don't. But at least they have less to prepare for it, which is very good.”
Earlier estimates said that 41 states would run out of ICU beds. Now, only 14 will, according to the model. And nearly every state will see fewer deaths than previously predicted.
There are a lot of models out there. Mokdad’s is probably the most prominent: The team delivers briefings to the White House daily.
“You know, again, academics will argue which model is better,” Mokdad said. “All these models are telling us exactly the same message: Staying at home is working, and then staying at home would protect life.”
Mokdad warned against taking the good news as license to ease up on social distancing. Right now, the model assumes that restrictions stay in place until the first wave of infections is over, perhaps in early June.
“We know everybody is suffering. We know everybody is going through a hardship, but they are working and they're going to help us to get out of it much faster than what we have expected before," he said. "We should stay the course and keep doing what we are doing. It's working. It's not time to relax. We will know when to relax. The data will tell us.” Reported by Newsy 2 hours ago.
↧
Italy to remain in lockdown until at least May 3
Some restrictions, on timber companies and bookshops, have been lifted, but others remain shuttered.
Reported by Al Jazeera 1 hour ago.
↧
Can Germany Weather The COVID-19 Storm More Robustly Than Other European Countries? – Analysis
By Heribert Dieter
The Covid-19 virus has hit Germany as unexpectedly as other European countries. For a few weeks, Germans thought the pandemic was an issue for Asian countries and not their own. Today, although Germany is severely affected, the situation is not nearly as dire as in Italy and Spain. Germany, with its enormous financial resources and a well-equipped medical sector, appears to be better placed than other economies to weather this storm.
**Merkel back in power**
One of the most striking effects of the crisis is that Chancellor Angela Merkel is experiencing a revival. The debate over her succession and the next chairman of the Christian Democratic Party have become irrelevant. Merkel is firmly in power, and her popularity is quite high. Ironically, the current crisis has been falsifying the claim she made in 2015 that the German borders cannot be protected. On 7 October 2015, she had argued in a rare television interview that “borders cannot be closed”. Since 16 March 2020, the German government has implemented policies that were previously considered impossible or inappropriate.
Today, the German authorities are desperately trying to regain control over the coronavirus. These blunt measures are a reflection of the previous complacency. If the German government would have acted earlier, say in mid-February, the restrictions could have probably been less severe. The mistakes Germany made and continues to make become evident when setting Germany’s experience against that of Hong Kong. Based on my own calculations, while one in 1,070 citizens in Germany is infected with the coronavirus, the number in Hong Kong is only one in 9,934 inhabitants. Why is a densely populated city-state like Hong Kong apparently more successful in addressing the coronavirus than Germany?
There are some surprising similarities between Germany and Hong Kong in the current crisis. Both are very open economies with substantial fiscal resources, which are proving quite useful today. Both are very dependent on China, if in different ways. And both economies have seen their business models weakened by the crisis. Their response to the pandemic, however, has been extremely different.
**Hong Kong treads with caution**
The authorities in Hong Kong have been trying to control and monitor the outbreak of the crisis. Fuelled by the experience from the SARS epidemic in 2003, the Hong Kong government quickly implemented measures to control the virus. Schools and universities were closed and now use the online teaching method, and the health authorities continue to document each individual case on several websites. Citizens can identify which train, plane or taxi an infected person has used. The government is using a supercomputer of the Hong Kong Police Force to monitor outbreaks and react against them.
While the Hong Kong government has implemented many measures to curb the spread of the virus, there has been no curfew like the kind implemented in Italy, France, Spain or Germany. From day one, many citizens of Hong Kong have been wearing face masks, which may not be very effective in preventing the user from catching the virus but is useful to curb its spread. Wearing a mask has thus become a symbol of care for others in Hong Kong, where respect for others has been an established social norm. The city has just under 1000 confirmed coronavirus cases, four of whom have died. Considering Hong Kong is a part of China and there has always been an intensive movement of people between the city and the mainland, these relatively low numbers are remarkable.
The measures taken against the coronavirus may have reduced total mortality in the city. Simply put, in 2020, ordinary influenza claimed significantly fewer lives in Hong Kong than the year before, thanks to social distancing and other measures. In 2019, the influenza season lasted 14 weeks and claimed 356 lives. In 2020, the influenza season ended after a mere five weeks, and 113 Hong Kong citizens died from influenza, about two thirds less than the year before. A positive side effect has been the reduction of admissions to intensive care units due to influenza, which dropped from 601 in 2019 to 182 in 2020. Thus, the healthcare system’s capacity to handle Covid-19 cases was higher than it would have been in a regular influenza season. Dr. Joseph Tsang, an expert for infectious diseases, called the reduced influenza cases a “collateral benefit” from the coronavirus outbreak.
**Germany’s ex-post approach**
The contrast between Germany and Hong Kong is stark. Germans very reluctantly embraced the precautionary measures. Despite the virus wreaking havoc across the world, including in Italy, many Germans thought that Covid-19 would not severely affect them. The German government was equally reluctant in implementing comprehensive measures to stop the spread of the virus. Instead, the federal and state governments implemented what an ‘ex-post’ approach, waiting until the crisis hit — and infection rates skyrocketed — to implement harsh measures.
To be fair, that may have been the only avenue available in a democracy in general and in Germany in particular. Policies that severely curtail the freedom of individuals are always contested, and without evidence, it is incredibly complicated to convince citizens that they should alter their behaviour. In Germany, the use of emergency acts is currently accepted by a vast majority of citizens but perhaps would not have been tolerated at the end of February. As we know from other policy domains, democracies are not very good at implementing precautionary policies.
German policymakers have continued to emphasise that the country is well-prepared for a health emergency. But this is true only on two fronts: have a good number of hospital beds and laboratory capacity. Germany currently has 28,000 intensive care beds, out of which 25,000 are equipped with ventilators. Germany has more hospital beds than most other European countries. According to World Bank data, Germany has 8.3 beds per 1000 people, while France 6.5 beds, Italy has 3.4 beds and the UK 2.8 beds. Even in the US, which has one of the most expensive health care sectors in the world, there are only 2.9 beds available per 1000 people.
The German approach can partly be explained by the confidence in the existing medical resources. But despite having many hospitals, there is a lack of necessary medical equipment such as masks.
**Too much restriction?**
Like most other European governments, Germany has implemented unprecedented measures to stimulate the economy and to keep businesses afloat. What sets the country apart is its fiscal muscle. After years of economic boom, high levels of taxation and restricted government expenditure, Germany can use its vast financial resources to avoid an economic collapse. In 2019, gross public debt was reduced to 59.2 percent of GDP. Some commentators have suggested that “saving has paid off”. The debate on a possible exit from the measures adopted to curb the spread of the Covid-19 virus has continued. While it appears that the strict rules will remain in place at least until mid-April, Germany might consider a model adopted by many other countries — some restrictions on public life, but a return to the workplace for a significant number of the workforce.
Indeed, estimations by some virologists appear bizarre. Lothar Wieler, head of the Robert-Koch-Institute, which advises the German government, had suggested in mid-March that in an extreme scenario, Germany may have to remain in lockdown-mode for up to two years. Of course, the implementation of the current measures beyond April would risk the stability of many German companies and could lead to massive unemployment, widespread bankruptcies and severe political instability.
Some commentators have already criticised the harsh measures. Hans-Juergen Papier, former president of the German Constitutional Court, has warned that emergency measures do not justify the suspension of civil liberties in favour of a state of authority and surveillance. He said a curfew that has no limitation in space and time most probably represents a violation of the German constitution. Policymakers in Germany and elsewhere must find a balance between protecting their societies as well as protecting the economy. To place the safeguard of citizens’ health above all other considerations is a risky strategy. Without a return to economic activity in the foreseeable future, Germany and other European countries may rapidly be exposed to severe socio-economic problems.
**Following the Chinese example?**
If Covid-19 is a severe health crisis, but not an unprecedented one, the question arises why governments all over the world, including the German one, are outbidding each other to curb the freedoms of their citizens. One reason might be the rivalry with China. The Chinese Communist Party has been trying to recover from the mistakes made in Wuhan in the early phase of the outbreak by implementing a draconian lockdown.
Today, the Chinese government is portraying itself as one of the few governments able to protect its population from the virus. Explicitly, the Chinese Communist Party has been suggesting that democratic governments are not well placed to combat a serious threat to their citizens. At the same time, policymakers in those societies want to demonstrate their ability to act forcefully, and they have used the Covid-19 crisis to do so. They have simply copied the Chinese blueprint, perhaps prematurely. The precedent set by China may have hurt the ability of politicians in Europe and North America to develop their strategies to combat the virus.
**Ray of hope**
There are, however, some very optimistic observers in Germany that neither expect a lasting lockdown nor a severe effect on the economy. The Council of Economic Advisors to the government has suggested that Germany may suffer quite limited economic damage from the crisis. In a best-case scenario, they expect a drop five percent drop in GDP in 2020, which would be less severe than the contraction of the economy in 2009. Even if Germany were to stay in lockdown for seven weeks, the reduction in GDP would be limited to six percent.
What will change is Germany’s fiscal position. At the start of the current crisis, the country’s coffers have been well filled. Federal, state and social security funds are said to have liquid reserves of 200 billion euros. In times of crisis, this comes in handy. The federal government has adopted a far-reaching package of measures to mitigate the consequences of the spread of the coronavirus. The cabinet initiated emergency aid for micro-enterprises and self-employed persons. Clinics and practices will be strengthened, and access to short-time work benefits simplified. And the government is helping large companies with an economic stabilisation fund.
That fund has three elements:
· A framework guarantee of 400 billion euro to help companies refinance themselves on the capital market (bridging liquidity bottlenecks)
· Credit authorisation for 100 billion euro to strengthen the capital of companies (recapitalisation)
· A further 100-billion-euro credit authorisation to refinance the special programmes of the state-owned Kreditanstalt fuer Wiederaufbau.
Given the uncertainty about the duration of the crisis and the severity of the economic decline, the German government has had one primary objective: to stabilise the expectation of its citizens. This goal may have been achieved for now, but any significant deterioration of the situation will alter the equation quickly.
**A challenge for European and German solidarity**
In 2020, Europe is experiencing a problem of historic dimensions. Although there is some solidarity between member states, by and large, each country is fighting the crisis on its own. It is unrealistic to expect Europe to emerge strengthened from the Covid-19 crisis. The nation-state has been the primary source of protection and help, and the citizens of each country will remember that supranationalism, let alone multilateralism, did not provide convincing answers in the crisis.
