NEW REPORT: MORE MISSED COVID-19 OPPORTUNITIES

According to my new report, the past quarter has seen more corona virus disease 2019( C ovid -19) opportunities missed worldwide with massive collateral human costs and economic damage. How has the Philippines fared in global comparison?

MY first Covid-19 report (April 2020) showed that the pandemic was largely because of past containment failures and failed crisis management in Western Europe and the United States.

The new report “The Tragedy of More Missed Opportunities” (click here) shows how even more opportunities have been missed in the past quarter, as a result of the old debacles

and premature exits, continued policy mistakes and the consequent collateral human costs and economic damage in the world’s largest economies.

At the current rate, the accumulated confirmed cases could exceed 25 million by September. In the absence of deceleration, these cases could soar to 50 million to 60 million and deaths to 1.5 million to 1.7 million by the year-end.

At the moment, the worst regional crisis is in the Americas. Consider this: if US states were sovereign entities, then by August — as adjusted to the size of population — US states accounted for a whopping 23 of the 25 most virus-affected major economies worldwide, with Louisiana, New York, Florida, New Jersey and Mississippi followed by Chile.

Even the populous Brazil, which had the greatest number of confirmed cases after America, fell behind US states such as Iowa and Connecticut with population of 3 million to 4 million.

In the Americas, US containment failures, poor crisis management and premature exits, coupled with poorer economies and weaker health systems in Latin America have resulted in the worst regional crisis worldwide. Yet, Canada’s track record relative to the US suggests that precautions can work, despite risks in the region.

2 phases of Covid-19 progression, virulent strains

In late January, US President Donald Trump thanked Chinese President Xi Jinping for the success in containing the outbreak in China. But as US response proved belated and ineffective and the Trump’s reelection campaign

got into trouble, the administration has blamed China for the pandemic.

In my report, I assessed the progressive course of Covid-19 in all income group economies worldwide in terms of the timing of the official first cases, accelerated spread, effective reproductive number (Rt) in three time periods, transmission classification, flattening of the curve, new accelerations and potential susceptibility to new waves.

Here’s what I discovered: while the original virus was first officially recorded in China, it was largely contained in the mainland and the regional neighborhood in January to February. Whereas in the second phase, the pandemic spread has been fueled by importations from Europe, containment failures in the US and advanced economies, which fostered early but initially undetected local transmissions.

In particular, premature exits and continued policy failures resulted in multiple virus accelerations in the summer and are likely to compound susceptibility to new accelerations and secondary waves.

Worse, the two phases of the Covid-19 progression may have been amplified by a recently discovered

mutation. In China and Asia, the virus was initially dominated by the original “D” variation. But in March, a new “G” variation seems to have evolved in Europe and the US predominating infections elsewhere in late spring.

If this discovery is valid, the implications could prove unsettling and complicate effective vaccination. Emerging and developing economies may soon face more virulent virus strains that lockdowns and travel restrictions have so far kept in check.

To flatten or fatten the curve — that’s the question

Relying on aggregate data, the Philippines has been declared the new Covid-19 epicenter in Southeast Asia. That is simplistic because populous countries have more cases and pandemic effects differ vis-à-vis the level of economic development.

If the pandemic impact is adjusted to population (total cases per 1 million), Singapore is the superior leader of Southeast Asia, with over 9,300 cases. It is followed by the Philippines (almost 1,100 cases); Indonesia, Brunei and Malaysia;

as well as Thailand, Cambodia, Vietnam, Myanmar and Laos.

However, much depends on (population-adjusted) testing. The more countries test, the more the likely cases and vice versa. Among the high-income and upper middle-income economies, tiny Singapore is also the leader ( over 250,000), followed by Brunei (94,000) and Malaysia (30,600).

Among the lower middle- income economies, the Philippines ( 15,200- plus) has tested more than the rest, even the upper middle-income Thailand (10,700) followed by Indonesia, Vietnam, Cambodia and Laos, and Myanmar (2,000 to 6,000). In relative terms, even Japan’s testing remains only half of that of the Philippines.

In high- income economies, most countries began to flatten the curve toward late spring (in South Korea even earlier). In contrast, the curve has been fattened in the US, whereas in Japan limited testing has distorted the likely true spread.

In the high-income and upper middle-income economies, the pandemic surged in the course of the first quarter, whereas in the lower middle-income economies it has intensified since the second quarter ( seeupdatedfigure).

Until recently, cases continued to accelerate alarmingly in the Philippines, partly due to elevated community transmissions and partly due to testing. But with the return of

the modified enhanced community quarantine, improvement may be taking place. However, it is too early to project a trend and whether it will prove sustained and positivity rate (the percentage of people who test positive for the virus of those overall who have been tested) remains high.

The lost years ahead

As projected by my original report in April, the plunge of the first quarter data was just a prelude to the second-quarter carnage in most major economies. As also projected then, the baseline scenarios in most countries have been downgraded. The new report suggests that more of the same looms ahead.

Even the current baseline — as proxied by the World Economic Outlook of June 2020 by the International Monetary Fund — remains too optimistic. It downplays the

impact of the prior grim global economic landscape. It underestimates the adverse impact of the secondary virus waves. And it largely suspends the negative impact of the escalating US Cold War against China and several other countries.

If the economic situation is historically bad today, it may worsen in the coming months. As measured by declines in expected increases of per capita incomes — a rough shorthand for living standards — the impact has already been devastating in most economies and worst in those also coping with pre-pandemic challenges.

Among high- income economies, several countries may face four to seven years of lost progress, whereas in outliers prior challenges are contributing to greater declines (e.g., Italy and Japan).

Among lower middle-income economies, even the best performers could lose two to four years (India, Kenya, the Philippines and Vietnam), while others may lose a decade (Nigeria).

Because of low testing and undervalued Covid-19 case counts, devastation in poor low-income economies could prove significantly worse than currently acknowledged.

Huge costs of failed multilateralism

The global pandemic highlights the excessive costs of failed multilateralism. The World Health Organization’s updated fund-raising target remains only 0.01 percent of the world’s current cumulative output loss.

Strong multilateral global action would be vastly preferable to ( and only a fraction of the cost of) unipolar actions, which compound pandemic damage.

With the Spanish flu, it was not the first wave that proved fatal, but the second. If such painful lessons have not been learned by now, they will be learned over a major crisis, due to protracted pandemic and a multi-year global depression.