Viruses need no visa and know no borders at all. They do not discriminate. Few cardiologists and pulmonologists told me that viruses are fast moving and may have a longer shelf life than expected. It would not be wrong to say that for what the world now faces, we have not seen, even in the most harrowing episodes of the Middle Ages or the great wars of the last century. To win against Covid-19, we need to put out the fire that's underway in most aggressive way.

We are now in a tug of war situation between those that want to give this virus more of a chance to be beaten down versus those who want to open up the economy. I belong to the former group. Economic proponents argue that we have to be realistic - going back to work in order to put food on the table, to escape the travesty of poverty, which carried a huge economic cost. The cost of late response, lack of response and/or stupidly over-confident can be economically damaging. China reported that its economy had shrunk in 1Q2020, ending a streak of untrammelled growth that survived the Tiananmen Square crackdown, the SARS epidemic and even the 2008/09 global financial crisis. Singapore extended lock-down period to June as cases among work permit holders and dormitory residents began climbing from 1st April even as the number infected in the community flattened and imported cases fell to zero. The number now stands above 2,800 - a 70-fold increase from 38 cases in 3rd April. Hokkaido meanwhile, imposed its second state of emergency in two months after it flattened curve on 18th March because Japan failed to appreciate an explosive phase of this outbreak. It was once seen as something of a success story!

In the case of US, President Trump pushes to re-open the economy despite flawed tests, scarce supplies and limited access to screening have hurt the U.S.’s ability to monitor Covid-19. Trump's unilateralism brings about the 1930s eerily experience when the Smoot-Hawley Tariff Act ushered in American isolationism, triggered a trade war with many countries, shattered Wall Street confidence, and aggravated and prolonged the Great Depression, not until then-president Roosevelt reversed this. Governors, health officials and business leaders including banking and financial services executives, who participated in the conference call of Mr. Trump’s advisory council warned that greater focus on public health and safety aspects is the right way to help get the US economy back in order. Premature re-opening could backfire with deadly consequences. United States now has more cases and deaths than any country today.

Fiscal stimulus, tax credits, and monetary incentives help. See our previous writings on this matter.

Risks of virus mutation and reactivation are real. According to Centres for Disease Control and Prevention South Korea, there is growing number of recovered patients had retested positive for Covid-19, most of them in Daegu and North Gyeongsang province, the original centre of the country’s outbreak. In the case of SARs and MERs, we did not see people testing positive again after full recovery. It raises serious doubts about the ability to develop a vaccine. Recurring illness would place additional strain on health systems as well. Do not be naive to think that this outbreak is not your problem! Is my anxiety normal or new normal?

Chee Seng, Wong
CIO, Athena Advisors
wong-chee-seng@outlook.com