Of course, there have been nasty episodes during the crisis, and it would be easy to point fingers at the mistakes of others. In an existential crisis, perhaps it is unavoidable for policymakers to act in the national interest. Germany is no exception. The much-criticised ban on exports of medical equipment was implemented after the German government realised that the country did not have sufficient basic equipment (sanitiser, masks) for its own medical personal.
Nevertheless, Germany is contributing significantly to the stabilisation of the European economies. The country’s solid fiscal position, a result of policies that were criticised in the past, today enables Europe’s largest economy to act as a significant provider of demand. Put differently, if Germany were not able to stabilise the purchasing power of its citizens and the capacity of its companies to survive the crisis, Europe’s prospects in a post-Covid-19 world would be much bleaker.
Surprisingly, the crisis may have some positive effects on the Germans’ perceptions of the existing economic and political structures. In the current crisis, the German government is mobilising resources for its citizens, who for years have been funding the state and the social security system with high taxes and high social security contributions. Today, Germans see the benefit of previous frugality. And so, while the Covid-19 crisis will take its toll, the long-term effects may not as bleak for Germany as elsewhere.
The post Can Germany Weather The COVID-19 Storm More Robustly Than Other European Countries? – Analysis appeared first on Eurasia Review. Reported by Eurasia Review 54 minutes ago.
The Covid-19 virus has hit Germany as unexpectedly as other European countries. For a few weeks, Germans thought the pandemic was an issue for Asian countries and not their own. Today, although Germany is severely affected, the situation is not nearly as dire as in Italy and Spain. Germany, with its enormous financial resources and a well-equipped medical sector, appears to be better placed than other economies to weather this storm.
**Merkel back in power**
One of the most striking effects of the crisis is that Chancellor Angela Merkel is experiencing a revival. The debate over her succession and the next chairman of the Christian Democratic Party have become irrelevant. Merkel is firmly in power, and her popularity is quite high. Ironically, the current crisis has been falsifying the claim she made in 2015 that the German borders cannot be protected. On 7 October 2015, she had argued in a rare television interview that “borders cannot be closed”. Since 16 March 2020, the German government has implemented policies that were previously considered impossible or inappropriate.
Today, the German authorities are desperately trying to regain control over the coronavirus. These blunt measures are a reflection of the previous complacency. If the German government would have acted earlier, say in mid-February, the restrictions could have probably been less severe. The mistakes Germany made and continues to make become evident when setting Germany’s experience against that of Hong Kong. Based on my own calculations, while one in 1,070 citizens in Germany is infected with the coronavirus, the number in Hong Kong is only one in 9,934 inhabitants. Why is a densely populated city-state like Hong Kong apparently more successful in addressing the coronavirus than Germany?
There are some surprising similarities between Germany and Hong Kong in the current crisis. Both are very open economies with substantial fiscal resources, which are proving quite useful today. Both are very dependent on China, if in different ways. And both economies have seen their business models weakened by the crisis. Their response to the pandemic, however, has been extremely different.
**Hong Kong treads with caution**
The authorities in Hong Kong have been trying to control and monitor the outbreak of the crisis. Fuelled by the experience from the SARS epidemic in 2003, the Hong Kong government quickly implemented measures to control the virus. Schools and universities were closed and now use the online teaching method, and the health authorities continue to document each individual case on several websites. Citizens can identify which train, plane or taxi an infected person has used. The government is using a supercomputer of the Hong Kong Police Force to monitor outbreaks and react against them.
While the Hong Kong government has implemented many measures to curb the spread of the virus, there has been no curfew like the kind implemented in Italy, France, Spain or Germany. From day one, many citizens of Hong Kong have been wearing face masks, which may not be very effective in preventing the user from catching the virus but is useful to curb its spread. Wearing a mask has thus become a symbol of care for others in Hong Kong, where respect for others has been an established social norm. The city has just under 1000 confirmed coronavirus cases, four of whom have died. Considering Hong Kong is a part of China and there has always been an intensive movement of people between the city and the mainland, these relatively low numbers are remarkable.
The measures taken against the coronavirus may have reduced total mortality in the city. Simply put, in 2020, ordinary influenza claimed significantly fewer lives in Hong Kong than the year before, thanks to social distancing and other measures. In 2019, the influenza season lasted 14 weeks and claimed 356 lives. In 2020, the influenza season ended after a mere five weeks, and 113 Hong Kong citizens died from influenza, about two thirds less than the year before. A positive side effect has been the reduction of admissions to intensive care units due to influenza, which dropped from 601 in 2019 to 182 in 2020. Thus, the healthcare system’s capacity to handle Covid-19 cases was higher than it would have been in a regular influenza season. Dr. Joseph Tsang, an expert for infectious diseases, called the reduced influenza cases a “collateral benefit” from the coronavirus outbreak.
**Germany’s ex-post approach**
The contrast between Germany and Hong Kong is stark. Germans very reluctantly embraced the precautionary measures. Despite the virus wreaking havoc across the world, including in Italy, many Germans thought that Covid-19 would not severely affect them. The German government was equally reluctant in implementing comprehensive measures to stop the spread of the virus. Instead, the federal and state governments implemented what an ‘ex-post’ approach, waiting until the crisis hit — and infection rates skyrocketed — to implement harsh measures.
To be fair, that may have been the only avenue available in a democracy in general and in Germany in particular. Policies that severely curtail the freedom of individuals are always contested, and without evidence, it is incredibly complicated to convince citizens that they should alter their behaviour. In Germany, the use of emergency acts is currently accepted by a vast majority of citizens but perhaps would not have been tolerated at the end of February. As we know from other policy domains, democracies are not very good at implementing precautionary policies.
German policymakers have continued to emphasise that the country is well-prepared for a health emergency. But this is true only on two fronts: have a good number of hospital beds and laboratory capacity. Germany currently has 28,000 intensive care beds, out of which 25,000 are equipped with ventilators. Germany has more hospital beds than most other European countries. According to World Bank data, Germany has 8.3 beds per 1000 people, while France 6.5 beds, Italy has 3.4 beds and the UK 2.8 beds. Even in the US, which has one of the most expensive health care sectors in the world, there are only 2.9 beds available per 1000 people.
The German approach can partly be explained by the confidence in the existing medical resources. But despite having many hospitals, there is a lack of necessary medical equipment such as masks.
**Too much restriction?**
Like most other European governments, Germany has implemented unprecedented measures to stimulate the economy and to keep businesses afloat. What sets the country apart is its fiscal muscle. After years of economic boom, high levels of taxation and restricted government expenditure, Germany can use its vast financial resources to avoid an economic collapse. In 2019, gross public debt was reduced to 59.2 percent of GDP. Some commentators have suggested that “saving has paid off”. The debate on a possible exit from the measures adopted to curb the spread of the Covid-19 virus has continued. While it appears that the strict rules will remain in place at least until mid-April, Germany might consider a model adopted by many other countries — some restrictions on public life, but a return to the workplace for a significant number of the workforce.
Indeed, estimations by some virologists appear bizarre. Lothar Wieler, head of the Robert-Koch-Institute, which advises the German government, had suggested in mid-March that in an extreme scenario, Germany may have to remain in lockdown-mode for up to two years. Of course, the implementation of the current measures beyond April would risk the stability of many German companies and could lead to massive unemployment, widespread bankruptcies and severe political instability.
Some commentators have already criticised the harsh measures. Hans-Juergen Papier, former president of the German Constitutional Court, has warned that emergency measures do not justify the suspension of civil liberties in favour of a state of authority and surveillance. He said a curfew that has no limitation in space and time most probably represents a violation of the German constitution. Policymakers in Germany and elsewhere must find a balance between protecting their societies as well as protecting the economy. To place the safeguard of citizens’ health above all other considerations is a risky strategy. Without a return to economic activity in the foreseeable future, Germany and other European countries may rapidly be exposed to severe socio-economic problems.
**Following the Chinese example?**
If Covid-19 is a severe health crisis, but not an unprecedented one, the question arises why governments all over the world, including the German one, are outbidding each other to curb the freedoms of their citizens. One reason might be the rivalry with China. The Chinese Communist Party has been trying to recover from the mistakes made in Wuhan in the early phase of the outbreak by implementing a draconian lockdown.
Today, the Chinese government is portraying itself as one of the few governments able to protect its population from the virus. Explicitly, the Chinese Communist Party has been suggesting that democratic governments are not well placed to combat a serious threat to their citizens. At the same time, policymakers in those societies want to demonstrate their ability to act forcefully, and they have used the Covid-19 crisis to do so. They have simply copied the Chinese blueprint, perhaps prematurely. The precedent set by China may have hurt the ability of politicians in Europe and North America to develop their strategies to combat the virus.
**Ray of hope**
There are, however, some very optimistic observers in Germany that neither expect a lasting lockdown nor a severe effect on the economy. The Council of Economic Advisors to the government has suggested that Germany may suffer quite limited economic damage from the crisis. In a best-case scenario, they expect a drop five percent drop in GDP in 2020, which would be less severe than the contraction of the economy in 2009. Even if Germany were to stay in lockdown for seven weeks, the reduction in GDP would be limited to six percent.
What will change is Germany’s fiscal position. At the start of the current crisis, the country’s coffers have been well filled. Federal, state and social security funds are said to have liquid reserves of 200 billion euros. In times of crisis, this comes in handy. The federal government has adopted a far-reaching package of measures to mitigate the consequences of the spread of the coronavirus. The cabinet initiated emergency aid for micro-enterprises and self-employed persons. Clinics and practices will be strengthened, and access to short-time work benefits simplified. And the government is helping large companies with an economic stabilisation fund.
That fund has three elements:
· A framework guarantee of 400 billion euro to help companies refinance themselves on the capital market (bridging liquidity bottlenecks)
· Credit authorisation for 100 billion euro to strengthen the capital of companies (recapitalisation)
· A further 100-billion-euro credit authorisation to refinance the special programmes of the state-owned Kreditanstalt fuer Wiederaufbau.
Given the uncertainty about the duration of the crisis and the severity of the economic decline, the German government has had one primary objective: to stabilise the expectation of its citizens. This goal may have been achieved for now, but any significant deterioration of the situation will alter the equation quickly.
**A challenge for European and German solidarity**
In 2020, Europe is experiencing a problem of historic dimensions. Although there is some solidarity between member states, by and large, each country is fighting the crisis on its own. It is unrealistic to expect Europe to emerge strengthened from the Covid-19 crisis. The nation-state has been the primary source of protection and help, and the citizens of each country will remember that supranationalism, let alone multilateralism, did not provide convincing answers in the crisis.
