Twice bitten …
Samoa’s tragic history explains its recent travel restrictions.
At the height of the 1918 influenza epidemic that was killing New Zealanders, the Talune sailed into Samoa’s capital, Apia, from Auckland carrying cargo and passengers – and the Spanish flu virus.
The Talune had been quarantined in Fiji, but Samoa was under New Zealand administration at the time, and the New Zealand administrator, Lieutenant-Colonel Robert Logan, allowed the ship to dock. Passengers known to be sick with the flu, which was at the time ravaging New Zealand, disembarked. As in New Zealand, the virus spread quickly, killing about 8500 people – about a quarter of Samoa’s small population at the time.
According to the New Zealand Government’s history website, a 1947 United Nations report described the Samoan episode as “one of the most disastrous epidemics recorded anywhere in the world during the present century, so far as the proportion of deaths to the population is concerned”.
“Samoa, I think, has never really forgiven New Zealand for that,” University of Auckland professor of history Linda Bryder says. “It did contribute to the resistance movement against New Zealand administration in Samoa.” Samoa gained independence from New Zealand on January 1, 1962.
Last year, Samoa was badly hit by a measles epidemic, which claimed 83 lives,
mostly children.
This month, in the wake of the first Covid-19 case being confirmed in Auckland, the Samoan Government announced new restrictions on people arriving in Samoa. The total number of weekly commercial flights has been cut, and passengers are required to show a medical certificate issued within three days prior to their arrival in the capital, Apia.
“Due to New Zealand’s close proximity to Samoa and its confirmation of its Covid-19 case in Auckland, the increased risk of Covid-19 entering Samoa has elevated from high to very high and its impact on Samoa’s population remains [potentially] catastrophic,” a travel advisory issued by the Samoan Government and effective from March 2, states. The medical clearance must be shown before boarding passes are issued in countries, including New Zealand, where flights to Apia originate.
“Drought and coronavirus are going to deal the New Zealand economy a sharp blow over the first half of 2020,” Westpac economists warned in their weekly update at the beginning of March.
“There is now a greater probability of supply-chain disruptions causing New Zealand firms to run out of the materials they need to operate,” Westpac noted, adding that its updated forecasts incorporated assumptions of more travel bans and disruption to economic activity. “We are still assuming that efforts to contain the virus will eventually be successful, but only at a severe economic cost.”
All the major banks match Westpac’s concern. “The outbreak of the Covid-19 coronavirus [disease] has turned what was looking to be a strong economic outlook for 2020 on its head,” reports ASB Bank senior economist Mark Smith. “The situation remains volatile and it is difficult to see how things will pan out.
“We tend to be overly cautious around new and misunderstood risks, which is what this virus is,” Smith says. “Panic does no one any good. However, the situation is evolving quickly. It is prudent for firms, households and policymakers to be prepared. This means having a plan B or even a plan C ready if need be.”
POTENTIAL JOB LOSSES
One of the first to warn of possible job losses was Victoria University, where travel restrictions have prevented about 500 students from China enrolling, angering the vice-chancellor who says the New Zealand Government has overreacted. The university has put in place a hiring freeze and says layoffs are possible.
A director of New Zealand investment and advisory group Jarden, John Norling, says “second round effects” of the Chinese shutdowns are what’s worrying for New Zealanders, aside from the virus itself.
“The risk is that people get laid off, those companies can’t pay their bills and the
“Samoa, I think, has never really forgiven New Zealand for that. ”
“It is prudent for firms, households and policymakers to be prepared. This means having a plan B or even a plan C ready if need be.”
whole thing feeds on itself. That’s where the real concern is – in the flow-on effects and creation of a feedback loop.”
An interest rate cut now looks likely, but Norling says that is a blunt instrument and it would also affect confidence. “I’d have thought specific policies were required for the industries affected, like tourism, forestry, and universities. You could take a laissezfaire view, but when universities are saying they’ll have a hiring freeze and then could let people go, those things impact how everybody feels, and the affected people cut their own spending.”
In the US, Norling says, a rise in unemployment of about 0.3% indicates a recession is coming. “If you’re going to avoid a recession, the Government has to do something.”
Prime Minister Jacinda Ardern says the Government is not expecting the worst to happen but is planning for it just in case.
Some businesses are already requesting support on such issues as cash flow, “and even the ability to pay taxes”. The Cabinet has set aside an additional $4 million for the Regional Business Partners programme, which will pay for additional local advisers “on specific issues, whether it’s payroll issues, whether it’s directly supporting them, liaising with IRD around provisional taxation or GST, or employment services”.
In addition, the Government is promising 16 “ready response teams” that would help people who lose their jobs find new ones. “We are, for instance, as we speak, working actively on a wilding pine project as an option for those who currently work in the forestry industry,” Ardern said at her weekly post-Cabinet press conference.
As for individuals, Norling says a sharp market drop like we have just seen tests people’s risk appetite. For the oldest New Zealanders, he thinks, the main concern will simply be not getting the flu or Covid-19, because old people and those whose health is already compromised are at greater risk. “It’s a straight-out health issue.”