A few weeks ago the CS Treasury was kind enough to publish and gazette the government’s income and expenditure statement for July, the first month of the current financial year. They are only a few numbers, but they are quite revealing.
The government opened the year with KSh 102.8 billion in the bank. It raised KSh 99 billion from taxes, and borrowed KSh 30 billion locally, that is, total inflows of KSh 129 billion during the month. How was the money spent? Debt took KSh 68 billion, just under 70 percent of the tax raised. The counties and development budget got no money at all. The Treasury closed the month with KSh 110.7 billion, KSh 8 billion more than the opening balance. Why did the Treasury hoard money when the counties and development projects were starved of cash? I will come back to that question shortly.
It is tempting to think that this was only the first month of the financial year, and things will look up. Not quite. Treasury puts revenue for the full financial year at KSh 1.34 trillion which translated to a KSh 112 billion monthly average, so the July revenue figure is low but not far off the mark. The debt service budget for the year is KSh 870 billion, which works out to KSh 72.5 billion per month so the July figure of KSh 68bn is also consistent. The domestic borrowing target for the year in the budget is KSh 270 billion, which works out to KSh 23 billion per month, so the July borrowing of KSh 30 billion is well above target.
In essence, the July statement is a good snapshot of the state of government finances. Unless revenue increases dramatically, the only way the government will be able to stay afloat is by excessive domestic borrowing. Borrowing more than it is doing already will put paid to any chances of recovery of credit to the private sector, which stalled three years go. And one does not have to be an economist or finance expert to appreciate that a person, business or government spending 70 percent of income to service debt is distressed.
How did we get here? Binge borrowing.
As at end of June 2018, our total public debt was KSh 5.2 trillion, up from KSh 1.8 trillion five years ago, an increase of KSh 3.3 trillion. Jubilee has borrowed close to double the debt it inherited. The debt has increased more or less equally between domestic and foreign borrowing. The second is cost of debt.
Unless revenue increases dramatically, the only way the government will be able to stay afloat is by excessive domestic borrowing. Borrowing more than it is doing already will put paid to any chances of recovery of credit to the private sector, which stalled three years go. And one does not have to be an economist or finance expert to appreciate that a person, business or government spending 70 percent of income to service debt is distressed.
The stock of debt has increased 187 percent but debt service outlays are up 230 percent, from KSh 264 billion to KSh 870 billion. The standout figure here is foreign interest, which has increased sevenfold from KSh 14 billion to KSh 114 billion. This in turn, is explained by two factors, foreign commercial and China debt. Five years ago, foreign commercial debt was inconsequential— we owed only one syndicated loan and that was an exception. We were not in the habit of taking on foreign commercial debt. Five years on, commercial debt is the single largest item on foreign debt accounting for 36 percent of it. We owed China KSh 63 billion accounting for seven percent of foreign debt. Debt to China is now up to KSh 550 billion accounting for close to 30 percent. Commercial debt and China combined account for 80 percent of the increase in foreign debt.
We, of course, expect commercial debt to be more expensive than the soft loans from bilateral and multilateral development institutions. But Chinese debt is not cheap either. Last year’s debt service figures show that we owed China 21 percent of foreign debt, but we paid them 32 percent of the interest. Multilateral lenders account for 33 percent of the debt but only 15 percent of the interest payments (See chart). The interest rates implied by these payments, although only a rough approximation, show that China’s debt is the most expensive at 4.8 percent, followed by commercial debt at 3.9 percent, other bilateral lenders at 2.4 percent and multilateral lenders are the cheapest at 1.4 percent. But as I said, these are implied rates, not the actual ones, as they do not reflect the debt movements within the year.
Jubilee has borrowed close to double the debt it inherited. The debt has increased more or less equally between domestic and foreign borrowing. The stock of debt has increased 187 percent but debt service outlays are up 230 percent, from KSh 264 billion to KSh 870 billion. The standout figure here is foreign interest, which has increased seven fold from KSh 14 billion to KSh 114 billion. This in turn, is explained by two factors, foreign commercial and China debt.
Different components of debt affect the budget differently. Interest comes out of the recurrent budget, and in effect from revenue. Working with a realistic figure of KSh 1.4 trillion revenue, the interest burden this year takes 29 percent of revenue up from 14 percent five years ago. In fact, interest cost is now equivalent to 90 percent of the wage bill as compared to 40 percent five years ago. Interest on debt is crowding out the Operations and Maintenance (O&M) budget. O&M is what makes government work. It is the money that enables the police to move around, and health facilities to treat patients, government laboratories to test food and drugs and so on.