Of course, there have been nasty episodes during the crisis, and it would be easy to point fingers at the mistakes of others. In an existential crisis, perhaps it is unavoidable for policymakers to act in the national interest. Germany is no exception. The much-criticised ban on exports of medical equipment was implemented after the German government realised that the country did not have sufficient basic equipment (sanitiser, masks) for its own medical personal.
Nevertheless, Germany is contributing significantly to the stabilisation of the European economies. The country’s solid fiscal position, a result of policies that were criticised in the past, today enables Europe’s largest economy to act as a significant provider of demand. Put differently, if Germany were not able to stabilise the purchasing power of its citizens and the capacity of its companies to survive the crisis, Europe’s prospects in a post-Covid-19 world would be much bleaker.
Surprisingly, the crisis may have some positive effects on the Germans’ perceptions of the existing economic and political structures. In the current crisis, the German government is mobilising resources for its citizens, who for years have been funding the state and the social security system with high taxes and high social security contributions. Today, Germans see the benefit of previous frugality. And so, while the Covid-19 crisis will take its toll, the long-term effects may not as bleak for Germany as elsewhere.
The post Can Germany Weather The COVID-19 Storm More Robustly Than Other European Countries? – Analysis appeared first on Eurasia Review. Reported by Eurasia Review 54 minutes ago.
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COVID-19 In Latin America: Political Challenges, Trials For Health Systems And Economic Uncertainty – Analysis
This paper analyses how Latin America is confronting the coronavirus crisis and the political, health and socio-economic consequences the spreading pandemic may inflict on the region and its constituent countries.
By Carlos Malamud and Rogelio Núñez*
COVID-19, having emerged in Asia, has shifted its epicentre to Europe and the stage is now set for Latin America (and Africa) to play a prominent role in the next phase of expansion. The pandemic is entering a region that has advantages for combating the disease: it is learning from others’ experiences and is taking drastic steps well before its Asian and European counterparts. It also has clear disadvantages however. First, part of South America, although not Mexico, Central America and the Caribbean, is heading towards the southern winter –something that theoretically favours the spread of the virus–. Secondly, against a background of weaker economic growth, it confronts the crisis equipped with poorer tools, essentially involving inadequate health infrastructure, in the midst of an economic slowdown with politically weak governments and little scope for increasing public spending.
*Analysis*
What will be the impact COVID-19, or coronavirus, on Latin America, its societies, its governments and its economies? Will it be very different to what has happened in the rest of the world or will it be possible to discern some type of regional response, beyond the limitations that exist in many countries stemming from public health systems starved of resources? The coronavirus pandemic that paralysed China between December and March and has been afflicting Europe since February is now taking off in Latin America. Given the way the disease unfolds, however, everything suggests that in a few weeks, when China has overcome the crisis and the EU may see the pandemic in abeyance, COVID-19 will be undergoing rapid expansion in a Latin American region that, at its more southerly latitudes, will be heading towards winter.
More than 15,000 cases have been recorded in Latin America. At the time of writing (Monday, 30 March, at 12:00am), there has been a rapid increase compared with the preceding two weeks, as shown in Figure 1.Figure 1. Numbers of infected cases and deaths on the American continent
Country 14 March 2020 30 March 2020
Infected Deaths Infected Deaths
USA 2.340 50 142.746 2.489
Canada 200 1 6.320 65
Brazil 151 4.256 136
Chile 43 2.139 7
Ecuador 26 1 1.924 58
Mexico 15 993 20
Panama 36 1 989 24
Dominican Republic 11 859 39
Peru 38 852 18
Argentina 34 2 820 20
Colombia 16 702 10
Costa Rica 26 314 2
Uruguay 4 304 1
Cuba 4 139 3
Honduras 2 139 3
Venezuela 2 119 3
Guadeloupe 5 106 4
Bolivia 10 96 1
Martinique 6 93 1
Trinidad and Tobago 2 78 3
Paraguay 6 64 3
French Guiana 6 53 3
Aruba 2 50
Guatemala 1 34 1
Barbados 33
Jamaica 8 32 1
El Salvador 30
Bermuda 22
Haiti 15
The Bahamas 14
The Cayman Islands 12 1
Saint Martin 11
Dominica 11
Saint Lucia 9
Grenada 9
Guyana 1 8 1
Suriname 8
Curaçao 8 1
Antigua and Barbuda 7
Puerto Rico 3 5
Nicaragua 4 1
Anguilla 2
Belize 2
British Virgin Islands 2
Saint Kitts-Nevis 2
Saint Vincent & the Grenadines 1
Total without US-Canada and the Caribbean 2.999 55 15.371 362
Total 433 4 16.437 2.916
Source: drawn up by the authors with data from Worldometer COVID-19 Coronavirus Outbreak.
The spread of coronavirus and its arrival and expansion in Latin America need to be viewed from three interrelated perspectives that have a mutual bearing on one another: the political, the health related and the socio-economic. Their effects in Latin America involve an increase in economic uncertainty that runs parallel with the political and social tensions as the pressure on the administrations in general, and on health systems in particular, ratchets up.
-(1) A stress test for governments and a leadership test for presidents-
The spread of the pandemic through Latin America is going to have an initial impact with political ramifications, in addition to the predictable economic, social and health implications. The crisis comes at a time of profound weakness in the majority of the region’s governments, which in recent years have failed to provide an adequate response to the social demands of the emerging middle classes. And they have failed to do so precisely in one of the areas set to be most tested in this crisis: public services, especially health services. Together with economic stagnation and the existence of inefficient administrations riddled with corruption, the poor state of these public services (not only in health but also in education, transport and public safety) accounts for the growing and widespread disaffection unleashed at the end of 2019 in a series of popular protests that forced numerous governments in the region to change course (Ecuador cancelled an austerity plan and Chile embarked on a process of constitutional change) and even in one case (Bolivia) caused it to fall.
These governments will have to confront the coronavirus crisis while shackled by state apparatuses suffering from acute functional problems (underfinanced and, in some cases, short-staffed, lacking resources and training). From a political point of view, many administrations have a paucity of social leadership (Chile), face a new economic crisis of enormous dimensions (Argentina), find themselves coming to the end of their electoral terms (Peru and Ecuador), face the prospect of a highly polarised election campaign (Bolivia) or have extremely weak public administrations (most of Central America and the Caribbean) or are suffering from acute institutional and economic decline (Nicaragua and Venezuela) or run failed states (Haiti). The two great regional powers (Mexico and Brazil) will be most affected by the spread of coronavirus. Brazil is already the country with the greatest number of infections, while as far as Mexico is concerned, one of its great risks is its proximity to the US and its rapid rate of propagation of the disease.
Added to this is the non-existence of any effective supranational coordination. First, the Council of South American Defence, which is part of UNASUR, is afflicted by the same terminal crisis as its parent organisation. Secondly, the Pan American Health Organisation (PAHO), which like the OAS seeks to bring together the Pan-American system, is currently playing a very limited role. From next week PAHO will send support missions to those countries that ‘incur the greatest risk, such as Haiti and Venezuela. The list also includes Suriname, Guyana, Nicaragua, Honduras, Guatemala, Bolivia and Paraguay, as well as the islands of the eastern Caribbean. To date, however, no interregional or hemisphere-wide mechanism has been triggered to tackle the problem, which will be dealt with at the strictly national level, as in most parts of the world.
Despite all this, its geographical distance and isolation have so far worked in Latin America’s favour and its governments have been able to benefit from the experience of what has befallen Asia and Europe. This has helped the authorities to react early and take drastic measures sooner. Peru, with 71 cases, is the country that has taken the strictest measures. On 15 March the government led by Vizcarra announced a general quarantine, as well as the closure of its borders for 15 days to combat the pandemic: the exercise of constitutional rights relating to personal freedom and safety, the sanctity of the home and freedom of assembly and travel around the country have been curtailed.
With 45 cases, Argentina suspended classes at all levels and cancelled flights to Europe, the US and other countries with high rates of exposure. Classes were suspended in Chile before reaching 75 cases. Uruguay is notable for its rapid response: it suspended classes with only six cases. Also noteworthy in this regard are two Central American countries that, aware of the weakness of their health systems, have triggered protection measures with only one case (Guatemala) or none at all (El Salvador). The Guatemalan President, Alejandro Giammattei, placed meetings of more than 100 people in quarantine and suspended classes at all levels, while the Salvadoran leader, Nayib Bukele, ordered the civil protection authorities and the Ministry of Health to ban assemblies of more than 75 people and persuaded the legislative assembly –where the opposition wields a majority– to approve a national state of emergency for 30 days.
With 10 cases, the interim President of Bolivia, Jeanine Áñez, prohibited entry into the country for travellers arriving from China, Korea, Italy and Spain, suspended classes until the end of March and banned events involving more than 1,000 people. In Ecuador, after confirmation of the second COVID-19-related death and 28 cases, more measures were announced such as a ban on the entry of foreigners by air, land and sea. Border crossings were also closed, and mass public events were cancelled.
Colombia, with 24 recorded cases, closed the border with Venezuela and blocked entry to any foreigners who had been in European or Asian countries in the previous 14 days, while Colombians returning from these places need to submit to 14 days of quarantine and public events involving more than 500 people were cancelled. In the Colombian case, the closure of borders with Venezuela will certainly tend to aggravate the effects of what until now has been the greatest regional crisis, namely migration.
In Mexico, with 41 cases of infection, the government announced a series of measures to offset the spread of the coronavirus epidemic: the Easter holidays have been brought forward and extended to run from Friday 20 March to 20 April, entailing the suspension of classes for more than 30 million students. There has also been the suggestion that events involving more than 5,000 people should be cancelled and the recommendation that non-essential activities be suspended, with working from home encouraged between 23 March and 19 April.
In Brazil, despite having the largest number of infections, the pace of decision-making has been slower, given a certain degree of scorn for the illness on the part of President Bolsonaro. After his visit to Mar-a-Lago to meet Donald Trump, four members of the official delegation, among them the Press Secretary, Fabio Wajngarten, and the Ambassador in Washington, Nestor Forster, tested positive. The President himself was tested, although after a period of confusion he announced the result as negative. Following a major increase in the number of infections, the federal government has decided that each state and city should be responsible for taking the steps it deems appropriate. For now, it seems that the leader is not willing to impose measures of a general scope: Bolsonaro had even rejected the decision of the Brazilian Football Confederation (CBF) to suspend its competitions to limit the spread of the infection, and has accused the CBF of succumbing ‘to hysteria, and I don’t want that’.
