Need to calibrate COVID-19 policy responses
Public health and governance experts explain how preventive steps to keep infection from escalating could produce economic crisis that could exacerbate hunger and health concerns.
In an analysis of current strategies in addressing the COVID-19 crisis, Dr. Manuel Dayrit, former health secretary, and Dr. Ronald Mendoza, Ateneo dean of governance, recommend the urgent need to calibrate policy responses in both health and economic issues. In their paper, “COVID-19 – Countering the Economic Contagion,” they argue that the economic packages will have to be designed and targeted in a calibrated manner since health policies like travel bans, quarantines, and lockdowns could blunt the economic effect of normal fiscal stimulus. Uncalibrated policy responses, they say, could cause further damage if industries slow down and tens of thousands of small firms are scuppered or thwarted from operating, as this could destroy income streams for millions of workers. They continue: “Government and private sector closures, travel bans, and city-wide quarantines could help to ease the spread of the disease, but if implemented callously, could also trigger food supply disruptions, economic dislocations, and heightened uncertainty and panic.”
The authors express deep concern about the government’s emergency bill that would allow government to reallocate budgetary resources and take over private enterprises as part of a counter-COVID-19 effort. This includes hospitals, hotels, and telecommunication facilities. According to them, these “draconian measures” could unwittingly exacerbate the economic contagion unless policy responses are more balanced.
As many now recognize, their assessment on these health-minded community quarantines and travel bans have indeed resulted in considerable disruption in areas like food supply chains, and caused obstacles as well to health workers. They estimate that some 45 million members of our labor force are less likely to have formal work arrangements, and therefore less access to social protection and insurance. An increase in unemployment would lead to increased poverty and hunger as well as health concerns.
To address this concern, government, notably, local government, have set up food lanes, exemptions on travel bans, and cash transfers.
The government has a P27.1-billion stimulus package, to which business groups have countered by asking for a counter COVID-19 response over ten times larger.
On the part of the private sector, Cebu Pacific, JG Summit, Jollibee, Ayala Corporation, and the MVP Group are reported to be doing their part by helping protect their workers and partner businesses by cutting senior managers’ pay instead of laying off workers as well as preparing relief packages for their worst hit employees.
COVID-19 has produced two waves of contagion, the authors note. One is a disease-based contagion that can swamp domestic healthcare and social protection as well as cripple workers and factories through adverse health outcomes. The second type refers to the chilling effect on both the economic demand and supply sides.
The authors end with the hope that government agencies should be given leeway to recalibrate policy responses based on evidence and guided by goals of protecting both health outcomes as the broader economy and millions who depend on it. Otherwise, they say, the “cure may prove worse than the disease.”