The pandemic and the long haul

Why governments get covid-19 wrong

Therapies and vaccines will come, but not for many months. Until then, politicians will have to work on the basics

Within the next few days the global recorded deaths from covid-19 will surpass 1m. 

Perhaps another 1m have gone unrecorded. 

Since the start of the pandemic, nine months ago, the weekly cases logged by the World Health Organisation have been trending very slowly upwards and, in the seven days to September 20th, breached 2m for the first time. 

The virus is burning through parts of the emerging world. India has been registering over 90,000 cases a day. Some European countries that thought they had suppressed the disease are in the throes of a second wave. In America the official death toll this week exceeded 200,000; the seven-day case total is rising in 26 states.

Those figures represent a lot of suffering. Roughly 1% of survivors have long-term viral damage such as crippling fatigue and scarred lungs. In developing countries, especially, bereavement is compounded by poverty and hunger. The northern winter will force people indoors, where the disease spreads much more easily than in the open air. Seasonal flu could add to the burden on health systems.

Amid the gloom, keep three things in mind. The statistics contain good news as well as bad. Treatments and medicines are making covid-19 less deadly: new vaccines and drugs will soon add to their effects. 

And societies have the tools to control the disease today. Yet it is here, in the basics of public health, where too many governments are still failing their people. Covid-19 will remain a threat for months, possibly years. They must do better.

Start with the numbers. The increase in Europe’s diagnosed cases reflects reality, but the global effect is an artefact of extra testing, which picks up cases that would have been missed. As the Briefing in this issue explains, our modelling suggests that the total number of actual infections has fallen substantially from its peak of over 5m a day in May. 

Extra testing is one reason why the fatality rate of the disease appears to be falling. In addition, countries like India, with an average age of 28, suffer fewer deaths because the virus is easier on the young than the elderly.

The fall in fatalities also reflects medical progress. Doctors now understand that organs other than the lungs, such as the heart and kidneys, are at risk and treat symptoms early. In British intensive-care wards, 90% of patients were on ventilators at the start of the pandemic; in June just 30% were. 

Drugs, including dexamethasone, a cheap steroid, reduce deaths in seriously ill patients by 20-30%. Fatalities in Europe are 90% lower than in the spring, though this gap will narrow as the disease spreads back into vulnerable groups.

More progress is in store. Monoclonal antibodies, which disable the virus, could be available by the end of the year. Although they are expensive, they promise to be useful after someone is infected or, for the high-risk, prophylactically. Vaccines will almost certainly follow, possibly very soon. As different medicines use different lines of attack, the benefits can be cumulative.

Yet, in the best of all possible worlds, the pandemic will remain a part of daily life well into 2021. Even if a vaccine emerges, nobody expects it to be 100% effective. Protection may be temporary or weak in the elderly, whose immune systems are less responsive. Making and administering billions of doses will take much of next year. Early vaccines may well need two shots, and complex “cold chains” to keep fresh. Medical glass could run short. 

There may be fights over who gets supplies first, leaving pools of infection among those who cannot elbow their way to the front of the queue. Multi-country polls suggest that a quarter of adults (including half of Russians) would refuse vaccination—another reason why the disease may persist.

Hence for the foreseeable future the first line of defence against covid-19 will remain testing and tracing, social distancing and clear government communication. There is no mystery about what this involves. And yet countries like America, Britain, Israel and Spain persist in getting it disastrously wrong.

One problem is the desire to escape a trade-off between shutting down to keep people alive and staying open so that life goes on. The right lauds Sweden for supposedly letting the virus rip while it makes a priority of the economy and liberty. But Sweden has a fatality rate of 58.1 per 100,000 and saw gdp fall by 8.3% in the second quarter alone, worse on both counts than Denmark, Finland and Norway. 

The left lauds New Zealand, which has shut down to save lives. It has suffered only 0.5 deaths per 100,000, but in the second quarter its economy shrank by 12.2%. By contrast, Taiwan remained more open but has seen 0.03 deaths per 100,000 and a 1.4% fall in gdp.

Blanket lockdowns like the new one in Israel are a sign that policy has failed. They are costly and unsustainable. Countries like Germany, South Korea and Taiwan have used fine-grained testing and tracing to spot individual super-spreading venues and slow the spread using quarantines. 

Germany identified abattoirs; South Korea contained outbreaks in a bar and churches. If testing is slow, as in France, it will fail. If contact-tracing is not trusted, as in Israel, where the job fell to the intelligence services, people will evade detection.