Owing to the scale of what is happening and the Latin American tradition of presidentialism, the various leaders have adopted a conspicuous public role and taken on considerable protagonism, as well as direct oversight of the looming crisis. It is therefore set to be a test of leadership for a group of governors whose popularity and social support was already wavering (the Chilean President, Piñera, has an approval rating of just 10% in opinion polls, for example). Furthermore, in many cases they lack a protective net in the sense that these countries do not have effective or efficient administrative and health systems. This extreme personalisation of the way the crisis is handled is a risky gambit: on the one hand it has the virtue of creating high-profile leadership around a recognisable paternal figure who serves as a nexus and anchor for society at a moment of great uncertainty. On the other hand, it exposes the President to a clear risk: in the event of the situation deteriorating, all the fallout will land on his shoulders, aggravating the current problems of institutional disrepute and ungovernability that afflict Latin American countries. Argentina is a special case given the undercurrent of confrontation between the President, Alberto Fernández, and the Vice-president, Cristina Kirchner. For Fernández, successful management of the crisis would enable him to consolidate his role as the leader of the government.
The coronavirus crisis will also leave its mark on elections, falling as it does at a relatively busy electoral time. The pandemic has already caused the municipal elections in Paraguay to be postponed: ballots to appoint mayors and members of town councils to serve for the 2020-25 period, due to be held shortly, were put back to 8-28 November, and the period for parties to choose their candidates for mayors and town councillors was switched from 12 July to 2 August. The same cannot be said of the second round of municipal elections in the Dominican Republic due to go ahead this Sunday, in a country that as yet has very few cases but is due to hold a presidential election in May when the situation may well have deteriorated. Similarly, between April and May, when the pandemic may be reaching a peak in Latin America, a presidential election is scheduled in Bolivia (3 May) and a referendum on the constitutional change in Chile (26 April), when winter will be approaching in South America. Finally, the two latter were postponed. The possibility of postponing the referendum is already being discussed, and the same applies to the municipal election in Uruguay scheduled for 10 May.
-(2) The health scenario amid the prospect of coronavirus-
In the event that the COVID-19 outbreak in Latin America and the Caribbean spreads, the impact could be considerable, with the possibility of the health services being overwhelmed by massive demands for hospital care, particularly specialist services and intensive care. The region has both strengths and weaknesses when it comes to dealing with the spread of the virus. Prominent among the strengths are the time that has been bought and the lessons acquired over the last three months. The temporal buffer has been achieved thanks to the Pacific and Atlantic Oceans and the distance from events unfolding in Asia and Europe effectively forming a holding barrier. This has gained precious time and ensured that mistakes have not been repeated (drastic decisions have been taken earlier and strict control measures put in place).
The demographic structure also helps, with predominantly youthful populations, something that in principle should tend to reduce the number of acute cases. Lastly, and despite the increasingly urban nature of Latin America and the fact that the best and most efficient health services are clustered in the capitals and main cities, the lower densities of the less populous regions work in favour of social distancing and consequently help to slow the spread of the infection.
PAHO has recommended that countries intensify their COVID-19 preparation and response plans in anticipation of new cases appearing, and said that, ‘for several weeks, countries in the Americas have been preparing for the possible importation of cases of COVID-19… There are measures in place for detecting, diagnosing and caring for patients with the disease. A strong emphasis on stopping transmission continues to be an important objective while recognising that the situation may vary from country to country and will require tailored responses’.
The region faces the pandemic with several deficiencies, however, particularly shortcomings in health infrastructure and financing capacities. All its health systems aspire to universal coverage, but in practice most offer only partial coverage, as a 2019 report from the London School of Economics makes clear. Only Costa Rica and Uruguay meet the WHO recommendation that medium and medium-high income countries invest 6% of their GDP on healthcare. Mexico and Peru barely reach half the figure. And while some countries have lengthy and first-hand experience of combating infectious diseases such as chikungunya, zika, dengue fever and, in the case of Mexico, influenza A (H1N1), which has forced them to improve their public health surveillance systems, most have few laboratories with the ability to test samples to detect cases in under 24 hours, or centres or institutes for conducting field research into those infected with the virus, which would provide them with the autonomy for detecting it and acting accordingly. It is not so much a matter of research into the creation of vaccines as working on treatments that would enable the virus to be eradicated or its spread to be slowed.
Given that the key to tackling COVID-19 is not to focus on preventing its inevitable arrival but rather to prepare to restrict its spread appropriately, an adequate response involves having sufficient resources available: strengthening surveillance, training the health services, the prevention of propagation and the maintenance of essential services to slow down the transmission and save lives. It is in these areas where the Latin American health situation, which is very uneven and heterogeneous from country to country, suffers its main weaknesses. The most serious problem is that many of the health systems in the region lack the infrastructure and resources needed to tackle the rapid spread of the new virus. Owing to the characteristics of the disease, which has a low mortality rate but is highly contagious, appropriate venues are required not only for treating patients but also for isolating them. In many countries there are acute shortages of isolation quarters in terms of isolation rooms for infections transmitted by air and the hospital infrastructure.
The Global Health Security Index indicates that the protective capabilities of these systems are, in general terms, middle ranking, with four countries being classified as ‘worst prepared’ (Guatemala, El Salvador, Honduras and Venezuela).
Figure 2. Countries best and least prepared for an epidemic: capability to respond to an epidemic or pandemic in 2019
Venezuela is among the 20 worst-prepared nations to deal with the spread of an epidemic, while Guatemala, Haiti, Honduras and Guyana are highly vulnerable to new emergencies. The remaining countries suffer from less pronounced failings, but with their shortages of beds and emergency services their health services will be put to the test nonetheless. An article in The Lancet has pointed out that mortality rates go up in places with higher numbers of cases and when the system becomes overwhelmed. Amid the lack of infrastructure, human, technical and financial resources, the risk of healthcare overload in Latin America is greater and this is where the region’s greatest vulnerabilities lie. The number of hospital beds per 1,000 people is very low: the best-equipped countries (Cuba and Argentina) have a fivefold advantage over the least well-equipped (Guatemala emerges at less than 1), although only five of the highest-ranking countries in terms of beds exhibit high health security.
Countries that have a degree of security and equipment higher than average are in North America (the US and Canada) and the Southern Cone (Argentina, Uruguay, Brazil and Chile). At the other extreme, the most worrying situation is that of Central America, with the exception of Panama. While it does not seem to be an infection with a high rate of lethality, coronavirus is highly infectious, something that will prove to be a serious test for the health systems of Latin America; moreover, winter is approaching, a time when the virus will presumably become more active.
-(3) Limitations on economic growth that, if they deteriorate, could trigger recession-
The coronavirus pandemic –which has caused European and the US (as well as Asian and Latin American) stock markets to plunge, has sent raw material prices, in particular the oil price, tumbling and paralysed Chinese and EU economic expansion– is going to exert renewed and pronounced downward pressure on Latin American economic growth. The magnitude of the regional impact will depend on how long it takes China to return to normality (once it gets its own epidemic under control, as seems likely) and how the virus evolves in the US and the EU, which is now, according to the WHO, ‘the epicentre of the pandemic’.
For the time being it is thought that it will have moderate effects on Latin America, especially in comparison with Asia, but this will be determined by the duration and extent of the contagion and the type of measures governments feel obliged to take. Latin America will not be able to avoid a downturn in its economy, hobbled by the slow recovery of Chinese demand, by the acute European crisis and by a fall in US demand, all of which will translate into greater weakness in the prices of raw materials, the region’s main export. Latin American countries are already suffering from the current 2% contraction in Chinese output, with the added prospect of a more than likely European recession (the Director General of Economic and Financial Affairs for the European Commission, Maarten Verwey, has warned that ‘it is very likely that growth for the euro area and the EU as a whole will drop below zero this year and even potentially significantly’) and a halt to growth in the US, which is currently growing at above 2%.
The impact will extend across the whole of Latin America: those countries most closely tied to China will take a hit (not only due to the paralysis suffered by China but also the time it will take the country to return to normality) but similarly it will also inflict consequences on those countries more closely linked in terms of trade and tourism to the EU and the US, which are going to see their economies seize up until at least half-way through the year. In any event it is likely that exports of food will suffer less than other primary goods, such as energy and minerals.
The regional economies most directly exposed to the economic impact of Chinese decline are Brazil, Peru and Chile, due to China’s importance as an export market. Bolivia, Colombia, Ecuador and Mexico are highly exposed through commodity and agriculture prices. China is the largest trading partner for Peru (23% of exports), Brazil (28%) and Chile (32%). For Argentina, which sends China 75% of its soy and meat, some experts are predicting a fall of 5% in exports, equivalent to US$3.4 billion, and a decline in GDP of between 0.5 and 1.5%. Uruguay, which is highly dependent on its exports of meat, is in a similar situation. Mexico, Colombia and the Central American and Caribbean countries depend far less on Chinese demand and the impact will hit them from the US, where Mexico, for example, exports 80% of its output. The fall in demand from China and other countries where growth has also stalled, in conjunction with that of the US and EU, will translate into falls in raw material prices (for example, copper, iron ore and oil).
Oil prices have fallen to 1980s levels. This collapse puts the vast majority of oil-producing countries into difficulty, especially Venezuela, Ecuador, Mexico, Colombia, Brazil and Argentina. The direct consequences are very clear: if the price of a barrel of crude oil falls to US$33, fracking in the Argentine Vaca Muerta formation and exploitation of the Brazilian pre-salt layer are no longer viable, because the price does not cover the costs of production. And countries like Venezuela, where crude oil exports account for more than 90% of legal export income, are hit even harder. Coronavirus has been a severe blow to Ecuador, where the budget was drawn up on the assumption of an oil price of US$51 per barrel and it has now fallen to below US$35.
The impact on Mexico is even greater: the price of Mexican crude has broken through the floor of US$25 and there are forecasts that, if the current situation is prolonged by coronavirus and the tensions between Russia and Saudi Arabia, the US$20-barrier could be breached. This is a fall that would jeopardise Pemex, which needs the average price to remain above US$50 a barrel in order to turn a profit on its operations and to continue servicing its debt, which at US$110 billion is the highest of any oil company in the world. Now the collapse in prices puts the balance of public finances at risk. Pemex’s problems have a national impact because the company’s payments into the public coffers account for 18% of the federal budget and if the rating agencies end up cutting its credit rating, this could also drag Mexican sovereign debt downwards.
