Contributing Writers: Azad Ali, Tangerine Clarke,
George Alleyne, Nelson King,
Vinette K. Pryce, Bert Wilkinson
GENERAL INFORMATION (718) 260-2500
Caribbean L 10 ife, March 20-26, 2020
By Vladimir Popov & Jomo
Kwame Sundaram
BERLIN and KUALA
LUMPUR, March 19, 2020
(IPS) – It is now clear that
most East Asian government
responses to novel coronavirus
or Covid-19 outbreaks
have been effective. In Hong
Kong, Japan, Singapore and
Taiwan, the number infected
have remained relatively low
despite their proximity and
vulnerability, while containment
in China and South
Korea has been impressive.
Some other countries hit
by the Covid-19 pandemic
are trying to replicate East
Asian policy responses, not
only in public health, but
also in handling economic
contraction. More than two
decades after the 1997-1998
Asian financial crises, some
media are praising East Asia
again.Structural recession?
The contraction is largely
due to the government
lockdowns to ensure ‘social
distancing’ to check the
spread of the virus. Mainstream
economists call this
a structural or supply side
recession, to be overcome
by expansionary fiscal and
monetary policy, predicted
to trigger higher inflation.
Less work has reduced
incomes and hence demand.
To make matters worse, share
price collapses have also
reduced wealth income. The
crisis also offers an opportunity
to reallocate resources,
among industries and services,
or even spatially, from
one region to another.
While the pandemic has
hit some activities far more
than others, e.g., travel,
tourism, retail, events, restaurants,
entertainment,
schools, universities, etc.,
the crisis offers an opportunity
to shift resources to
activities of the future, e.g.,
renewable energy and care
work, besides the urgent need
to cope with public health
emergencies and order.
But a quicker and more
efficient solution is elimination
of supply constraints by
expediting or even mandatorily
reallocating labor and
finance. One analogy is the
transition from manufacturing
gramophone records
to producing tape-recorders,
CDs, DVDs, i-pods, and
smart phones with better
techniques. Another is the
conversion of energy intensive
industries into much
more energy efficient operations.
Such structural changes
are happening all the time,
and should not cause recessions
if gradual and small
scale. But sudden, large
scale structural shifts may
be more disruptive as time
and effort are needed to reallocate
resources. Thus, output
drops in declining industries
are not immediately
compensated by production
increases in the emerging
new industries.
In a market economy,
adjustments typically
increase unemployment:
industries that become less
profitable, due to higher
costs, may lay off workers;
growing unemployment lowers
wages, and it may take a
while before the lower labour
costs make it worthwhile to
raise production in other
industries.Without government
assistance to retrain
laid off workers and encourage
new investments, adjustment
will be more painful,
lengthy and costly. The
recessions in Western countries
following the oil price
rises in 1973, 1979 and 2007
were due to poorly managed
‘structural shifts’.
Transformational recessions
in post-communist
economies in the 1990s also
exemplify poor management
of such structural shifts.
In many countries, output
reductions during such transitions
were greater than in
the US Great Depression of
the 1930s.
Coping with
recession
Managing structural shifts
was generally more successful
in East Asia as costs and
benefits were generally better
shared and governments
have been less reluctant to
intervene in markets and
direct investment finance
accordingly.
In China, production of
protective masks increased
from 15 million daily in early
February to over 100 million
every day by the end
of month! Over 3000 enterprises
that previously had
nothing to do with health
products started producing
masks, special protective
suits, sanitizers and hygiene
goods.
The South Korean company
Seegene developed a
Covid-19 test kit in three
weeks and started mass production
with its 395 employ-
By Vladimir Smakhtin
HAMILTON, Canada, March
19, 2020 (IPS) – As the COVID-
19 coronavirus pandemic
spreads, guidance on how wash
your hands and other measures
intensifies.
These recommendations are
important, but they are hardly
of value to the 40% of humanity
lacking access to even the most
basic hand washing requirements
— soap and water 1.
In most African countries or
India, the proportion is even
higher – between 50% and 80%
of the population.
Even many health centres
lack facilities for hand hygiene
and safe segregation and disposal
of health care waste 2.
In the Least Developed
Countries (LDCs), basic water
services are absent in 55% of
health centers, used by an estimated
900 million people —
more than the population of
the USA and Europe combined.
More than 1 million deaths
each year – newborns and
mothers – are associated with
unclean births. Overall, poor
sanitation and a lack of safe
drinking water take the lives of
an estimated 4.3 million people
annually 3.
This ongoing health crisis —
a “water illness pandemic” in
all but official definition — has
been around for generations
but, unlike COVID-19, hardly
makes a ripple in international
news.
It is unfair to say nothing has
been done about it, but progress
is so slow 4 5 that many members
of vulnerable groups are
likely to continue dying without
ever having known what it
means to have clean water within
a five minute walk, much less
a home tap.
Since the year 2000, this hidden
water pandemic has quietly
killed more people than World
War II 6.
And it is on pace to kill over
40 million more — roughly
equal to the population of Canada
— in the next 10 years,
by which time the Sustainable
Development Goals (SDGs) of
the UN’s Agenda 2030 are supposed
to have been met.
Those 17 goals include one
that aims to “ensure availability
and sustainable management of
water and sanitation for all.”
During the Severe Acute Respiratory
Syndrome (SARS) crisis
of 2002-2003, nearly 8,100
people were infected and nearly
800 died. COVID-19 is much less
deadly but has already infected
25 times as many people. So,
human losses are now over 10
times more than those due to
SARS and they keep growing.
Be that as it may, even as
COVID-19 takes more lives in
the remainder of 2020 despite
all efforts of health care providers,
and all the measures
already taken by governments
around the world, the toll will
OP-EDS
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Continued on Page 11
Continued on Page 11
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State intervention
necessary to overcome
Covid-19 threats
Coronavirus & Water
Pandemics: Doing
the math
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