Governments must identify the trade-offs that make most economic and social sense. Masks are cheap and convenient and they work. Opening schools, as in Denmark and Germany, should be a priority; opening noisy, uninhibited places like bars should not. 

Governments, like Britain’s, that bark out a series of ever-changing orders which are broken with impunity by their own officials will find that compliance is low. Those, like British Columbia’s, that set principles and invite individuals, schools and workplaces to devise their own plans for realising them, will be able to sustain the effort in the months ahead.

When covid-19 struck, governments were taken by surprise and pulled the emergency brake. Today they have no such excuse. In the rush to normality, Spain let down its guard. Britain’s testing is not working, though cases have been climbing since July. 

America’s Centres for Disease Control and Prevention, once the world’s most respected public-health body, has been plagued by errors, poor leadership and presidential denigration. Israel’s leaders fell victim to hubris and infighting. 

The pandemic is far from over. It will abate, but governments must get a grip.

China is escalating its punishment diplomacy

Democracies must unite to stop Beijing’s coercive commercial statecraft against other nations

Jamil Anderlini 

China’s Xi Jinping. The country is flexing its muscles in commercial diplomacy © FT montage; Bloomberg; Dreamstime

Just two days before President Xi Jinping was scheduled to speak to Chancellor Angela Merkel last week, China blocked all pork imports from Germany.

The ostensible reason was the death of a single German wild boar from African swine fever, a disease already endemic in China. But some analysts jumped to a different conclusion. 

To them, this was the latest example of Beijing’s coercive commercial diplomacy — an evolving facet of Chinese statecraft that has come to dominate relations with several countries.

This coercion is never quite acknowledged publicly. As with German pork, Beijing announced it has blocked imports or opened investigations into a country’s products because of safety concerns or some other bureaucratic excuse. 

But these actions almost always target nations that have recently displeased Beijing; and they are intended to force a change in policy or behaviour. Blocking pork imports was a warning to Berlin not to join Washington’s campaign to isolate Beijing and to stop criticising China’s human rights record.

Australia provides an instructive example. Sino-Australian ties have been frosty for some time but plummeted into deep freeze in April after Canberra called for an independent investigation into the origins and initial handling of coronavirus. 

Within weeks, China had banned beef imports from several big Australian suppliers because of “labelling and certificate requirements”. It followed up with “anti-dumping” taxes on Australian barley, investigations into Australian wine imports and warnings for its citizens not to travel down under.

Before Australia, it had been Canada’s turn after authorities there detained Meng Wanzhou, chief financial officer of the Chinese tech giant Huawei, in late 2018 at the request of the US. 

In addition to jailing two Canadians on “national security” charges, Beijing issued travel warnings and blocked imports of Canadian soyabeans, canola and meat because of improper certification and “harmful organisms”.

Other targets include the Philippines and Japan because of flare-ups in territorial disputes, Sweden over criticism of China’s human rights record, the UK and Mongolia because of visits by the Dalai Lama and South Korea because it wanted to install a US-built missile defence system.

A secret threat is not much of a threat so, while denying any connection in public, Beijing will quietly make clear to the offending party that their actions, statements or policies are the reason for the punishment. State media often spell it out more clearly, as do China’s “wolf warrior” diplomats.

These warnings tend to be phrased like something out of The Godfather: “Nice car industry you have there Germany, pity if something were to happen to it if you don’t invite Huawei into your 5G networks.”

The extralegal, plausibly deniable measures are designed to avoid cases being brought at the World Trade Organization and to allow Beijing to dial the action up or down without a formal change in policy or law. Beijing has vastly expanded the practice, with more than half the identifiable examples since 2010 happening in the last three years. This is because the tactic works.

An early success was with Norway. Beijing shunned Oslo and blocked salmon imports on health grounds after the Nobel Peace Prize was awarded to imprisoned Chinese dissident Liu Xiaobo in 2010. 

After several years of punishment, Norway’s voting patterns in the UN shifted to align more closely with China, it supported Beijing’s observer status at the Arctic Council, its leaders promised not to meet the Dalai Lama and vowed not to do anything to undermine Beijing’s “one-China” policy.

Today, China claims to be the biggest trade partner to 130 countries and regions and the demonstration effect — “killing the chicken to scare the monkeys” as it is known in China — is often enough to cow others into compliance.