Apart from raw materials, the crisis is hitting Latin American countries in other areas, such as capital flight. Since the first infections outside China were reported in the middle of January, emerging countries have suffered capital withdrawal to the tune of more than €25.6 billion, according to the Institute of International Finance. In addition to capital outflows there have been exchange rate problems. With the dollar acting as a safe haven for the global economy, Latin American currencies have been devalued. The countries hit hardest by currency depreciation since COVID-19 started spreading are Brazil, Chile, Mexico, Argentina, Peru and Colombia; in the case of the latter, the dollar reached a level of 4,000 pesos, the highest exchange rate in the country’s history. Stock exchanges in the region have also suffered, such as the one in São Paulo, where the Bovespa index plummeted 15.6% last week, when it was obliged to suspend trading four times, as it had to do again on Monday 16 March. Something similar happened with the stock markets in Mexico, Argentina and Colombia.
The evolution of the Latin American economy is therefore linked to how the economies of China, the EU and the US perform and how long it takes for the pandemic to abate. The main risk lies in the epidemic not only propagating at a faster rate –which is inevitable– but that it lasts for longer than expected. As Federico Steinberg points out in an Elcano Royal Institute ARI, ‘it is still too early to know what the economic impact of COVID-19 will be. The key will be whether the virus can be brought under control in the second quarter of the year or whether, conversely, its effects prove more long lasting. In the former case we would be looking at a moderate impact, with a V shape, which would trim the odd decimal point from the growth in global output. In the latter, the situation could be much more severe, as the OECD suggested when it posited worldwide growth being cut in half (to 1.5%) in 2020 in the worst case scenario’.
This new situation triggered by the pandemic does nothing but deepen the uncertainty already afflicting Latin American economies, which since 2013 have been going through either slowdown, stagnation or crisis.
According to World Bank figures, between 2000 and 2019 annual growth in Latin America and the Caribbean was 1.6% on average, well below other regions, including sub-Saharan Africa (3.5%). In per capita terms the figure works out at 0.56%, totally inadequate for reducing the high rates of poverty and inequality. The region started from a stagnation scenario in 2019: excluding Venezuela –whose economy contracted 35%– Latin America grew by 0.8% last year. The forecasts for 2020 pointed to growth of 1.8%, but the coronavirus crisis has put paid to this outlook: the Economist Intelligence Unit has cut its forecast to a range between -0.4 and +0.2% since its earlier prediction of 0.9%. The investment arm of Barclays Bank predicts that the Mexican economy will record a new 2% contraction in 2020, caused by the combination of three simultaneous shocks: the impact on value chains in manufactured goods due to the situation in China, the fall in tourism and the impact of coronavirus.
The COVID-19 crisis has another consequence: it pushes back yet further the possibility of accomplishing the structural reforms the region needs to enable its economies to be more productive and competitive and not get left behind by the digital revolution. Prior to this point, getting such transformations up and running had stalled because of the large number of elections that had been held over a short period (2017-19), the weakness of the governments that emerged from these elections (most, except in the case of Mexico, lacking sufficient parliamentary backing) and the marked popular response turning into street protests at the end of last year. The crisis in China, the US and the EU, plus the effects that all this has on the region, create an additional obstacle to getting structural reform programmes under way.
Nonetheless some countries, such as Uruguay and Ecuador, seem prepared to embark on this course, although in the case of the latter everything indicates that it is more a reform in terms of the current circumstances surrounding the advent of the pandemic than an attempt to resolve the country’s major structural problems. Lenín Moreno’s government announced three initiatives last week, including adjustments to spending, the size of the state and temporary contributions, new debt and a rise of 0.75% in the taxes levied on certain companies’ income.
In the case of Uruguay, the new government, headed by Luis Lacalle Pou since 1 March, has announced an increase in charges for public utilities to come into effect on 1 April. There will also be an increase in VAT on purchases made with debit and credit cards and on restaurant bills. While it is true that Uruguay has been suffering from a serious problem of excessive public spending for years (at 4.6%, it has highest budget deficit of any time in the last 30 years), this does not seem to be the time to apply an adjustment amid the prospect of coronavirus-induced global economic paralysis, especially in a region such as Latin America that seems likely to be part of the next wave of COVID-19 expansion.
*Conclusions*
In an interview published on 15 March in the Bogotá newspaper El Tiempo, the Colombian President Iván Duque was very clear when talking about the crisis looming over his country in particular and the region in general: ‘Coronavirus is the greatest challenge for all the health systems in the world and will be especially difficult for Latin American countries… it could overwhelm us’. The region is indeed set to face the coronavirus crisis with unquestionable disadvantages (involving manpower and goods, infrastructure and the lack of resources, above all financial resources) but also with certain elements working in its favour. With the crisis now imminent, Latin America has to make the most of its main comparative advantage to offset its structural weaknesses. And this main comparative advantage, together with a rural population that seems likely to avoid the spread of the virus due to its isolation, is time. It has bought time thanks to the fact that COVID-19 arrived in the region relatively late and when it comes to tackling the health challenge the authorities have witnessed both success stories (in China and South Korea) and mistakes (in the EU and the US).
Latin American countries lack the means, resources, technology and the capability needed to follow the South Korean example: embarking on a massive campaign to examine the population, regardless of whether or not they have symptoms and, in a context of complete transparency, administrating widespread tests to detect the virus. What the region can do is decide to take the most drastic measures as soon as possible, founded on scientific evidence and the experience of other countries that have been successful in managing outbreaks. It is a matter of ensuring this greater room for manoeuvre is harnessed in offsetting the weaknesses the region possesses in terms of human and technical resources as well as financial shortcomings.
Barring exceptions, all signs point to the majority of countries having taken more drastic and faster decisions than in the EU or the US. This is key in terms of slowing the spread of coronavirus, thereby buying time to avoid the collapse of health services afflicted by serious inadequacies. It does not however guarantee success.
*About the author:
· Carlos Malamud, Senior Analyst, Elcano Royal Institute | @CarlosMalamud
· Rogelio Núñez, Senior Research Fellow at the Elcano Royal Institute and Collaborating Lecturer at IELAT, University of Alcalá de Henares | @RNCASTELLANO
Source: This article was published by Elcano Royal Institute
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^Original versión in Spanish: El COVID-19 en América Latina: desafíos políticos, retos para los sistemas sanitarios e incertidumbre económica..
The post COVID-19 In Latin America: Political Challenges, Trials For Health Systems And Economic Uncertainty – Analysis appeared first on Eurasia Review. Reported by Eurasia Review 4 minutes ago.
By Carlos Malamud and Rogelio Núñez*
COVID-19, having emerged in Asia, has shifted its epicentre to Europe and the stage is now set for Latin America (and Africa) to play a prominent role in the next phase of expansion. The pandemic is entering a region that has advantages for combating the disease: it is learning from others’ experiences and is taking drastic steps well before its Asian and European counterparts. It also has clear disadvantages however. First, part of South America, although not Mexico, Central America and the Caribbean, is heading towards the southern winter –something that theoretically favours the spread of the virus–. Secondly, against a background of weaker economic growth, it confronts the crisis equipped with poorer tools, essentially involving inadequate health infrastructure, in the midst of an economic slowdown with politically weak governments and little scope for increasing public spending.
*Analysis*
What will be the impact COVID-19, or coronavirus, on Latin America, its societies, its governments and its economies? Will it be very different to what has happened in the rest of the world or will it be possible to discern some type of regional response, beyond the limitations that exist in many countries stemming from public health systems starved of resources? The coronavirus pandemic that paralysed China between December and March and has been afflicting Europe since February is now taking off in Latin America. Given the way the disease unfolds, however, everything suggests that in a few weeks, when China has overcome the crisis and the EU may see the pandemic in abeyance, COVID-19 will be undergoing rapid expansion in a Latin American region that, at its more southerly latitudes, will be heading towards winter.
More than 15,000 cases have been recorded in Latin America. At the time of writing (Monday, 30 March, at 12:00am), there has been a rapid increase compared with the preceding two weeks, as shown in Figure 1.Figure 1. Numbers of infected cases and deaths on the American continent
Country 14 March 2020 30 March 2020
Infected Deaths Infected Deaths
USA 2.340 50 142.746 2.489
Canada 200 1 6.320 65
Brazil 151 4.256 136
Chile 43 2.139 7
Ecuador 26 1 1.924 58
Mexico 15 993 20
Panama 36 1 989 24
Dominican Republic 11 859 39
Peru 38 852 18
Argentina 34 2 820 20
Colombia 16 702 10
Costa Rica 26 314 2
Uruguay 4 304 1
Cuba 4 139 3
Honduras 2 139 3
Venezuela 2 119 3
Guadeloupe 5 106 4
Bolivia 10 96 1
Martinique 6 93 1
Trinidad and Tobago 2 78 3
Paraguay 6 64 3
French Guiana 6 53 3
Aruba 2 50
Guatemala 1 34 1
Barbados 33
Jamaica 8 32 1
El Salvador 30
Bermuda 22
Haiti 15
The Bahamas 14
The Cayman Islands 12 1
Saint Martin 11
Dominica 11
Saint Lucia 9
Grenada 9
Guyana 1 8 1
Suriname 8
Curaçao 8 1
Antigua and Barbuda 7
Puerto Rico 3 5
Nicaragua 4 1
Anguilla 2
Belize 2
British Virgin Islands 2
Saint Kitts-Nevis 2
Saint Vincent & the Grenadines 1
Total without US-Canada and the Caribbean 2.999 55 15.371 362
Total 433 4 16.437 2.916
Source: drawn up by the authors with data from Worldometer COVID-19 Coronavirus Outbreak.
The spread of coronavirus and its arrival and expansion in Latin America need to be viewed from three interrelated perspectives that have a mutual bearing on one another: the political, the health related and the socio-economic. Their effects in Latin America involve an increase in economic uncertainty that runs parallel with the political and social tensions as the pressure on the administrations in general, and on health systems in particular, ratchets up.
