I want to talk about the medium term (6-12 months) outcomes of developing nations, where lower state capacity will lead to less effective containment strategies, and continued economic disruption.
At the moment, the discussions are still primarily focused on immediate actions responding to the crisis: isolation and social distancing methods, testing and screening, PPE, and of course treatment and vaccinations. Whatever the outcome of these endeavours, it is very clear that the medium-term outcomes for one country will be different from those in another. Already it has been shown that the correct mix of policy and culture can result in the containment of the virus (Taiwan, etc.).
It is also likely that the success of these containment strategies is a function of culture, state capacity and resources thrown at these efforts. This is one of the reasons we have already seen swift (relatively successful) containment of the virus in some countries versus an exponential increase in others. Because of this we will possibly see a divergence in outcomes from containment efforts across countries. This will eventually lead to a bifurcation between countries which have achieved containment. “Contained” countries and countries in which containment efforts are still being pursued “uncontained”.
We are already seeing that “second waves” of cases are being reintroduced to countries as people travel from “uncontained” to “contained” countries, in this case US/EU to China. Once a country has the virus contained within its own borders the only way that it will be spread there is through incoming passengers. And this is being claimed by China already that all the new cases being found there are from incoming passengers.
Divergence of containment outcomes
We’ve seen the immediate and effective responses in some Asian countries which resulted in containment in the “first wave” of the pandemic moving from China to places such as Singapore and Taiwan. This contrasts with the slower responses seen in some countries in Europe and the US, where political will and dissenting opinions caused a much slower response which has increased the spread of the virus in these countries. As of writing this on the 20th of March, 2020, we are still seeing much lower levels of testing across countries as well as large differences in the way that “lock downs” (societal enforced reductions in movement and social distancing) have been implemented.
Thus far low income countries have not seen large breakouts of cases, this could be for a number of reasons such as, but not limited to:
- Lower average population age, meaning the severely impacted demographics are less prevalent.
- Tropical climate, which could reduce the rates of spreading.
- Large numbers of other tropical disease, and so COVID-19 is possibly being misdiagnosed.
- Very weak testing regimes, so cases which are there would be hard to confirm.
It is possible and likely that the prevalence of COVID-19 is higher than what is currently being reported as with other countries which have are bearing the brunt of the pandemic now.
Once the virus has been established, developing nations will likely have a much harder time of containing the virus:
- The reduced health infrastructure in many countries mean that they will be ill equipped for a pandemic which spreads extremely quickly.
- Weaker institutions mean that social distancing measures and “lock downs” will be harder to enforce.
- Lower savings rates, and low levels of formal employment mean that most households will not be able to go without working for the extended periods of time that a lockdown requires.
- Advanced testing regimes will be harder to implement with the lower state capacities of many of these countries.
Because of these reasons, once developed countries have been able to contain the virus it is likely that poorer countries in the developing world will still be battling against the pandemic. A bifurcation of states will occur where countries which have contained the virus will enact strict travel and quarantine measures on countries where the virus is not yet contained. This will reduce economic progress in these countries by greatly limiting some of the major sectors (such as tourism) of their economies over a medium to long term period. At the same time exacerbating population unrest and further destabilising the global economy.
Recommendations
In order to reduce the lasting impact of COVID-19 on these fragile economies there are several policy measures which could be enacted by OECD countries in the short to medium term:
- Formalise the labelling of countries as being “contained” and “uncontained” by an intergovernmental organization (i.e. WHO) which helps free travel between “contained” regions to reduces further disruptions to the formal economy.
- Create a solid framework around permissive international travel which includes RT-PCR testing and temperature tests on embarkation, disembarkation and during flights for all travellers moving between “contained” and “uncontained” countries. As well as any other novel methods of detecting the virus to minimise the potential spread.
- Support developing nations so that they can catch up quickly with “contained” countries through funding, resources and expertise.