On this trajectory, it will not take long for the recurrent budget to consist of only salaries and interest
The foreign debt consists of market debt (the Eurobonds), syndicated loans and term loans.
Eurobonds and syndicated loans are similar. The key difference is that syndicated loans are short-term notes, typically sold in two-year cycles, which banks typically hold to maturity. Amortization of bonds and syndicated loans (i.e. repayment of principal) is financed by new market debt, and is known as re-financing. The principal on bank debt has to be repaid. The key concern with market debt is the refinancing risk. The government has to be able to sell new bonds as old ones mature. The market conditions can change, or the investors risk-perceptions can change to the extent that the government is unable to sell enough bonds in which case it defaults. Alternately, it may have to offer such high returns that sooner or later, it cannot afford the interest, which amounts to the same thing— default.
Which brings me to the KSh102 billion shilling cash hoard— the money that government had but did not spend in July. This is half the money that the government raised in the second Eurobond six months ago. It was not spent because it was raised to refinance the maturing debt, KSh 250 billion this year. The balance has to be raised.
The key concern with market debt is the refinancing risk. The government has to be able to sell new bonds as old ones mature. The market conditions can change, or the investors risk-perceptions can change to the extent that the government is unable to sell enough bonds in which case it defaults. Alternately, it may have to offer such high returns that sooner or later, it cannot afford the interest, which amounts to the same thing— default.
The preferred option is to float another Eurobond, preferably a long dated one that does not come up for refinancing soon. The alternative is more syndicated loans which will cost more and come up for refinancing in two years. The market environment that they will be doing this is not favourable. When we raised the first Eurobond in 2014, the market was awash with “Quantitative Easing” (QE) money the US Federal Reserve and European Central Bank were “printing” in order to shore up their banking systems following the 2007 financial crisis, as well as “petrodollars” accumulated by oil exporters—recall that oil was selling at over $100 a barrel). The returns on financial assets in advanced markets were close to zero or negative.
Money managers were looking for higher returns wherever they could find them. Emerging markets were growing fast, and news out of Africa was dominated by the “Africa Rising” story.
Zambia was one of the first countries to jump onto the Eurobond bandwagon. Zambia floated a debut bond, looking to borrow US$500 million. It was heavily oversubscribed, attracting offers in excess of US$ 12 billion. Zambia accepted $750 million. Kenya’s stated objective was to issue a US$500 million “benchmarking” bond and use the proceeds to offset a syndicated loan that was due. How this turned to a US$ 2.8 billion is a story for another day— where it went is already the stuff of legend.
Our political class seems not to have understood the paradigm shift that becoming a sovereign borrower in international markets entails. Going to the market is analogous to a business going public. When a company is private, its affairs are dealt with behind closed doors. The only way unhappy investors can express their views is with their voices, or voting out directors during the annual general meetings, and this is usually quite difficult as typically, the insiders usually have more shares than outsiders. When a company gets listed on the stock exchange, investors don’t have to wait for AGMs. They communicate with the company every day by either buying or dumping the stock. Facebook’s share price fell 11 percent (US$134 billion) in the wake of the Cambridge Analytica scandal—and that’s all the shareholders needed to say.
Prior to “listing” in the international sovereign bond market, our financial affairs were discussed behind closed doors between the government and its external financiers led by the IMF, and enforced through “conditionalities.” Sanctions for non-performance were flexible and negotiable, and influenced by political considerations. We call this programme discipline. After “listing”, the bond yields work the same way as share price, punishing or rewarding the country for good or bad economic management as the case maybe. We call this market discipline. The IMF continues to have a role, but a different one— providing a form of credit enhancement to the markets.
Our political class seems not to have understood the paradigm shift that becoming a sovereign borrower in international markets entails. Going to the market is analogous to a business going public. When a company is private, its affairs are dealt with behind closed doors…When a company gets listed on the stock exchange, investors don’t have to wait for AGMs. They communicate with the company every day by either buying or dumping the stock.