-(1) A stress test for governments and a leadership test for presidents-
The spread of the pandemic through Latin America is going to have an initial impact with political ramifications, in addition to the predictable economic, social and health implications. The crisis comes at a time of profound weakness in the majority of the region’s governments, which in recent years have failed to provide an adequate response to the social demands of the emerging middle classes. And they have failed to do so precisely in one of the areas set to be most tested in this crisis: public services, especially health services. Together with economic stagnation and the existence of inefficient administrations riddled with corruption, the poor state of these public services (not only in health but also in education, transport and public safety) accounts for the growing and widespread disaffection unleashed at the end of 2019 in a series of popular protests that forced numerous governments in the region to change course (Ecuador cancelled an austerity plan and Chile embarked on a process of constitutional change) and even in one case (Bolivia) caused it to fall.
These governments will have to confront the coronavirus crisis while shackled by state apparatuses suffering from acute functional problems (underfinanced and, in some cases, short-staffed, lacking resources and training). From a political point of view, many administrations have a paucity of social leadership (Chile), face a new economic crisis of enormous dimensions (Argentina), find themselves coming to the end of their electoral terms (Peru and Ecuador), face the prospect of a highly polarised election campaign (Bolivia) or have extremely weak public administrations (most of Central America and the Caribbean) or are suffering from acute institutional and economic decline (Nicaragua and Venezuela) or run failed states (Haiti). The two great regional powers (Mexico and Brazil) will be most affected by the spread of coronavirus. Brazil is already the country with the greatest number of infections, while as far as Mexico is concerned, one of its great risks is its proximity to the US and its rapid rate of propagation of the disease.
Added to this is the non-existence of any effective supranational coordination. First, the Council of South American Defence, which is part of UNASUR, is afflicted by the same terminal crisis as its parent organisation. Secondly, the Pan American Health Organisation (PAHO), which like the OAS seeks to bring together the Pan-American system, is currently playing a very limited role. From next week PAHO will send support missions to those countries that ‘incur the greatest risk, such as Haiti and Venezuela. The list also includes Suriname, Guyana, Nicaragua, Honduras, Guatemala, Bolivia and Paraguay, as well as the islands of the eastern Caribbean. To date, however, no interregional or hemisphere-wide mechanism has been triggered to tackle the problem, which will be dealt with at the strictly national level, as in most parts of the world.
Despite all this, its geographical distance and isolation have so far worked in Latin America’s favour and its governments have been able to benefit from the experience of what has befallen Asia and Europe. This has helped the authorities to react early and take drastic measures sooner. Peru, with 71 cases, is the country that has taken the strictest measures. On 15 March the government led by Vizcarra announced a general quarantine, as well as the closure of its borders for 15 days to combat the pandemic: the exercise of constitutional rights relating to personal freedom and safety, the sanctity of the home and freedom of assembly and travel around the country have been curtailed.
With 45 cases, Argentina suspended classes at all levels and cancelled flights to Europe, the US and other countries with high rates of exposure. Classes were suspended in Chile before reaching 75 cases. Uruguay is notable for its rapid response: it suspended classes with only six cases. Also noteworthy in this regard are two Central American countries that, aware of the weakness of their health systems, have triggered protection measures with only one case (Guatemala) or none at all (El Salvador). The Guatemalan President, Alejandro Giammattei, placed meetings of more than 100 people in quarantine and suspended classes at all levels, while the Salvadoran leader, Nayib Bukele, ordered the civil protection authorities and the Ministry of Health to ban assemblies of more than 75 people and persuaded the legislative assembly –where the opposition wields a majority– to approve a national state of emergency for 30 days.
With 10 cases, the interim President of Bolivia, Jeanine Áñez, prohibited entry into the country for travellers arriving from China, Korea, Italy and Spain, suspended classes until the end of March and banned events involving more than 1,000 people. In Ecuador, after confirmation of the second COVID-19-related death and 28 cases, more measures were announced such as a ban on the entry of foreigners by air, land and sea. Border crossings were also closed, and mass public events were cancelled.
Colombia, with 24 recorded cases, closed the border with Venezuela and blocked entry to any foreigners who had been in European or Asian countries in the previous 14 days, while Colombians returning from these places need to submit to 14 days of quarantine and public events involving more than 500 people were cancelled. In the Colombian case, the closure of borders with Venezuela will certainly tend to aggravate the effects of what until now has been the greatest regional crisis, namely migration.
In Mexico, with 41 cases of infection, the government announced a series of measures to offset the spread of the coronavirus epidemic: the Easter holidays have been brought forward and extended to run from Friday 20 March to 20 April, entailing the suspension of classes for more than 30 million students. There has also been the suggestion that events involving more than 5,000 people should be cancelled and the recommendation that non-essential activities be suspended, with working from home encouraged between 23 March and 19 April.
In Brazil, despite having the largest number of infections, the pace of decision-making has been slower, given a certain degree of scorn for the illness on the part of President Bolsonaro. After his visit to Mar-a-Lago to meet Donald Trump, four members of the official delegation, among them the Press Secretary, Fabio Wajngarten, and the Ambassador in Washington, Nestor Forster, tested positive. The President himself was tested, although after a period of confusion he announced the result as negative. Following a major increase in the number of infections, the federal government has decided that each state and city should be responsible for taking the steps it deems appropriate. For now, it seems that the leader is not willing to impose measures of a general scope: Bolsonaro had even rejected the decision of the Brazilian Football Confederation (CBF) to suspend its competitions to limit the spread of the infection, and has accused the CBF of succumbing ‘to hysteria, and I don’t want that’.
Owing to the scale of what is happening and the Latin American tradition of presidentialism, the various leaders have adopted a conspicuous public role and taken on considerable protagonism, as well as direct oversight of the looming crisis. It is therefore set to be a test of leadership for a group of governors whose popularity and social support was already wavering (the Chilean President, Piñera, has an approval rating of just 10% in opinion polls, for example). Furthermore, in many cases they lack a protective net in the sense that these countries do not have effective or efficient administrative and health systems. This extreme personalisation of the way the crisis is handled is a risky gambit: on the one hand it has the virtue of creating high-profile leadership around a recognisable paternal figure who serves as a nexus and anchor for society at a moment of great uncertainty. On the other hand, it exposes the President to a clear risk: in the event of the situation deteriorating, all the fallout will land on his shoulders, aggravating the current problems of institutional disrepute and ungovernability that afflict Latin American countries. Argentina is a special case given the undercurrent of confrontation between the President, Alberto Fernández, and the Vice-president, Cristina Kirchner. For Fernández, successful management of the crisis would enable him to consolidate his role as the leader of the government.
The coronavirus crisis will also leave its mark on elections, falling as it does at a relatively busy electoral time. The pandemic has already caused the municipal elections in Paraguay to be postponed: ballots to appoint mayors and members of town councils to serve for the 2020-25 period, due to be held shortly, were put back to 8-28 November, and the period for parties to choose their candidates for mayors and town councillors was switched from 12 July to 2 August. The same cannot be said of the second round of municipal elections in the Dominican Republic due to go ahead this Sunday, in a country that as yet has very few cases but is due to hold a presidential election in May when the situation may well have deteriorated. Similarly, between April and May, when the pandemic may be reaching a peak in Latin America, a presidential election is scheduled in Bolivia (3 May) and a referendum on the constitutional change in Chile (26 April), when winter will be approaching in South America. Finally, the two latter were postponed. The possibility of postponing the referendum is already being discussed, and the same applies to the municipal election in Uruguay scheduled for 10 May.
-(2) The health scenario amid the prospect of coronavirus-
In the event that the COVID-19 outbreak in Latin America and the Caribbean spreads, the impact could be considerable, with the possibility of the health services being overwhelmed by massive demands for hospital care, particularly specialist services and intensive care. The region has both strengths and weaknesses when it comes to dealing with the spread of the virus. Prominent among the strengths are the time that has been bought and the lessons acquired over the last three months. The temporal buffer has been achieved thanks to the Pacific and Atlantic Oceans and the distance from events unfolding in Asia and Europe effectively forming a holding barrier. This has gained precious time and ensured that mistakes have not been repeated (drastic decisions have been taken earlier and strict control measures put in place).
The demographic structure also helps, with predominantly youthful populations, something that in principle should tend to reduce the number of acute cases. Lastly, and despite the increasingly urban nature of Latin America and the fact that the best and most efficient health services are clustered in the capitals and main cities, the lower densities of the less populous regions work in favour of social distancing and consequently help to slow the spread of the infection.
PAHO has recommended that countries intensify their COVID-19 preparation and response plans in anticipation of new cases appearing, and said that, ‘for several weeks, countries in the Americas have been preparing for the possible importation of cases of COVID-19… There are measures in place for detecting, diagnosing and caring for patients with the disease. A strong emphasis on stopping transmission continues to be an important objective while recognising that the situation may vary from country to country and will require tailored responses’.
The region faces the pandemic with several deficiencies, however, particularly shortcomings in health infrastructure and financing capacities. All its health systems aspire to universal coverage, but in practice most offer only partial coverage, as a 2019 report from the London School of Economics makes clear. Only Costa Rica and Uruguay meet the WHO recommendation that medium and medium-high income countries invest 6% of their GDP on healthcare. Mexico and Peru barely reach half the figure. And while some countries have lengthy and first-hand experience of combating infectious diseases such as chikungunya, zika, dengue fever and, in the case of Mexico, influenza A (H1N1), which has forced them to improve their public health surveillance systems, most have few laboratories with the ability to test samples to detect cases in under 24 hours, or centres or institutes for conducting field research into those infected with the virus, which would provide them with the autonomy for detecting it and acting accordingly. It is not so much a matter of research into the creation of vaccines as working on treatments that would enable the virus to be eradicated or its spread to be slowed.
Given that the key to tackling COVID-19 is not to focus on preventing its inevitable arrival but rather to prepare to restrict its spread appropriately, an adequate response involves having sufficient resources available: strengthening surveillance, training the health services, the prevention of propagation and the maintenance of essential services to slow down the transmission and save lives. It is in these areas where the Latin American health situation, which is very uneven and heterogeneous from country to country, suffers its main weaknesses. The most serious problem is that many of the health systems in the region lack the infrastructure and resources needed to tackle the rapid spread of the new virus. Owing to the characteristics of the disease, which has a low mortality rate but is highly contagious, appropriate venues are required not only for treating patients but also for isolating them. In many countries there are acute shortages of isolation quarters in terms of isolation rooms for infections transmitted by air and the hospital infrastructure.
The Global Health Security Index indicates that the protective capabilities of these systems are, in general terms, middle ranking, with four countries being classified as ‘worst prepared’ (Guatemala, El Salvador, Honduras and Venezuela).
