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An economy in lockdown: How long could it last?

05 Apr 2020

By Uwin Lugoda
The world is currently fighting one of the toughest battles it has ever faced against an invisible enemy – Covid-19. As you know by now, the pandemic has led almost all countries to impose indefinite curfews and lockdowns in an attempt to stop the spread of the virus, which as a result has affected many sectors from public transportation to private businesses. The curfews and lockdowns have now given rise to the secondary wave of effects of the spread, which is a hit to every country’s economy. Similar to other nations, Sri Lanka too is now experiencing this secondary wave of effects of the virus as the country’s economy has drastically slowed down. On 2 March, the Advocata Institute hosted an online panel discussion titled “Sri Lankan economy after Covid-19”, featuring Advocata Institute Chair – Academic Programme Dr. Sarath Rajapatirana, Verité Research Executive Director Dr. Nishan de Mel, and National University of Singapore Associate Professor Razeen Sally. The discussion was moderated by Advocata Institute Research Manager Aneetha Warusavitarana. When asked how long Sri Lanka’s economy could endure a curfew as that of present, Dr. De Mel used two analogies to explain why the casualties taken into consideration should not only be the ones that are a direct result of the virus, but also those arising from an economic lockdown. “Imagine a group of serial killers rampaging through the country and it is very hard to catch them because they keep moving from one village to another. Because of this, every time we know they are in a village, we bomb the whole village. This way, you would definitely get the killers, but if your goal is to protect other human beings and society as a whole, you should not only count how many murders you prevented but also how many people you had to kill in getting to the serial killers. This is the same as not counting the economic casualties alongside the deaths that occur from the virus itself,” he said. He explained that we should take into consideration the casualties that would occur if the lockdown continues, which include deaths due to difficulties in acquiring proper medication and healthcare services as well as the inability to go to hospitals. “The second analogy I have is about cricket. We have to decide if we are in a Test match or a T20 because in a T20 match, you are willing to go after the runs and do not mind losing wickets, whereas in a Test match, you understand that you must go after the runs and also preserve your wickets,” he noted. Dr. De Mel said that during this period of lockdowns and curfews, we lose a wicket every week because there is going to be lockdown fatigue, and society cannot live under curfew for a prolonged period of time. “You have to know when to lose wickets. In a 50-over match, for instance, you decide to accelerate at a certain time because that is when you are willing to risk wickets for runs, but you do not want to do that in the early stages of the match,” he further explained. According to Dr. De Mel, there are management strategies that can be generated by recognising the country’s mitigation level and how the disease is going to progress. He emphasised that the fundamental epidemiological calculation is “will our healthcare system manage to cope as the disease spreads?” plus “how do we keep the peak spread of the disease at a level the healthcare system can cope with?”. Having done the calculations, Dr. De Mel stated that there are several levels of mitigation depending on how many people an infected person would infect. Accordingly, if one infected person infects one or zero people, then the disease does not increase or would even decline with time, in terms of the number of infected persons. This is a suppression strategy. He stated that Sri Lanka cannot run a suppression strategy until a vaccine is found. “If we continue with the curfew or further suppression than the Government is currently implementing, that might be unsustainable and the economic casualties might pile up quite fast in a way that is unmanageable. Also, the duration to run that sort of strategy would be too long. Therefore, we can look at implementing a mitigation strategy which imposes less suppression and allows a certain level of economic activity to take place,” he said. Dr. De Mel explained that Sri Lanka currently has a spread rate of over 1%. When calculated, it seems the country might be able to cope with a spread rate of 1.5%, in which case the peak case numbers would come in 253 days. “Even if we see a very high spread rate of 3.5% like Italy in the early days of the pandemic, the peak will not come for 66 days. This is a long match,” he said, adding that if Sri Lanka manages a mitigation strategy with a spread rate of 2%, the peak would come in 143 days and might still be manageable. According to Dr. De Mel, Sri Lanka first has to make a strategic decision on whether it is aiming to achieve