Lessons from the past for a novel crisis
There is an adage that says you should fight a war with the army you have, not the army you wish you had. This came to mind in the past few days when US President Donald Trump declared that the coronavirus pandemic was his war, and he was the wartime president.
That was before he mischaracterised the crisis at hand — which he had underplayed for weeks — as an economic challenge, not a health crisis, since, according to him, the US has the world’s best health-care system.
Lest we forget, Trump has undone most of Barack Obama’s efforts in the healthcare space, including legislation such as the emblematic Obamacare (formally known as the Affordable Care Act), which significantly expanded access to affordable health care for the most vulnerable Americans, such as students, people with pre-existing conditions and small business owners battling to insure their workers.
This past Monday, marking the 10th anniversary of Obamacare, Obama stopped just short of telling his successor that by undoing his legacy he had exposed millions of Americans to Covid-19.
Trump’s instincts — for this is what he relies on, rather than science and persuasion by facts — aren’t always wrong. But by emphasising the economic emergency over the public health one, he mischaracterises the crisis the world faces.
Covid-19 is not only a health emergency, it is a challenge to all of humanity.
Reading is clearly not Trump’s favoured method of processing complex information, so it would be up to his aides to peruse an excellent McKinsey paper, “Safeguarding our lives and our livelihoods: the imperative of our time”.
In fact, every leader should read it. The authors write: “This is not about GDP or the economy: it is about our lives and livelihoods. We see enormous energy invested in suppressing the virus, while many urge even faster and more rigorous measures.
“We also see enormous energy go into stabilising the economy through public policy responses. However, to avoid permanent damage to our livelihoods we need to find ways to ‘timebox’ this event: we must think about how to suppress the virus and shorten the duration of the economic shock. And we must do both now!” The operative phrase is the last phrase, “Do both now”. This is not an either-or situation.
In an ideal world, the best qualified and most experienced crisis managers — political leaders, finance ministers and central bankers backed by top medical scientists — would be called upon to save the world’s lives and livelihoods.
But the international community has not dealt with anything approximating the scale of Covid-19 since World War 2. In recent memory, only the global financial crisis has challenged leaders to step in to save livelihoods with nearly the same urgency. And unlike Covid-19, the financial crisis was a single-dimension challenge.
On Monday night, President Cyril Ramaphosa stepped up to face the biggest test of his presidency yet. Up until last week, the Covid-19 crisis had been dealt with as a health emergency and, to his credit, health minister Zwelini Mkhize had demonstrated commendable leadership.
But from Thursday at midnight, when the country moves into lockdown, the number of lives that will be saved will be a function of whether South Africans embrace the measures and, critically, whether the private health-care industry comes to the party to support the frail public health-care system.
It would be churlish to not commend Ramaphosa for cobbling together the economic support measures to save livelihoods that he has managed to assemble, given the time pressures. His inclusive approach has to be applauded.
Similarly worthy of support are the actions of progressive big businesses, the banks and the Rupert and Oppenheimer families.
But as with the past week’s disaster management measures, good intentions do not necessarily translate into positive outcomes. Here Ramaphosa has something to learn from the ineffectual response of the SA government to the 2008/2009 financial crisis. An obsession with process rather than substance blunted the public policy response.
A case in point was the embarrassingly long time it took to set up the job-saving fund. Lack of co-ordination between players such as the SA Reserve Bank and fiscal authorities caused SA’s economic recovery to take longer than peer economies that acted decisively and in a co-ordinated fashion.
The focus now should be on ensuring that the money earmarked for saving livelihoods reaches the intended recipients as quickly as possible. The most effective and efficient way is to simplify and standardise processes of accessing funds, especially from the public sector.
The successful 2008/2009 financial crisis managers have another lesson for today’s managers: as well as speed, quantum and co-ordination of their economic stimulus actions, there was a spirit of global solidarity that the world was in the crisis together.
In dealing with the coronavirus fallout, today’s leaders cannot withdraw from the world. They must collaborate and share expertise to save lives and livelihoods. For instance, demonising China, as Trump has done, is myopic. SA should seek help from countries such as China, South Korea and Japan that have been successful in combating Covid-19.
TODAY’S LEADERS CANNOT WITHDRAW FROM THE WORLD. THEY MUST COLLABORATE AND SHARE EXPERTISE TO SAVE LIVES
Dludlu, a former Sowetan editor, is executive for strategy and public affairs at the Small Business Institute.