The coercion is calibrated to hurt influential industries that have nothing to do with the dispute. This usually convinces companies to lobby against their governments on Beijing’s behalf. 

Potential damage to China’s own industries is minimised. In Australia’s case, barley, wine and beef can be sourced from many other countries — but it provides 60 per cent of the iron ore China needs to make the steel for its infrastructure-led growth model. Punishing Aussie miners would be self-defeating.

This highlights the limits of such coercion. Wielding trade and market access as a political weapon can hurt your own companies and economy. It annihilates trust and pushes countries to diversify away from China to make them less vulnerable to coercion. This is already happening with South Korea, Japan and Taiwan. 

All now have formal policies to reduce their economic reliance on China. But the pushback has been piecemeal, with many countries preferring to capitulate to Beijing’s demands to resume trade and market access.

What is needed now is a multilateral mechanism for countries to study examples of this coercion. The next step is for the EU, US and other democracies to form a united front and formally agree they will not be played off against each other when individual countries are “punished” by Beijing.

Until now, the benefits of coercive commercial diplomacy have outweighed the costs. If other countries want Beijing to stop, then they need to reverse that equation.

The EU Merry-Go-Round

EU leaders have tended to operate on the assumption that Europe is inevitable, and that Europeans are inescapably bound together in a community of fate. But many citizens don’t see it that way, and if they aren’t given a more convincing rationale for European integration, the only inevitability will be the EU’s demise.

Ana Palacio

MADRID – In her first State of the European Union address, European Commission President Ursula von der Leyen offered a wide-ranging view of the current moment. 

She touted Europe’s recent achievements and identified its goals for the coming years. 

She dedicated significant attention to the European Green Deal and the Digital Agenda, and called for the completion of the banking union and capital-market integration. 

In normal times, it would have been a solid, if not particularly inspiring, performance. These are not normal times.

Yes, the policies and actions Von der Leyen described are important. But, at this point, no policy will fortify the EU’s foundations sufficiently. No grand-sounding program or budget increase will ensure its progress. 

No amount of common debt will guarantee its survival. To survive and thrive, Europe needs an overarching vision that captures the breadth of the challenges it faces, establishes a sense of common purpose among all citizens, and galvanizes popular support.

EU leaders have long peddled a hollow concept of European citizenship, one that emphasizes rights, rather than responsibilities and shared burdens. They have shown what the EU does, but not what the EU is for. 

And many refuse so much as to discuss the question. They believe the answer to be self-evident: Europe is inevitable, and Europeans are inescapably bound together in a community of fate.

But many citizens don’t see it that way. If they aren’t given a more convincing answer, the only inevitability will be the EU’s demise.

There have been glimmers of hope that EU leaders recognize the need to engage European citizens actively. For example, as part of the messy compromise that led to her confirmation as Commission president in 2019, Von der Leyen floated the idea of a Conference on the Future of Europe – a platform for engaging citizens in a wide-ranging debate on what the EU should look like and how to achieve it.

But the initiative has been delayed due to the COVID-19 pandemic. And even if it is implemented, it will most likely go the way of other much-touted citizen-outreach efforts, such as the underwhelming European Citizens’ Consultations of 2018. Discussions will receive plenty of press, a report will be drawn up, and a communiqué released. 

Then another crisis will arise, and EU leaders will all but forget it. Its only lasting impact will be the resignation and even resentment felt by the citizens who participated.

The Conference on the Future of Europe was relegated to a single passing reference in von der Leyen’s address, as she discussed the post-pandemic organization of health competencies within the EU. Moreover, the European Council has already rejected the possibility of any treaty change stemming from the Conference. 

The more engaged citizens are with Europe, the less they will need their national governments to act as intermediaries. The same anxiety has fueled opposition to a European-level tax, which would make the EU directly accountable to citizens.

But if the initiative has no real stakes, it will attract no significant citizen buy-in. The same goes for the European project more broadly: if citizens feel no sense of ownership over the EU and no sense that their fates are tied to those of their fellow Europeans, they will never offer anything more than passive support. And passive support simply will not get the EU or its member states – to where they need to be.

It is preposterous that in 2020, 11 years after the eurozone crisis, the European Commission president is still calling to complete the banking union in her state of the union address. Her statement on migration – it is a “European challenge,” to which we can find a solution, “if we are all ready to make compromises” – was one that should have been made and agreed to in 2015, at the height of the migration crisis. 

