Who could have imagined that the Cold War could morph into a Cool War and now a COVID war? The Cold War was fought between the United States and the former Soviet Union, ending with the latter’s dissolution.
The Cool War is still festering with the US-China trade conflicts. The COVID-19 war is not about fighting each other, but about protecting their own citizens against a virus that does not distinguish between borders or political beliefs.
History will judge how in this COVID war, an authoritarian China had only 3,337 deaths (as of April 8), whereas the democratic United States and Great Britain, ranked the best prepared for pandemics, have reported deaths of 12,911 and 6,171 respectively.
There are four hard choices in this COVID war: moral, informational, political and economic.
The tough moral decision is between life versus livelihood. Almost all governments have rightly chosen to protect lives by locking down the economy. But with OECD estimates of a loss of 2 percent of GDP for every month of lockdown, the economic costs are mounting.
This explains why the US President is rooting for opening up as early as possible. With the estimates of deaths falling from 100,000 to 240,000 to perhaps 60,000 by August, the moral issue is whether the USA can afford to spend $1 trillion per month to prevent more deaths.
In poor developing countries, this is a vicious spiral. Every month of lockdown is pushing millions into poverty. Many such poor cannot wash hands daily because they have no running water or afford soap. States with no capacity to meet the pandemic may sacrifice lives just to maintain their fragile food chains and economies in order to survive. So far, global help is coming only in trickles.
The second hard choice is informational: do you believe scientists or the politicians? War operates on the fog of uncertainty. President Trump, who repeatedly says he is not a doctor, wants a timeline to re-open the economy.
Dr. Antony Fauci, the most respected epidemiologist in the U.S. government, says that the virus determines the timeline. So far, those political leaders who respect their scientific and medical advisers are doing best. I commend the Prime Ministers of Singapore, Malaysia and New Zealand for taking tough but decisive action to enforce lockdowns.
The third hard choice is political. The choice between capitalism or socialism in tackling the pandemic is a false binary. Capitalism is bankrupt when the kleptocracy eats most of the social capital.
Socialism cannot survive if losses are socialized whilst profits are privatized. The real issue is how under different political systems, the bureaucracy is able to effectively “test, trace and contain.”
In October 2019, John Hopkins Center for Health Security and the Economist Intelligence Unit compiled the Global Health Security Index that picked the US and UK as the number 1 and number 2 respectively in terms of preparedness to deal with pandemics. China was ranked 51 out of 195 countries listed.
In late November 2019, even before news of the Wuhan outbreak in December, the US National Center for Medical Intelligence, based on analysis of wire and computer intercepts, coupled with satellite images, was warning that what was going on in Wuhan was going to be a “cataclysmic event.”
On 29 January, the US Trade Adviser Peter Navarro had warned the White House that the coronavirus “full-blown pandemic,” could risk trillions of dollars in economic losses and the health of millions.
So why did the much-vaunted U.S. and UK bureaucracies delay in taking action to prevent the spreading of the pandemic?
To be fair, all bureaucracies, irrespective of political color, are slow to react to new and uncertain events.
Professor Mauro Ferrari, former President of the European Research Council, resigned because he failed to persuade the bureaucracy to allow “the very best scientists in the world should be provided with resources and opportunities to fight the pandemic, with new drugs, new vaccines, new diagnostic tools, new behavioral dynamic approaches based on science, to replace the oft-improvised intuitions of political leaders.”
His proposal “was passed on to different layers of European Commission administration, where I believe disintegrated upon impact.”
We can only deploy “whole-of-government” and “whole-of-society” to fight the COVID war if and only if we are able to knock common sense into obstinate and self-important bureaucratic silos. The parts must work together to save the whole.
The last but not least tough choice is how to re-open the economy, once the pandemic is under some semblance of control. The tough reality is that there is no formula, model or theory to guide us, given that the moral values, ideologies, information, resources and institutions are so different for different countries.
One thing is certain. The market on its own cannot respond without the backing of the state. Indeed, there is no “first best” or “best practice” way of deciding on how to re-open different economies.
Each country will have to experiment based on the best data on both the health conditions and economic facts.
The free market ideology has not prepared us for this, because we have good information on the largest corporations, but very poor and little up-to-date data on household and small business balance sheets, who are suffering most from the lockdowns.
Failing such data, the richest countries are engaging in “helicopter money,” as if helicopters spraying water randomly on raging forest fires can stop them. The successful economies are those that are able to target money to those who need them most. This is exactly the scientific “test, trace and target” methodology that works in tackling the pandemic. In practical terms, apply tools that “best fit” your own conditions on the ground.
In fighting this pandemic war, success is relative, but failure is contagious. If we individually and together fail as a community in making hard choices, more lives will be lost, jobs destroyed and morality shattered.
That is the Pandemic box that we have opened.