Figure 2. Countries best and least prepared for an epidemic: capability to respond to an epidemic or pandemic in 2019
Venezuela is among the 20 worst-prepared nations to deal with the spread of an epidemic, while Guatemala, Haiti, Honduras and Guyana are highly vulnerable to new emergencies. The remaining countries suffer from less pronounced failings, but with their shortages of beds and emergency services their health services will be put to the test nonetheless. An article in The Lancet has pointed out that mortality rates go up in places with higher numbers of cases and when the system becomes overwhelmed. Amid the lack of infrastructure, human, technical and financial resources, the risk of healthcare overload in Latin America is greater and this is where the region’s greatest vulnerabilities lie. The number of hospital beds per 1,000 people is very low: the best-equipped countries (Cuba and Argentina) have a fivefold advantage over the least well-equipped (Guatemala emerges at less than 1), although only five of the highest-ranking countries in terms of beds exhibit high health security.
Countries that have a degree of security and equipment higher than average are in North America (the US and Canada) and the Southern Cone (Argentina, Uruguay, Brazil and Chile). At the other extreme, the most worrying situation is that of Central America, with the exception of Panama. While it does not seem to be an infection with a high rate of lethality, coronavirus is highly infectious, something that will prove to be a serious test for the health systems of Latin America; moreover, winter is approaching, a time when the virus will presumably become more active.
-(3) Limitations on economic growth that, if they deteriorate, could trigger recession-
The coronavirus pandemic –which has caused European and the US (as well as Asian and Latin American) stock markets to plunge, has sent raw material prices, in particular the oil price, tumbling and paralysed Chinese and EU economic expansion– is going to exert renewed and pronounced downward pressure on Latin American economic growth. The magnitude of the regional impact will depend on how long it takes China to return to normality (once it gets its own epidemic under control, as seems likely) and how the virus evolves in the US and the EU, which is now, according to the WHO, ‘the epicentre of the pandemic’.
For the time being it is thought that it will have moderate effects on Latin America, especially in comparison with Asia, but this will be determined by the duration and extent of the contagion and the type of measures governments feel obliged to take. Latin America will not be able to avoid a downturn in its economy, hobbled by the slow recovery of Chinese demand, by the acute European crisis and by a fall in US demand, all of which will translate into greater weakness in the prices of raw materials, the region’s main export. Latin American countries are already suffering from the current 2% contraction in Chinese output, with the added prospect of a more than likely European recession (the Director General of Economic and Financial Affairs for the European Commission, Maarten Verwey, has warned that ‘it is very likely that growth for the euro area and the EU as a whole will drop below zero this year and even potentially significantly’) and a halt to growth in the US, which is currently growing at above 2%.
The impact will extend across the whole of Latin America: those countries most closely tied to China will take a hit (not only due to the paralysis suffered by China but also the time it will take the country to return to normality) but similarly it will also inflict consequences on those countries more closely linked in terms of trade and tourism to the EU and the US, which are going to see their economies seize up until at least half-way through the year. In any event it is likely that exports of food will suffer less than other primary goods, such as energy and minerals.
The regional economies most directly exposed to the economic impact of Chinese decline are Brazil, Peru and Chile, due to China’s importance as an export market. Bolivia, Colombia, Ecuador and Mexico are highly exposed through commodity and agriculture prices. China is the largest trading partner for Peru (23% of exports), Brazil (28%) and Chile (32%). For Argentina, which sends China 75% of its soy and meat, some experts are predicting a fall of 5% in exports, equivalent to US$3.4 billion, and a decline in GDP of between 0.5 and 1.5%. Uruguay, which is highly dependent on its exports of meat, is in a similar situation. Mexico, Colombia and the Central American and Caribbean countries depend far less on Chinese demand and the impact will hit them from the US, where Mexico, for example, exports 80% of its output. The fall in demand from China and other countries where growth has also stalled, in conjunction with that of the US and EU, will translate into falls in raw material prices (for example, copper, iron ore and oil).
Oil prices have fallen to 1980s levels. This collapse puts the vast majority of oil-producing countries into difficulty, especially Venezuela, Ecuador, Mexico, Colombia, Brazil and Argentina. The direct consequences are very clear: if the price of a barrel of crude oil falls to US$33, fracking in the Argentine Vaca Muerta formation and exploitation of the Brazilian pre-salt layer are no longer viable, because the price does not cover the costs of production. And countries like Venezuela, where crude oil exports account for more than 90% of legal export income, are hit even harder. Coronavirus has been a severe blow to Ecuador, where the budget was drawn up on the assumption of an oil price of US$51 per barrel and it has now fallen to below US$35.
The impact on Mexico is even greater: the price of Mexican crude has broken through the floor of US$25 and there are forecasts that, if the current situation is prolonged by coronavirus and the tensions between Russia and Saudi Arabia, the US$20-barrier could be breached. This is a fall that would jeopardise Pemex, which needs the average price to remain above US$50 a barrel in order to turn a profit on its operations and to continue servicing its debt, which at US$110 billion is the highest of any oil company in the world. Now the collapse in prices puts the balance of public finances at risk. Pemex’s problems have a national impact because the company’s payments into the public coffers account for 18% of the federal budget and if the rating agencies end up cutting its credit rating, this could also drag Mexican sovereign debt downwards.
Apart from raw materials, the crisis is hitting Latin American countries in other areas, such as capital flight. Since the first infections outside China were reported in the middle of January, emerging countries have suffered capital withdrawal to the tune of more than €25.6 billion, according to the Institute of International Finance. In addition to capital outflows there have been exchange rate problems. With the dollar acting as a safe haven for the global economy, Latin American currencies have been devalued. The countries hit hardest by currency depreciation since COVID-19 started spreading are Brazil, Chile, Mexico, Argentina, Peru and Colombia; in the case of the latter, the dollar reached a level of 4,000 pesos, the highest exchange rate in the country’s history. Stock exchanges in the region have also suffered, such as the one in São Paulo, where the Bovespa index plummeted 15.6% last week, when it was obliged to suspend trading four times, as it had to do again on Monday 16 March. Something similar happened with the stock markets in Mexico, Argentina and Colombia.
The evolution of the Latin American economy is therefore linked to how the economies of China, the EU and the US perform and how long it takes for the pandemic to abate. The main risk lies in the epidemic not only propagating at a faster rate –which is inevitable– but that it lasts for longer than expected. As Federico Steinberg points out in an Elcano Royal Institute ARI, ‘it is still too early to know what the economic impact of COVID-19 will be. The key will be whether the virus can be brought under control in the second quarter of the year or whether, conversely, its effects prove more long lasting. In the former case we would be looking at a moderate impact, with a V shape, which would trim the odd decimal point from the growth in global output. In the latter, the situation could be much more severe, as the OECD suggested when it posited worldwide growth being cut in half (to 1.5%) in 2020 in the worst case scenario’.
This new situation triggered by the pandemic does nothing but deepen the uncertainty already afflicting Latin American economies, which since 2013 have been going through either slowdown, stagnation or crisis.
According to World Bank figures, between 2000 and 2019 annual growth in Latin America and the Caribbean was 1.6% on average, well below other regions, including sub-Saharan Africa (3.5%). In per capita terms the figure works out at 0.56%, totally inadequate for reducing the high rates of poverty and inequality. The region started from a stagnation scenario in 2019: excluding Venezuela –whose economy contracted 35%– Latin America grew by 0.8% last year. The forecasts for 2020 pointed to growth of 1.8%, but the coronavirus crisis has put paid to this outlook: the Economist Intelligence Unit has cut its forecast to a range between -0.4 and +0.2% since its earlier prediction of 0.9%. The investment arm of Barclays Bank predicts that the Mexican economy will record a new 2% contraction in 2020, caused by the combination of three simultaneous shocks: the impact on value chains in manufactured goods due to the situation in China, the fall in tourism and the impact of coronavirus.
The COVID-19 crisis has another consequence: it pushes back yet further the possibility of accomplishing the structural reforms the region needs to enable its economies to be more productive and competitive and not get left behind by the digital revolution. Prior to this point, getting such transformations up and running had stalled because of the large number of elections that had been held over a short period (2017-19), the weakness of the governments that emerged from these elections (most, except in the case of Mexico, lacking sufficient parliamentary backing) and the marked popular response turning into street protests at the end of last year. The crisis in China, the US and the EU, plus the effects that all this has on the region, create an additional obstacle to getting structural reform programmes under way.
Nonetheless some countries, such as Uruguay and Ecuador, seem prepared to embark on this course, although in the case of the latter everything indicates that it is more a reform in terms of the current circumstances surrounding the advent of the pandemic than an attempt to resolve the country’s major structural problems. Lenín Moreno’s government announced three initiatives last week, including adjustments to spending, the size of the state and temporary contributions, new debt and a rise of 0.75% in the taxes levied on certain companies’ income.
In the case of Uruguay, the new government, headed by Luis Lacalle Pou since 1 March, has announced an increase in charges for public utilities to come into effect on 1 April. There will also be an increase in VAT on purchases made with debit and credit cards and on restaurant bills. While it is true that Uruguay has been suffering from a serious problem of excessive public spending for years (at 4.6%, it has highest budget deficit of any time in the last 30 years), this does not seem to be the time to apply an adjustment amid the prospect of coronavirus-induced global economic paralysis, especially in a region such as Latin America that seems likely to be part of the next wave of COVID-19 expansion.
*Conclusions*
In an interview published on 15 March in the Bogotá newspaper El Tiempo, the Colombian President Iván Duque was very clear when talking about the crisis looming over his country in particular and the region in general: ‘Coronavirus is the greatest challenge for all the health systems in the world and will be especially difficult for Latin American countries… it could overwhelm us’. The region is indeed set to face the coronavirus crisis with unquestionable disadvantages (involving manpower and goods, infrastructure and the lack of resources, above all financial resources) but also with certain elements working in its favour. With the crisis now imminent, Latin America has to make the most of its main comparative advantage to offset its structural weaknesses. And this main comparative advantage, together with a rural population that seems likely to avoid the spread of the virus due to its isolation, is time. It has bought time thanks to the fact that COVID-19 arrived in the region relatively late and when it comes to tackling the health challenge the authorities have witnessed both success stories (in China and South Korea) and mistakes (in the EU and the US).
Latin American countries lack the means, resources, technology and the capability needed to follow the South Korean example: embarking on a massive campaign to examine the population, regardless of whether or not they have symptoms and, in a context of complete transparency, administrating widespread tests to detect the virus. What the region can do is decide to take the most drastic measures as soon as possible, founded on scientific evidence and the experience of other countries that have been successful in managing outbreaks. It is a matter of ensuring this greater room for manoeuvre is harnessed in offsetting the weaknesses the region possesses in terms of human and technical resources as well as financial shortcomings.