But Zambia’s government does not seem to have gotten that memo. Sometime ago it organized national prayers for the Kwacha, hardly a confidence building measure. A quarrelsome negotiation with the IMF broke down in February. Last week, the government kicked the IMF out of the country for “spreading negative talk”. The markets responded accordingly. Zambia’s bonds are trading at a bigger discount than Mozambique which has already defaulted.
As of last week, Zambia’s bonds were trading at a yield of 15 percent. An increase in the yield corresponds to a decline in value of a bond, and vice versa. Zambia’s debut Eurobond carries a coupon of 5.375%, and was issued at a yield at 5.625%, meaning that investors paid $93.50 for $100 of face value. A yield of 15 percent means that the bond is now trading at $36, a 60 percent fall in value. As summed up by an investor in Zambian Eurobonds: “It’s not a place that investors would rush into even if emerging markets become popular again. People will be cautious about Zambia until it produces better numbers or gets an IMF deal.”
Why our Treasury mandarins have been bending over backwards for a deal with the IMF is now readily apparent. IMF deal or no-deal, the government will have to produce better numbers. Healthy foreign exchange reserves are good, but reserves don’t service debt; revenues do. The markets want to see fiscal consolidation. The markets do not send missions. They dump your bonds.
The low-down: Mega projects are off the table, as is the “Big Four.” The SGR is not going past Naivasha anytime soon. The only order of business is crisis management – that is, if the government survives. Looking around, the odds are not good. The Greek crisis consumed five governments. Argentina went through five presidents in two weeks following imposition of the “corralito” (small enclosure) austerity measures in December 2001. The EPRDF autocracy in Ethiopia, erstwhile poster child of Africa’s new breed of authoritarian developmental regimes, did not run out of bullets or prisons. It ran out of money, and unravelled. Sri Lanka, Pakistan and Malaysia have ejected the mega-project mega-corruption governments that corralled them into China’s debt trap. Earlier this week Sudan’s President Omar al Bashir dissolved his government and appointed a new prime minister tasked to form a leaner government “as part of austerity measures to tackle economic difficulties.”
Mega projects are off the table, as is the “Big Four.” The SGR is not going past Naivasha anytime soon. The only order of business is crisis management – that is, if the government survives. Looking around, the odds are not good. The Greek crisis consumed five governments. Argentina went through five presidents in two weeks following the imposition of austerity measures in December 2001. The EPRDF autocracy in Ethiopia, erstwhile poster child of Africa’s new breed of authoritarian developmental regimes, did not run out of bullets or prisons. It ran out of money, and unravelled…It is fair to say that Mr. Kenyatta is now caught between the hammer of the markets, and the anvil of politics.
It is fair to say that Mr. Kenyatta is now caught between the hammer of the markets, and the anvil of politics. That comes with the territory.
Lockdown: Flying Blind in the Season of Coronavirus
The government’s contingency plan for tackling the coronavirus is not clear and so far appears to focus on surveillance and containing the spread of the coronavirus pandemic. It needs to invest in the clinical set-up beyond capacity but the supply of oxygen ventilators and other materials is likely to be complicated by the greatly increased demand in the global market.
A dozen military trucks roll out of the memorial cemetery in Bergamo, northern Italy, on the evening of March 19, 2020. Three more follow them. Each is carrying bodies that have been piling up for days inside the cemetery church because the city crematorium cannot cope with the deaths from the coronavirus pandemic.
One of the coffins being loaded onto the trucks by forklift holds the body of 74-year-old Italian software engineer Duilio Scaricamazza, recently returned from an East African business trip that took him to Uganda, Kenya and Djibouti in early February.
The closest the world has come to this scale of tragedy from a contagion in recent times are the Ebola outbreaks in West Africa, which the World Health Organisation classified as a public health emergency of international concern in July last year.
Videos of the military trucks are the only ritual of Duilio’s final journey through which his family and friends will reach closure. He had passed all the screening tests at the departure and arrival lounges in Kampala and Nairobi. Airport thermometers and thermal scanners, notorious for failing to detect Ebola, serious acute respiratory syndrome (SARS) and H1N1 influenza, are no match for the fever, cough and shortness of breath that are the symptoms of the coronavirus disease.
Those who contract the coronavirus can sometimes fail to show any of these symptoms and it is not clear if Duilio was infected before his return home to Italy but, in less than a month, he was dead from COVID-19, the disease caused by the coronavirus.
