Epidemic preparedness is now a must

More than a month has lapsed since the first cases of COVID-19, or the novel coronavirus, emerged in Wuhan, China, and while there are now reports that the health crisis is being better managed in China, the extent of disruption to the world economy is still very much debatable.

Fortunately, countries — even those that the World Health Organization (WHO) has not included in its affected list — are taking the necessary health precautions to protect themselves by either preventing the entry of people infected by the virus or controlling its spread.

How the virus in China is affecting its economy has been given so much attention of late for the simple reason that the country is a major supply link in global manufacturing and trade. For this reason, how China has been coping to get back to normal is worth studying.

For all the flak that the Chinese government is getting at both its national and local levels, WHO had recently commended the country for quickly dealing with the problem. What country can complete a hospital for the virus patients in 10 days?

Some economists now say that COVID-19 has triggered a more exaggerated reaction compared to other past epidemic outbreaks like the Ebola in West Africa, which had resulted in as many as 11,000 fatalities during its spread from 2014 to 2016.

Of course, it is still too early to predict how far the virus will spread, with the reported positive cases in the mainland already at 70,000 and deaths at over 1,600 as of this writing. Yet, the extent of the government-imposed lockdown on a major city like Wuhan with 11 million residents is something for the books.

Emerging lessons

While the Chinese government is focused on containing the spread of the deadly virus, the latest news is about how the country is trying to get back to normal. Schools are resuming classes online in areas where possible, and there’s even talk about courts holding trials via the internet.

Wuhan’s health department has also issued guidelines for companies confident of resuming operations without compromising the health of their employees. Plans to help small retailing businesses badly affected by forced closures during the height of the epidemic are afoot.

Essential supply chains are selectively being run in urban and rural communities to keep the flow of food and other basic commodities moving, while tight mobility measures continue to be imposed to minimize the spread of the virus.

How China will macro-manage the impact of COVID-19 on its economy will largely be patterned after its responses in 2003 when the SARS outbreak lowered China’s second quarter GDP growth by a fifth, but which by yearend was almost negated by a drop of less than 0.5 percentage points.

The next two weeks will be critical for China. A worst-case scenario will lower GDP growth during the first quarter by two to three percentage points compared to the first quarter of 2019 should containment measures be effective.

Barring any other external shocks, economists see a resurgence in the Chinese economy that will allow growth to bounce back in the second quarter, bringing full year growth to within reasonable levels of the original projection of six percent.

Understanding epidemics

In recent years, the emergence of deadly viruses that threaten human lives in pandemic proportions tells us that we have to come up with disaster preparedness plans, much like we do for natural calamities like typhoons and earthquakes.

We could count ourselves lucky that our health authorities were able to impose appropriate measures that, so far, have managed to keep the number of confirmed cases to three, with only one fatality and the other two having since recovered.

The latest data of this writing had less than 500 cases monitored by the Department of Health, with majority reportedly already discharged from hospital care. Continued vigilance by concerned government agencies should result in our countrymen being spared from this contagion.

How China is coping to bring back the health of its country is a worthwhile study for our public and private health network, but more importantly we must learn to understand the sources of risks that have spawned such deadly epidemics like SARS, MERS, Zika and Ebola to prevent their emergence in our country.

Economic impact

On the economic side, the COVID-19 effects are seen primarily on our tourism, travel, manufacturing, and retailing sectors, although many of the Chinese funding promised for flagship Build Build Build projects may experience delays too.

Hardest hit during the next six months would be inbound tourism as travel plans are cancelled and postponed because of the uncertainties posed by the coronavirus outbreak.

Of the 20 or so countries that have reported and confirmed COVID-19 cases, 10 including the Philippines are in Asia. Given the fact that the Chinese are now the second largest nationality that visit our shores, the travel ban imposed by China on its citizens is a huge blow to our tourism figures.

The Department of Tourism has already released its estimated losses until April this year at P42.9 billion from cancelled flights and bookings, as well as tourism-related spending. Travel agencies, airline carriers, and tourist destination sites and accommodations will likely incur losses.

For manufacturing centers, disruptions in production are to be expected until the second quarter of the year with the supply of Chinese manufactured goods temporarily cut off with the widespread work suspension happening in many parts of China now.

It’s sad how COVID-19 has taken so much from all our hard work.

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