suppression, in which case the country would have to stay in curfew/lockdown for the next nine months or more until a vaccine is deployed in the country. However, if suppression is not the aim, he questioned what mitigation strategy the country is running and if Sri Lanka could keep calibrating it in order to cope with the healthcare system. However, adding his insights on the topic, Dr. Rajapathirana stated that he does not think that the numbers are as discouraging as Dr. De Mel projects and stated that he is willing to bet that, similar to the SARS (severe acute respiratory syndrome) virus which came earlier, the world will find a proper protocol to combat Covid-19 sooner than anticipated. Possible strategy Dr. De Mel stated that some Southeast Asian countries like Singapore have managed to prepare for the incoming economic shock by using the quarantine situation to help their economy. Despite having a total of 1,114 cases in the country, 463 active cases, and around 4,000 people in quarantine, as of 3 March, Singapore has not gone into the level of economic lockdown as Sri Lanka. “They are keeping the country’s economy working and running, while having intelligent measures to control the rate of the spread (of the virus). I think Sri Lanka should use Singapore as an inspiration,” he noted, adding that similar to Singapore, Sri Lanka could use the quarantine situation to help the economy by creating new jobs for the building of hospital infrastructure and assisting doctors and other healthcare personnel. He stated that these are good options in terms of generating an income for the people and enabling them to not only live, but also to prepare to reduce the spread of the virus. Further explaining, he said the Government could also create jobs in quarantine centres, similar to Singapore where they re-purposed some of their top hotels as quarantine centres by paying the hotels a baseline, so that people are less resistant to the quarantine process. Another option he proposed was for the apparel sector, which is currently having trouble exporting, in order to manufacture masks. “We can use jobs in manufacturing masks; if the apparel sector is having trouble exporting, they can manufacture masks. We tell people not to wear masks today because we want to keep enough for the healthcare workers, but Taiwan has reduced the spread by becoming a mask-wearing society. We can also become a mask-wearing society for a while because sometimes, you may have the virus without even knowing; it might not prevent you from getting the virus, but it might prevent you from spreading it,” he explained. However, Prof. Sally attributed Singapore’s success to them having identified the problem early on and having addressed it right away. He stated that the restrictions came into play two months ago and have been gradually increased since. “I think the key point is that Singapore addressed the issue early (on) and have had 50,000 people tested so far, which is significant considering their total population. They also have very sophisticated contract tracing. Of course, the cumulative effect of all this has helped the country not to (go into) lockdown in spite of closing their borders,” Prof. Sally emphasised. He said that these initial conditions do not apply in Sri Lanka and therefore the country cannot follow the kind of staggered strategy Singapore follows. He further explained that taking the local context into account, a dramatic move from mitigation to suppression is probably wise, given that the modelling shows that continuing with a mitigation strategy would have resulted in far too many deaths and eventually overwhelmed the country’s healthcare system. Dr. De Mel stated that a lot of instability is created in the current methodology and that the current unstable curfew is making it hard for small-scale suppliers to plan out their businesses. However, he added that if Parliament creates a stable policy that allows the people in these industries to flourish and succeed, it will help manage the spread of the virus. As for the people who are unable to get employment during this time, Dr. De Mel suggested getting them into education by utilising the enormous vocational training apparatus spread throughout the country. “This is a great time to tell people to come take courses. If the Government gives it out for free and we provide some sort of technology to get them connected with the programmes, we will train them until they can go back to work. This will minimally reduce the shock on the economy and maybe people will come out of it better equipped,” he said. According to Dr. De Mel, Sri Lanka has to move from the military providing quarantine services to society providing them because that is a good way to create jobs and achieve the quarantine activity, while also preventing the spread of the virus. “I want to focus on jobs and income because if the supply chains are working, then that too would help us mitigate the virus. It’s a win-win.”


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