Exiting the corona lockdown

This post is a continuation of the earlier posts here and here and a summary of what has become clear and pointer towards what can be done in the days ahead.

Let me start with what Manu Joseph has to write. 

In my view, this is how the fear of covid-19 spread: China discovered the disease and did something very Chinese. It shut down a large portion of the nation because it also had control over switching on what it had switched off. American tech billionaires came next. Many of these billionaires have two qualities that are good conductors of fear—they seem more afraid of death than others, and they appear to constantly anticipate their own destruction in the rise of sentient machines or diseases. Also, they have deep respect for China, which manufactures their goods. Some of them, especially those who did not make physical goods, called for the US to imitate China and lock itself down. They transmitted their panic to a few influential journalists who were wondering what their own opinions were on the matter when leaders such as US President Donald Trump and British Prime Minister Boris Johnson expressed contempt for the idea of a lockdown. This set in motion a powerful Western humanitarian reaction in favour of a lockdown.

It could not have been said better.

So, the summary.

1. Whatever the reasons, and there are many being suggested, it is amply clear that there is a differential trajectory, atleast with respect to deaths between northern temperate countries and tropical and other southern developing countries.

As one more anecdotal illustration, consider the slums of Dharavi and Khayelitsha in India and South Africa. Surprisingly, they have so far suffered 808 cases (21 deaths) and 441 (20) respectively. Given that social distancing is impossible and people use community latrines, it is inconceivable that these case numbers are even remotely reliable. They are an under-estimate by several orders of magnitude, likely over 100. But in a small area like these, the deaths cannot be hidden by too much, leaving us with a very tiny mortality rate, similar or even smaller than normal flu.

2. The models which have been used to inform the public debates and policy making are at best grossly off-mark and at worst pure snake oil. In the absence of any relevant contextual data to calibrate a model and non-standard parameters that explain the divergent observed trends, they become all the more so. And in public debates, as highlighted by that remarkable snake-oil salesman, Neil Ferguson, only the worst case scenarios of the model get posited. This, this, this, and this are four good resources that discuss the problems with models. 

3. The brute force approaches to addressing the pandemic appears to be nearing its limits. Irrespective of whether the curve is flattening or not, mass lockdowns are in their terminal stages. Meaningful social distancing is pretty much a non-starter in large parts of developing world. The idea of mass testing was never a practical one, and now there are also enough concerns about the efficacy of testing. 

4. Further, while developed countries can rely on technical solutions like work from homes, isolating the old-aged, home-delivery, social distancing in public places and at homes, mass-testing, home and hospital isolation, and the likes, these are largely unavailable for the vast majority of people in many developing countries. Weak state capacity also means that micro-targeting, contact tracing, and other intense surveillance activities are unsustainable beyond a few months. 

5. There are only two denouements to Covid 19. One, a vaccine and/or drug is invented and the same becomes available and accessible for everyone, including the poorest. But if previous efforts are any indication, this looks like a massive long-shot. What makes this pretty much off the table is that even if one becomes available soon, it is difficult to believe that it can be made available to the vast majority of the global poor. 

The second scenario is where the vast majority of people get infected and develops the immune response. Whether this is 60% or 80% is a matter of debate, but it is somewhere in that range. Here, given the numbers required to get infected, lockdowns are actually only sharply slowing down this essential requirement.

So lockdowns and the like are not flattening the curve but merely postponing the inevitable. In fact, there is a strong argument that countries with strong lockdowns or those which have escaped the worst of the disease may be celebrating prematurely and are primed for a relapse once they normalise. As The Economist has written, such virus exceptionalism could backfire badly in the months ahead. 

6. The human suffering and economic damage from the lockdowns has surely already exceeded their health benefits. And much of the economic ground lost may be irretrievable as business shut down and people exit the workforce. A decade or long of lost growth beckons. As the IMF's latest fiscal monitor has pointed out, developing countries do not have anything even remotely close to the fiscal firepower required to backstop the economic decline. Besides the international financial architecture is so badly stacked against any developing country's ability to run meaningfully large counter-cyclical policies.

7. In the circumstances, most developing countries are left with only a few options. Foremost, exit the lockdown in a calibrated (there are practical challenges with too much calibration, since starting factories in a calibrated manner is easier said than done) but fairly swift manner and do everything possible to get the economic activity back to its pre-pandemic levels in the fastest time. Bulges in deficits and ratings downgrade are unavoidable.

The use of masks will perhaps become mandatory, at least in work and public places. Two, protecting the old-aged and immuno-compromised will have to be somehow managed within each household. Three, workplace safeguards, with elements of social distancing etc, will have to be adopted. Four, periodic screening and testing of frontline medical staff will be critical. Finally, mass gatherings will have to become avoidable, atleast for the foreseeable.

And they will face the recurrent episodes of localised flareups of the disease, which would necessitate varying degrees of restrictions. Countries and cities will have to plan for a practical response to this scenario. Is there any other way out of the lockdown chakravyuha?