• The world is still struggling to handle the ravaging Covid-19 pandemic and the deep economic recession caused by massive lockdown measures as we start the year 2021. Risks and uncertainties have undoubtedly remain, with mounting protectionism and anti-globalisation sentiment adding to the global economic challenges.
• While 2020 has been described as “the worst year ever” – which resulted in enormous and endless pain – still good things happened, giving hope, courage and confidence. Following months of fight against the pandemic, the global community has demonstrated the will and determination to work together to defeat the virus and revitalise the world economy.

• With more positive news from vaccine trials, the light at the end of this long and dark tunnel is growing brighter. After a projected 4% decline in 2020, the global economy is now expected to expand around 5% to 5.5% in 2021. Much of 2021 growth will depend on controlling the spread of the virus besides the vaccine deployment. The speed of the economic recovery will also rely on the reinvestment cycle as well as structural reforms aimed at sustainable growth.

• Compared with the panic and disorder at the beginning of the outbreak, countries across the world have gradually established pandemic prevention systems. There has been better public understanding supported by a rational attitude.

• According to the World Health Organization (WHO), as of 16 Dec, the number of Covid-19 candidate vaccines being developed worldwide stood at 222. Out of these, 56 are under clinical trials. While encouraging news about more effective anti-viral treatments and promising vaccines that could tame the pandemic by end-2021 had raised the level of optimism, it has slowly slipped.

• Despite some bright spots emerging at the end of the dark tunnel, the challenge to address the pandemic has again raised concerns at the start of 2021. The surge in the number of Covid-19 cases compounded the fresh challenge of a mutating virus.

• The WHO on 7 Jan 2021 has warned that the fight against the pandemic is at a “tipping point”. Being easily transmissible, it means that more people can get infected. This could mean more serious infections and more fatalities. Hence, the centre of attention now is to have strong unity both at the global and country level to address the spread and mutation of this virus. It will depend on the measures taken to address the spread.

• Lockdowns only work if they reduce transmission. And transmission can only be reduced if those who are sick self-isolate. Such measures comes at a great cost. Those who are unable and cannot afford to self-isolate will face a choice between financial devastation and compliance. By not providing proper support, this group of people will be forced to decide between their families and communities.

• Such choice is seen as a cruel option. Past lockdowns and movement control orders (MCO) have revealed the Covid-19 disparities were driven by differences in exposure at home and work. Those of lower socio-economic status were hit the hardest by both the virus and the collateral damage of restrictions.

• As a result of the restrictive movements, almost all risk is shifted to the millions workers who cannot work from home, and those who live in deprived areas as well as in overcrowded houses. These two groups often overlap. The new variant of Covid-19 is significantly more infectious. The risk of rising cases remains high.

• Hence, like lockdowns and MCOs, testing and tracing will only reduce transmission if the number of infectious cases are being isolated effectively. Yet how successful will it be? It remains unclear. Much will depend on adherence to the rules of the restrictive measures. In particular, those in the lower income group and cannot work from home will be badly afflicted.

• This time around, with the rising number of Covid-19 cases, unprecedented restrictive measures are set to be introduced. Should that happen, there is a need to provide proper self-isolation support. Otherwise, this would mean that there will be protection for some, and pandemic for others. The reason being there are two categories of people i.e. those who have the means to stay at home and those who cannot, no matter how much they want to.

• Hence, there is a desperate need for action from the government. Key workers must be guaranteed social and income protection. Additional support must be provided to ensure lowly-paid, non-salaried and zero-hour contract workers can afford to follow isolation rules.

• For individuals to be able to self-isolate, support should include a daily text or phone call and provision of food supplies and essential goods. There is a need for solidarity and togetherness rather than divisive messaging. Workplaces must be made safer.

• The government should use unoccupied hotel rooms to provide accommodation so that people, particularly those in crowded and multi-generational households, are able to self-isolate just like it’s practised in New Zealand, South Korea and New York.

• Aslo, by addressing the barriers faced by socio-economically vulnerable group, it will increase test uptake. For instance, a pilot of mass-testing was rolled out in Liverpool. But the government ignored the requests from local public health leaders for additional funds to support isolation. As a result, the mass-testing reduced following low-test uptake from the deprived communities. It was due to the fear of not having adequate support to self-isolate.

• Sweden’s Covid-19 strategy in 2020 is seen as coming to an end in 2021. The government recently proposed an emergency law that would allow it to lock down large parts of society, recommended the use of face masks, and schools to have the option to close for pupils over 13 – all changes to its strategy to combat the pandemic.

• It appears that Sweden does not stand out from the rest of the world very much now. And with Sweden’s strategy being perceived as failing, it suggests that restrictive measures are necessary to contain the virus.

• The effectiveness of the restrictive measures depends on the isolation of infectious individuals, which is the single most important measure in terms of controlling transmission. If the basic public health brake levers are not pulled up to slow the spread of the virus, it will continue to transmit. The effectiveness of the lockdown will be limited if the financially vulnerable groups are not self-isolated. It will be seen as the government shooting for the moon without looking at the rocket’s fuel.

Source: AmInvest Research - 14 Jan 2021