Barring exceptions, all signs point to the majority of countries having taken more drastic and faster decisions than in the EU or the US. This is key in terms of slowing the spread of coronavirus, thereby buying time to avoid the collapse of health services afflicted by serious inadequacies. It does not however guarantee success.
*About the author:
· Carlos Malamud, Senior Analyst, Elcano Royal Institute | @CarlosMalamud
· Rogelio Núñez, Senior Research Fellow at the Elcano Royal Institute and Collaborating Lecturer at IELAT, University of Alcalá de Henares | @RNCASTELLANO
Source: This article was published by Elcano Royal Institute
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^Original versión in Spanish: El COVID-19 en América Latina: desafíos políticos, retos para los sistemas sanitarios e incertidumbre económica..
The post COVID-19 In Latin America: Political Challenges, Trials For Health Systems And Economic Uncertainty – Analysis appeared first on Eurasia Review. Reported by Eurasia Review 4 minutes ago.
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COVID-19’s Harsh Lessons For Future Pandemics – OpEd
Entering its fourth month, COVID-19 continues to wreak havoc worldwide and challenge earlier notions of how best to respond to it. Its geographic scope, high infection and casualty toll and severe economic effect raise the bar for future pandemic response.
Four key lessons are emerging. First, travel bans alone delayed but did not halt the momentum of the virus. Second, while seen as draconian and debilitating for the economy, lockdowns present a viable containment strategy especially in light of limited testing capacity. Third, surveillance technologies — seen as intrusive in the West — have been a key factor in the success of several Asian countries in curtailing the pandemic. Fourth, failure to act fast has tragic consequences. Preparation before an outbreak is even more critical than prevention measures after the virus starts spreading.
When the outbreak began in Wuhan in late 2019, several countries quickly imposed travel restrictions, closed down consulates and evacuated their citizens from the central Chinese city. But travel bans only gave a false sense of security. At best, they served to slow the spread of the pandemic by a few days or weeks. Such bans also became futile once the virus landed onshore.
Some countries which were quick to impose travel bans against China are now among the hardest hit. Italy, the first EU country to impose travel restrictions against China, became the second ground zero of the contagion. At over 18,000 deaths, it already far exceeds the official casualty count in China. The United States — which enforced travel restrictions against China in early February — is now the epicentre of the pandemic with over 460,000 cases and approaching 16,000 fatalities.
As the virus spreads through Europe and North America, countries with travel restrictions against China and seriously affected Asian countries like South Korea now find themselves the subjects of similar measures.
While most countries adopted varying forms of travel restrictions to slow the spread of the coronavirus, there was an initial reluctance in instituting lockdowns. The success of South Korea, Taiwan and Singapore in containing the virus and minimising mortality gave hope that democratic societies would be better equipped to fight the pandemic without following authoritarian China’s draconian quarantine measures. These Asian democracies took resolute steps — such as rapid mass testing, rigorous contact tracing, social distancing and widespread information dissemination.
But aside from the culture of wearing face masks in public places, their success can also be attributed to their relative geography, size and population. Rolling out such measures across a continent like Europe or a continental country like the United States — with a larger population and open contiguous borders — is not easy. The coronavirus knows no political colour and neither do responses to it. East Asian democracies, for instance, integrated health and travel history data and employed digital surveillance technologies for risk assessment, contact tracing and monitoring quarantine compliance. Reforms undertaken in response to the 2003 SARS outbreak helped prepare these countries.
Europe and the United States did eventually adopt lockdown measures. While coming at a steep price to people’s mobility and the economy, these measures stalled the contagion’s spread. Military and police patrol the streets of Italy, Spain and France to implement curfews and stay-at-home orders. Some countries like Israel also rolled out mobile apps to track confirmed or suspected COVID-19 patients. In fact, despite its early success, Singapore eventually went into lockdown too as cases continue to rise. Many are also racing to deploy mass testing following Seoul’s recipe, with Germany rising to the occasion.
Much of developing Asia has also recently gone into lockdown. For countries with poor public health systems and compact neighbourhoods, curtailing local foot traffic is critical in slowing the spread of the virus while buying time to enhance local health capacity.
The coronavirus conundrum shows the folly of underestimating and being ill-prepared in the face of an invisible adversary. Given the complex web of global transport and trade networks, travel bans only gave a brief respite. Despite China’s opaque initial response to the outbreak, the international community watched on the sidelines as the world’s second largest economy pulled out all the stops in its struggle against an unseen but potent threat. Outside East Asia, little came in the way of preparation within that space of over two months.
Some countries may have thought that distance offers security and a better public health system provides insurance. Those miscalculations proved costly. In late January, even as the World Health Organization declared the outbreak a public health emergency of international concern, few countries took the problem seriously enough to implement measures beyond travel bans. As late as mid-March, a LGBTQ festival in the United States and concerts and a marathon in the United Kingdom went on. This complacency was disastrous. Thus, when the coronavirus did spill beyond China’s borders, it caught many governments by surprise, overwhelmed hospitals and sparked panic.
The scale of COVID-19 — over 1.5 million cases and over 95,000 deaths in over 200 countries and territories — and its huge economic and social impact will change how the world responds to similar health crises going forward. It will increase demand for transparency for countries facing outbreaks of a disease new to science. It will trigger conversations about the balance between civil liberties and private enterprise, and the exercise of state power in times of emergencies, as well as central–local government relations during crises. It may compel geopolitical rivals to cooperate even amid heightened suspicion and acrimony.
The pandemic is bridging the East–West political and cultural divide as countries around the world share best practices and offer assistance. Hopefully, much needed reforms will take root so the world can better respond to the next pandemic.
This article was published by East Asia Forum
The post COVID-19’s Harsh Lessons For Future Pandemics – OpEd appeared first on Eurasia Review. Reported by Eurasia Review 4 minutes ago.
Four key lessons are emerging. First, travel bans alone delayed but did not halt the momentum of the virus. Second, while seen as draconian and debilitating for the economy, lockdowns present a viable containment strategy especially in light of limited testing capacity. Third, surveillance technologies — seen as intrusive in the West — have been a key factor in the success of several Asian countries in curtailing the pandemic. Fourth, failure to act fast has tragic consequences. Preparation before an outbreak is even more critical than prevention measures after the virus starts spreading.
When the outbreak began in Wuhan in late 2019, several countries quickly imposed travel restrictions, closed down consulates and evacuated their citizens from the central Chinese city. But travel bans only gave a false sense of security. At best, they served to slow the spread of the pandemic by a few days or weeks. Such bans also became futile once the virus landed onshore.
Some countries which were quick to impose travel bans against China are now among the hardest hit. Italy, the first EU country to impose travel restrictions against China, became the second ground zero of the contagion. At over 18,000 deaths, it already far exceeds the official casualty count in China. The United States — which enforced travel restrictions against China in early February — is now the epicentre of the pandemic with over 460,000 cases and approaching 16,000 fatalities.
As the virus spreads through Europe and North America, countries with travel restrictions against China and seriously affected Asian countries like South Korea now find themselves the subjects of similar measures.
While most countries adopted varying forms of travel restrictions to slow the spread of the coronavirus, there was an initial reluctance in instituting lockdowns. The success of South Korea, Taiwan and Singapore in containing the virus and minimising mortality gave hope that democratic societies would be better equipped to fight the pandemic without following authoritarian China’s draconian quarantine measures. These Asian democracies took resolute steps — such as rapid mass testing, rigorous contact tracing, social distancing and widespread information dissemination.
But aside from the culture of wearing face masks in public places, their success can also be attributed to their relative geography, size and population. Rolling out such measures across a continent like Europe or a continental country like the United States — with a larger population and open contiguous borders — is not easy. The coronavirus knows no political colour and neither do responses to it. East Asian democracies, for instance, integrated health and travel history data and employed digital surveillance technologies for risk assessment, contact tracing and monitoring quarantine compliance. Reforms undertaken in response to the 2003 SARS outbreak helped prepare these countries.
Europe and the United States did eventually adopt lockdown measures. While coming at a steep price to people’s mobility and the economy, these measures stalled the contagion’s spread. Military and police patrol the streets of Italy, Spain and France to implement curfews and stay-at-home orders. Some countries like Israel also rolled out mobile apps to track confirmed or suspected COVID-19 patients. In fact, despite its early success, Singapore eventually went into lockdown too as cases continue to rise. Many are also racing to deploy mass testing following Seoul’s recipe, with Germany rising to the occasion.
Much of developing Asia has also recently gone into lockdown. For countries with poor public health systems and compact neighbourhoods, curtailing local foot traffic is critical in slowing the spread of the virus while buying time to enhance local health capacity.
The coronavirus conundrum shows the folly of underestimating and being ill-prepared in the face of an invisible adversary. Given the complex web of global transport and trade networks, travel bans only gave a brief respite. Despite China’s opaque initial response to the outbreak, the international community watched on the sidelines as the world’s second largest economy pulled out all the stops in its struggle against an unseen but potent threat. Outside East Asia, little came in the way of preparation within that space of over two months.
Some countries may have thought that distance offers security and a better public health system provides insurance. Those miscalculations proved costly. In late January, even as the World Health Organization declared the outbreak a public health emergency of international concern, few countries took the problem seriously enough to implement measures beyond travel bans. As late as mid-March, a LGBTQ festival in the United States and concerts and a marathon in the United Kingdom went on. This complacency was disastrous. Thus, when the coronavirus did spill beyond China’s borders, it caught many governments by surprise, overwhelmed hospitals and sparked panic.
The scale of COVID-19 — over 1.5 million cases and over 95,000 deaths in over 200 countries and territories — and its huge economic and social impact will change how the world responds to similar health crises going forward. It will increase demand for transparency for countries facing outbreaks of a disease new to science. It will trigger conversations about the balance between civil liberties and private enterprise, and the exercise of state power in times of emergencies, as well as central–local government relations during crises. It may compel geopolitical rivals to cooperate even amid heightened suspicion and acrimony.
The pandemic is bridging the East–West political and cultural divide as countries around the world share best practices and offer assistance. Hopefully, much needed reforms will take root so the world can better respond to the next pandemic.
This article was published by East Asia Forum
The post COVID-19’s Harsh Lessons For Future Pandemics – OpEd appeared first on Eurasia Review. Reported by Eurasia Review 4 minutes ago.
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