Reducing the spread of the Covid-19 virus to near zero is, in the words of a new international report, “likely the big ‘unlock’ for most economies”. It’s that which will give people the confidence to plan the recovery and shape new priorities and business models, says Rod Oram
We’ve learnt a lot in the 10 days since testing uncovered our first case of community transmission of Covid-19 in 102 days – we being people in government, health, politics, business and society at large.
We will now be much better at border controls, quarantines and regional lockdowns; at testing, tracking and tracing; and at running our homes, schools, businesses and other aspects of our lives under Covid constraints.
If we get really good at all that, we can gradually re-open our border, test and quarantine those arriving and very swiftly stamp out any flare-ups in Covid cases. And do so without having to resort to periods of tighter restrictions and higher alert levels.
But over the past 10 days we could have headed calamitously in the opposite direction. We could have had a rapidly escalating outbreak, as Victoria and many other jurisdictions have had. Like their governments, ours had failed to deliver on its promises. But it scrambled to snatch victory from imminent defeat in this round against the virus.
If the government, and wider society, have finally learnt the lessons of utter vigilance, diligence and constant innovation we will figure out how to live reasonably normal lives while keeping the virus at bay.
Our recent progress, reported here by Newsroom, seems to have strengthened our broad national consensus to stick with Covid elimination as our best strategy for fighting the virus and improving our health and economic outcomes – with elimination meaning, as widely defined around the world, as very rapidly preventing the spread of new Covid cases.
Thankfully, no political party is advocating the opposite, broadly defined as the Swedish model of few restrictions but living with much higher levels of illness and death. However, there are still some calls for that model, particularly from a few people in business. But the very strong evidence for the superiority of our strategy over that was laid out by my Newsroom colleague Marc Daalder in this recent analysis.
A good guide to what we’ve achieved since the pandemic began, and what we still need to do, was published in a blog post by University of Otago public health academics last month.
For example, our Covid death rate of 4.4 per million people is by far the lowest among developed countries. Meanwhile, the US’s is 100 times larger, Sweden’s 145 times, the UK’s 150 times and Belgium’s 192 times, making it the deadliest of OECD countries.
There are still some organisations and people arguing there is a trade-off between saving lives and the economic cost of doing so. Our Productivity Commission is one. In research it released in May, it concluded our Government’s extension of Alert Level 4 for five days in April avoided a further 30 Covid deaths and gained our population 239 “quality-adjusted life years” but it came at a net economic cost (defined as lost GDP) of $741 million.
The Commission argued that the Government should apply such cost-benefit analysis to all decisions it makes about alert levels and other restrictions. Very disappointingly and uncharacteristically, it used, though, unconscionably narrow definitions of health benefits and economic costs.
Far more insightful analysis was recently released by McKinsey, a firm of international consultants. Reducing the spread of the virus to near zero through multi-faceted public health responses is the first and essential step in giving people confidence to begin rebuilding their lives and their economic activity. It is “likely the big ‘unlock’ for most economies.”
Its latest study draws on the matrix it established early in the pandemic which plots public health responses against economic responses. The matrix creates nine scenarios for the economic impact of Covid-19.
This latest analysis shows the range of possible outcomes for OECD countries as a group. The best outcome, scenario A3, will be if they rapidly and effectively control the virus and deliver effective financial mechanisms to support businesses and people through the pandemic. But the worst outcome, scenario B2 – large, recurring surges in cases and restrictions to fight them, and inadequate financial support – will result in cumulative GDP losses nine times greater.
McKinsey doesn’t name countries. But our health and economic responses so far, and the outcomes we’ve achieved, would likely qualify us for the first category; while the responses and outcomes of the US and UK make them exemplars of the second.
Clearly, though, we have lots still to do. McKinsey says five main measures (which align well with the five point to-do-list of the Otago academics’ blog) help build and maintain people’s confidence and in turn support the rebuilding of economic activity:
– new case counts are low, and testing is sufficiently widespread for official counts (and related indicators such as the rate of positive tests) to represent accurately actual conditions;
– the number of serious Covid-19 cases that require hospitalisation can be effectively handled by the health system without impairing its capacity to deliver normal medical treatment;
-communication about health interventions by leaders is credible, consistent, and provided sufficiently in advance to let families and the public and private sectors plan;
– public health measures are delivered effectively and are sufficient to prevent increases in transmission; and public health interventions, including those deployed for high-risk and vulnerable populations, do not structurally prevent economic recovery.
“Countries that have restored confidence—or are close to doing so—have seen economic activity return or begin to return to pre-crisis levels,” McKinsey says.
So, we have to keep learning fast and implementing effectively – in our health and our economic responses. This will keep testing all of us but particularly our politicians. Over the next eight weeks to our election we need from them constructive and credible policies for continuing our pandemic progress.
Opposition parties won’t win over many voters if they only criticise the parties in the current Government. Similarly, running on their record might not guarantee re-election for the incumbents.
To make informed decisions at the election, we also need from all parties ambitious and practical proposals to build a far stronger, more resilient and wealthier New Zealand in this world permanently changed by Covid and the climate crisis. There’s plenty of insightful analysis of those global threats and opportunities. One example is The Great Reset work by the World Economic Forum.
Current times are “a unique window of opportunity to shape the recovery [and determine] the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons,” the Forum says.
Sir Peter Gluckman, the former Prime Minister’s Chief Science Adviser and one of the founders of Koi Tū: The Centre for Informed Futures at the University of Auckland, offered a New Zealand perspective on this in a speech this week.
“Domestically we continue to accumulate issues in a too hard basket – transgenerational disadvantage, incomplete resolution of our bicultural and multi-ethnic nature, issues over water and land use, and a persistent complacency over our place in the world, our low productivity and a somewhat narrow view of our economic future.”
“There are pressures to return to a pre-Covid ‘business as usual’ mindset, but this is unrealistic for many. Instead this is the opportunity for significant reflection and for deep and inclusive conversation.”