Even her comment on Belarus rang hollow, given the EU’s failure to agree on sanctions against President Aleksandr Lukashenko’s regime. And round and round we go.

It is time to get off this carousel. The bottom line is that if the EU is to survive, it will eventually have to alter the treaties. That will be possible only with the active support of Europeans who feel like they are part of the same story, and that it ends well for some only if it ends well for all. 

The polarization and fragmentation that characterize today’s political environment are not excuses to postpone forging ahead; they are reasons to act.

The COVID-19 pandemic could help here, not only by highlighting just how intertwined our fates are, but also by disrupting the way we live in – and think about – the world. 

With so much up in the air, the EU has a rare opportunity to ensure that what falls lands in a new configuration that reflects a true and viable European vision.

Ana Palacio, a former minister of foreign affairs of Spain and former senior vice president and general counsel of the World Bank Group, is a visiting lecturer at Georgetown University.

viernes, octubre 09, 2020



 Thoughts at 30,000 Feet

Thoughts in and around geopolitics.

By: George Friedman

There was a time when a flight to a place far away would thrill me. But that was long ago, and it is no longer the case. Perhaps because I now value more what I have at home than the vague danger of something far away. 

Perhaps because I have become jaded and little surprises me. Perhaps because there is nothing lonelier than looking out a window at nothingness. 

I flew recently for more than 30 hours, staring out a window, day and night, at nothingness. I discovered something I didn’t know before: that travel isolates you from the world more completely than perhaps anything but death. Your only companion is thought.

The solace of such a trip is that you are free to think about anything you want, without interruption. At a time when relations between nations are defined by relative infection rates, I thought about COVID-19, and about the doctors who speak about it. 

For physicians, saving lives is their mission, and I hold it a noble end. But life is a means toward more extraordinary ends, not an end in itself. In the midst of mortal danger, it is difficult to imagine ends other than surviving, but I have found that it is precisely at that moment that flashes of what might be surge through your mind. 

Survival is the means, and that is the task of physicians. Living is best addressed by poets and artists. When staying alive is all there is, life is lost.

Over time, the definition of what it means to be human has subtly changed. Rembrandt painted a magnificent painting about an anatomy lesson. The guest of honor is a criminal who had been executed earlier that day. 

Who he is doesn’t matter; he is simply a corpse whose face is shrouded, and from whom these learned men can learn about the human body. An arm has already been stripped of skin and meat, and the participants are mesmerized. There is something noble in understanding the human body as the center of all life. 

But the question that arises is whether the human body is all life is. Organs, enzymes and liquids allow us to live, but we must ask, especially in the time of COVID-19, having succeeded in living, now what? I think that this painting redefines life in a radical way that stays with us. 

Life is about the organs found in an autopsy and about delaying death, which can’t be avoided completely. This is at the heart of the human experience. At 30,000 feet, that is a gloomy thought.

I also recalled a sculpture I love by Michelangelo, called Bacchus, about the life of drink but also about the life of pleasure and sensuality. The sculpture shows a well-built man who could be a soldier, drinking and clearly getting drunk. Behind him stands the god Bacchus, urging him on and taking pleasure at his surrender to joy.

These two works of art depict different ways to escape life. One way is through death. The other is through Bacchus. They are very different escapes, and depending on how death happened, they compete well. But life is painful and there is ultimately no victory, only the small successes that make us human.

There is a Latin saying, attributed to the Greek philosopher Epictetus: Dum vivimus, vivamus. It means: While we live, let us live. I always like to say it with a snarl Death is coming and all the doctors and their horses will not save us from our fate, so let us live. I look at Bacchus and say, “Yes, that is the challenge hurled at death.” 

Then I ask, “Is that what Epictetus really meant when he spoke of life?” 

Sure, it is better than thinking of life as a good cardiogram. And certainly it reminds all of great and terrible things we did – the things that make up life. But a human being staggering into oblivion could not be what was imagined.

There is a third work of art, also by Michelangelo, called David. It is a sculpture of a man as he should be: erect, muscled, alert. He is carrying a rock. That’s important and appropriate. David is the name of the Battle King, who defeated Goliath with a sling and stone, then waged a relentless campaign for decades to take control of Israel from a king unworthy of his position.

David was an unbending and courageous warrior. His life was a means to an end, and in risking his life prudently, he always measured life and death without being the slave of either. There are those who court death – the crazy brave, as they were called – and those who flee from it. He did neither. But he was more than simply a warrior. He loved life, from women to luxury. As much as Bacchus, he drank, and as much as Rembrandt’s anatomy, he clearly is shown here as cherishing his.

