U-curve

This dreadful virus is fighting back.

Experts have noted the virus that causes COVID-19 slightly evolved to improve its infectiousness. If this is true, humanity’s fight against the pandemic will likely take longer than anyone thought.

The longer it takes us to quash this pandemic, the more difficult the economic recovery will take. No one is speaking about a V-shaped rebound anymore – except perhaps for Donald Trump in his alternative universe. Every responsible leader now calls on their people to prepare for a long and difficult recovery.

The standing estimate is that the global economy will shrink by 5.3 percent this year. It could be worse, as the pandemic begins spreading to new regions of the world.

Brazil has climbed to second place in the world in terms of the number of cases and number of deaths. It is now second only to the US as a pandemic hotspot. Its president Jair Bolsonaro is a Trump wannabe. He called COVID-19 “a little flu,” fought his health establishment’s efforts to impose restrictions on movement and prescribed a questionable anti-malarial drug as therapy. As a result, Brazil has now become a cauldron for infections.

Meanwhile, in the US, COVID-19 cases are rising in 23 states – most of them in the Republican heartland that opened up too early.  The Trump administration is pretending the pandemic is on the wane. A large indoor rally for Donald Trump is planned for today in Tulsa, Oklahoma even as cases are rising in that city.

The man chooses to taunt a deadly virus. More people will die because of this.

International agencies are straining under the weight of this pandemic. Several UN agencies are reporting they need more money to deliver critical medical supplies to the poorer countries. No one knows where that money will come from. The Trump administration recently cut its funding to the WHO at this most difficult time.

We are not spared the painful economic consequences wrought by this pandemic.

As we await the official second quarter economic figures, the indications are that it will be worse than we cared to predict. Our statistical authorities have put the May unemployment rate at 17.7 percent. The latest SWS survey shows 83 percent of Filipinos now feel life has been worse. Abroad, migrant Filipino workers who lost their jobs and could not return home are scrounging trash dumps to survive.

We will bounce back, of course, notwithstanding that a deep global recession will weigh us down. But it is not going to be a quick V-shaped recovery. It will be a U-shaped curve. In all likelihood a wide U-shaped curve. As a rising tide raises all ships, an ebbing tide will pull everyone down.

It will take us years to claw our way back to where we were before the pandemic struck. Some estimate it will take us 10 years to get back to the glowing February 2020 numbers.

In the first quarter, industry revenues contracted by 4.9 percent. The contraction will be sharper in the second quarter. Because of longer gestation, our industry sector will require time to get back to robust earnings.

While some might disagree with the online gambling operations we host, they are the quickest to recover and deliver the revenues government so badly needs. The tourism sector was hit badly by the pandemic but it should be among the quickest to recover when travel reopens.

We might have to wait until 2030 just to get back to where we were in terms of low unemployment and low poverty levels and high rates of economic expansion.

This brings to mind the two decades of austerity we needed to bring down our debt service levels. During that period of austerity, we did not put in the necessary investments in modernizing our infra. Health and education services deteriorated.

We were just preparing for high growth led by infra investments when the virus struck. We were expecting to grow our economy by 7 percent this year and perhaps bring down poverty incidence to near single-digit levels. That is the tragedy of it all.

Right now, we have not figured out a way to continue the educational process for our young. All this talk of “blended” education is much more aspirational than practical. The fact is we will not be able to deliver much structured education in two months. There is no broadband available, not enough internet penetration, no teaching kits ready and no laptops for our kids to use.

Interrupted educational formation will cause long-term damage to young Filipinos. Against all odds, we must try and minimize the disruption.

There are, to be sure, ten thousand things government must do to help the country cope with the health emergency. Getting the educational system to begin grinding again should be at the top of that list. Our future as a competitive economy depends on getting the educational system to work at the soonest possible time.

Community quarantines, in their various gradations, will likely continue for some time. Those leading the fight on the health front are not showing the grit and determination we see in those countries such as South Korea, Vietnam and Taiwan.

This late in the anti-COVID-19 fight, we still need to recruit about 85,000 contact tracers. Unless we are able to contact-trace effectively, no amount of testing will arrest the spread of infections. Our testing infrastructure continues to sputter.

We are not getting the best demographic information from the DOH. Let us get some social scientists reinforcing the doctors who seem so bad at managing statistics.