The unforeseen challenges caused by Covid-19 have not left any country in the world unaffected. There are a total of 203 countries and territories affected by the virus, not just from its spread but also economically. At a global level, the pandemic has bought the economy to an abrupt halt, disrupting the global supply chain and international trade. According to the United Nations, the global economy could shrink up to 1per cent in 2020 due to the pandemic. A warning has been given that it can contract further if restrictions on economic activities are extended without adequate fiscal responses.
Respective governments have taken different measures to control the outbreak and reduce its economic impact on their countries. While many countries are still struggling to contain the virus despite having enacted strict rules, other countries have successfully flattened the transmission curve and are on their way to economic recovery. So what did these countries do differently?
Sharing examples of a few such countries that have been successful in fighting Covid-19:
- New Zealand – On 8th June, the country declared that there were no active Corona cases in the country. Statistics suggest, New Zealand had 1500 infected people, and out of which 22 died. New Zealand is now Corona free. This could only happen because of the imposition of one of the strictest lockdowns in the world, which was swift, its rules were communicated effectively, and intensive testing was done. As a result, curbs on public events, weddings, functions etc. are being gradually lifted. Shopping malls, markets, hotels, restaurants, and public transport are fully functioning, and the economy is already on its path to recovery. The government also announced a fiscal stimulus worth more than 20% of gross domestic product, predicting this sum will jump-start growth and get the jobless rate back to its pre-virus level of 4.2% within two years. The government and the central bank are forecasting a rapid recovery, with annualized growth resuming in mid-2021
- South Korea experienced one of the world’s most significant initial outbreaks of Covid-19 but successfully brought down the rate of COVID-19 transmission without even imposing a nationwide lockdown. With wide-scale testing and contact tracing, the country has been able to tackle the virus effectively. It used credit cards, phone data of infected people, to identify their movements and duly informed citizens to avoid taking routes infected people had taken. Monitoring isolations via a web application etc. With the elimination of almost 90% of cases in South Korea, the country eased its social distancing norms and started to open schools, colleges and universities. Businesses also gradually started reopening, bringing the economy back to normal. The crisis has seen South Korean exports plunge steeply. Still, as per the latest preliminary first-quarter numbers reported by The Bank of Korea, South Korea’s GDP grew 1.3% year-on-year indicating the country’s efforts to boost its economy have been successful.
- Japan came from near disaster to become a success story. This only happened because of its widely praised regime of testing, tracing and treating, which made the curve flat quickly. The government on 25th May lifted the state of emergency declared due to COVID-19 because the number of new infections decreased to mere dozens per day. Parts of Japan have exited lockdown. Still, the country’s major urban areas remain under lockdown because they are densely populated and reliant on public transportation whose use can lead to a surge in cases. Japan’s economy is at the cusp of recession after two consecutive quarters of negative economic growth. Still, it is expected to rebound by the 3rd quarter.
- Australia’s response to the COVID-19 has been hugely successful compared to the rest of the world. The country closed its borders to all foreign visitors promptly. The government announced on 22nd March that all bars, cinemas, gyms clubs and places of worship would remain close till further notice, while cafes and restaurants would be restricted to take-away only and supermarkets, clothing shops, chemists and beauty salons would remain open. While these restrictions and social distancing rules were put in place in every country, Australia expanded its widespread testing. The country’s success in curbing Covid-19 infections is allowing it to ease some restrictions even as it remains mostly closed off from the rest of the world. Agriculture and mining continue to support exports, and the government is looking at ways to revive the country’s manufacturing sector. As per OECD’s latest forecast, Australia is leading the developed world out of the pandemic infused recession, by providing a continuous stimulus that boosts incomes and reduces unemployment.
Proper planning, readiness, and timely and aggressive implementation of measures by governments were the key to controlling the spread of the virus in these countries. As a result, these nations and are now focussed on rebuilding their economies.
On the other hand, the global death toll has crossed the four lakh-mark. As of 7th June, many countries remain unable to control the spread of the virus due to delays in imposing restrictions, large populations, stipulating too few restrictions, slow scale testing, less stringent lockdown rules, ineffective government planning etc. Some examples of these nations are shared below:
- United States– Having watched Asian and European countries struggle against Covid-19, the US was slow to ramp up testing and order its residents to stay at home. Also, as power is not centralized in the US, a national lockdown was not easy to implement. Having downplayed the threat of the virus at its initial stage, today, the US has the highest number of Covid-19 cases in the world. The US economy had already entered a recession in February, well before the pandemic had any effect. Now the US economy is in worse shape with retail sales dropping by 8.7% and over 22 million employees, more than ever in the country’s history, filing for jobless benefits.
- Brazil– The Brazilian government’s chaotic response to the virus has put the country in a difficult spot. With the country recording more than 8 lakh positive cases, it is becoming difficult day by day for Brazil to distribute test kits because of the large size of the country. Health administration and infrastructure are also not very robust in the country. A failure to act early and aggressively, ongoing political turmoil, along with abysmal enforcement of restriction measures have contributed significantly to making Brazil an emerging centre of the pandemic. Because of these factors, Latin America’s largest economy is plunging into its steepest recession in history. The economic fallout has impacted consumer goods and service industries. The consumption of products and services has dropped drastically in Brazil.
- Russia- The Russian government made early efforts to stem the outbreak by shutting the country’s borders and assigning a special task force to combat the pandemic. But recently, it saw a spike in cases, with hospitals overflowing and doctors complaining about lack of protective gear. This can be primarily attributed to mismanagement and improper communication about the number of citizens affected by the virus. As a result, this year, the hotel and public catering industries are suffering their most significant decline in value. Also, the clothing, leather, and footwear manufacturing sectors are expected to shrink at a colossal rate.
- Spain- The main reason for the quick spread of the pandemic in Spain is very mundane. In late February and early March, with temperatures above 20C, the cafes and bars were filled to the brim with happy people, doing what they like best – being sociable. The government’s decision to impose lockdowns came very late. On 8th March, just a week before the country was locked down, sports events, political parties, conferences and massive demonstrations to mark International Women’s Day took place. Thousands of fans few down together for Champions Leagues Matches just before the lockdown was imposed. The country lacked essential equipment like ventilators and protective gear for doctors. In Spain, Coronavirus testing equipment is still being sourced from other countries. Sectors like travel, tourism, aviation, hospitality are in a vulnerable position and direly need urgent relief. Restaurants, sporting events, and many other services have been considerably disrupted.
These examples indicate that the countries, which understood the gravity of the situation and took proactive measures, have been successful in reducing if not halting the spread of the virus. It was preparedness and the timely realization that the virus posed a severe threat which let these countries beat the virus and gave them the additional time and resources to create economic stability. Adequate testing, tracing, robust health care supported by appropriate economic guidance by governments have been vital to these countries sailing through COVID-19. Whereas countries, which made light of the virus, and let it spread before pressing into action, are not only beaten by the virus but also have economies that are bleeding. In these countries, even though the virus is not under control, governments have no choice but to end restrictions to revive the economy.