When we say “Dum vivimus, vivamus,” we are not thinking of a man in the hands of Bacchus, nor of a room full of physicians (certainly not physicians for whom staying alive is an end in itself). We are thinking of someone like David, who waged war, loved when it was time to love, and risked his life when it was time for that.

“Dum vivimus, vivamus” means that we are all going to die, and that the most important thing is not how long we live but how well we fill life with the joys that it offers us. Without life, we can’t do that, but if we obsess over staying alive, we won’t do that. David risked all to kill Goliath, and having done that, I am sure he had a good time until the next time duty called.

And this is the point I am driving at. Among the joys of life is doing your duty and, in doing your duty, living or dying, having lived as a human being should. And if you live, then live well, with all the pleasures you have earned. What your duty is is a matter for you, but that you should risk something is the true meaning of “Dum vivimus, vivamus.” You can’t live without risk, and the only meaningful risk comes from duty.

Rembrandt must have known the banality of life his painting displayed. He knew there was more, even if his heirs have forgotten it. Michelangelo knew that Bacchus was not life. I know that because he also created the perfect image of the Battle King.

And such are the thoughts that 30 hours staring out a window at the abyss gave me.  

 So No Stimulus Bill This Month … Really?


Less than 24 hours after beating the apparently wimpiest case of covid-19 ever, Donald Trump decided that his subjects’ lives aren’t exciting enough. So he called off Congressional talks on the latest stimulus bill.

Never a dull moment in pre-apocalypse America.

There’s just one problem: Virtually everyone from small businesses, to renters, to mortgage holders, to airlines, to movie chains, to cruise lines, to growth stock money managers has been holding on by their fingernails, hoping for the infusion of newly created Fed cash that might buy them another few months of normal life. Today that hope evaporated.

Among the likely results:

- Plunging consumer spending. 

Those $1,200 checks were nice, and those $600 weekly unemployment checks were even nicer. But both have stopped coming and the money is gone. In the past couple of months, increasingly desperate Americans have been dipping into savings to put food on the table and gas in the car. 

Now that further help is definitely not on the way they’ll have to keep eating their already meager seed corn while cutting back on pretty much everything. Less stuff will be bought, the economy will roll over, employment will plunge again and we’ll be back in that capital-D Depression we just crawled out of.

- Industry-wide bankruptcies. 

Some recent headlines reveal the hardest-hit sectors:

- Regal Cinemas, the nation’s second-largest theater chain, to close 

- Airline Shares Dive As Trump Spikes Stimulus Talks

- U.S. oil producers on pace for most bankruptcies since last oil downturn

- U.S. Small Business Bankruptcies up 33% Year to Date

These guys, among many others, need massive, targeted bailouts and they need them now. After the election (more realistically after several months of post-election turmoil) will be too late. Multi-thousand-worker layoff announcements will become a daily occurrence, as will high-profile failures.

- Residential real estate bust. 

The end of mortgage and rent forbearance will cause an avalanche of defaults as homeowners can neither make their payments nor refinance, while renters can’t cover the rent that their landlords are now free to demand. Speaking of landlords, rising defaults will send increasing numbers of them into defaults of their own.

- Plunging stock prices. 

The stock market has recently been playing a game with the Fed in which the Fed tries to tighten (or at least stop easing) and stocks respond by tanking. 

The Fed then capitulates and starts easing again, after which stocks resume their ascent of Bubble Mountain.

This time around stocks were rising on the very specific promise of a new batch of $1,200 checks being sent to Millennial gamers Robinhood stock traders, who would immediately convert their windfall into Big Tech call options. 

Take that away and the environment is suddenly hostile for stocks that recently exceeded dot-com era overvaluation levels. 

Today’s 500-point reversal on the Dow when stimulus talks failed illustrates how fast and furious the action might be in a non-bailout environment.

Oh, and don’t forget that it’s October, the month when, for some reason, huge crashes like to happen.

Of course everyone at the Fed, along with every politician up for re-election in November, knows all this and is absolutely terrified. So we’re back to The Number, i.e., the amount by which stocks have to decline to turn fear into panic and generate the next big liquidity infusion.

It might come tomorrow. It might come three weeks from now. 

Everything depends on the amount of punishment the political/financial Establishment is willing to endure.

The one certainty is that no one with money at risk should even think of taking a vacation this month.