On December 31, 2019, Chinese authorities reported to the WHO country office that they had detected a pneumonia of unknown cause in Wuhan. WHO subsequently classified the outbreak as a Public Health Emergency of International Concern on January 30, 2020, giving it its name, COVID-19, on February 11, 2020, and declaring it a pandemic a month later.
“Once you have a system that warns you of an oncoming pandemic like this one, you will have the time to map out your immediate areas of focus. For example, had Kenya had an early warning system that could show us where the first case would potentially come from, we would have cancelled flights to and from those places as a national security priority”, says anthropologist and media columnist Gabriel Oguda.
After news of the epidemic first broke in Wuhan, where 91 Kenyan students live and nine artistes were visiting, Ambassador Sarah Serem decreed that these 100 people would not be repatriated for fear of infecting one another, and bringing the disease home.
Less than a month after Serem’s statement, on February 27, 2020, Kenya Airways suspended airport security guard Ali Gure from his job for posting on his social media page a photograph of a Chinese airline landing at the Jomo Kenyatta International Airport with 239 passengers on board.
The Law Society of Kenya, two doctors and a lawyer obtained a High Court order the following day temporarily stopping flights from China and other coronavirus hotspots. Jolted by Justice James Makau’s order, which also required the government to take robust measures to prepare for the virus, President Uhuru Kenyatta established a coronavirus task force and ordered the completion of an isolation facility in seven days.
By then the horse had bolted and the country had begun a hopeless search for Patient Zero. No one seemed to know where to find him or her.
A fortnight after the court decision, Kenya announced it had found its first COVID-19 case—a 27-year-old arriving from the United States through London. Just two days later, on March 16, 2020, Kenyatta ordered a shutdown of schools, workplaces and a ban on large gatherings—and called a national day of prayer.
Erroneously described as a flu-like disease, COVID-19 is actually the collapse of the breathing system when the lungs swell and fill with fluid.
By then the horse had bolted and the country had begun a hopeless search for Patient Zero
Dr Warurua Mugo, a Nairobi-based chest specialist, explains that the virus enters the body through the nose or mouth and makes a home in the air sacs where it infects the protective epithelial cells, hooks itself onto membranes, and begins to multiply thus closing off the supply of oxygen and causing swelling in the lungs as they fill with fluid. The patient is overwhelmed by a sensation of drowning, and only a respirator and supplemental oxygen can hold death at bay because there is often the risk of multiple organ failure or septic shock.
“[When] WHO declared the first case of [COVID-19], that’s the day the president should have summoned the Health minister and asked him to constitute that corona team. We needed not to wait for the virus to start causing havoc before starting to run all over the place”, says Oguda.
What started as a droplet has turned into a steady trickle, with cases popping up in rural spots where people arriving from Europe and the United States have visited.
By March 15, 2020, Kenyatta felt compelled to order suspension of travel into the country except for national and permanent residents, self-quarantine for those who had arrived 14 days earlier, a shutdown of schools, and heightened hand hygiene and physical distancing.
With the count of COVID-19 cases reaching 25 in the country, some 96 people traced, tested and released, and the search on to trace 700 others believed to have come into contact with the infected, tighter restrictions are coming into force. Kenyatta’s new salesman, the former spin-master and one-time information communication technology minister Mutahi Kagwe, has been gently turning the screws since taking charge as Health Cabinet Secretary, with the country headed into a likely lockdown. Bars and restaurants have been closed, worship congregations banned, funeral attendance has been limited to only 15 family members and the number of passengers allowed in a public transport vehicle cut by half as exhortations to increase physical distance and wash hands regularly have doubled.
The patient is overwhelmed by a sensation of drowning, and only a respirator and supplemental oxygen can hold death at bay
Although Kenya was the first country on the continent to go into a 30-day slowdown, it has been swiftly followed by South Africa, which announced a 21-day lockdown and suspended all flights. Nigeria and Egypt, which identified COVID-19 patients ahead of Kenya, have similarly ordered lockdowns, as have Uganda and Rwanda, Angola, Burkina Faso and Namibia which were initially measured in their response. Tanzania and Sierra Leone, both of which were hesitant to take strong action, are following suit.
“It is overwhelming”, says Dr Ouma Oluga, the secretary-general of the Kenya Medical Practitioners and Dentists Union. “Doctors and health workers are a worried lot. Political directives that might be [well-intentioned] are being issued without adequate preparation on the ground, and therefore not congruent with reality”.
Countries have been cautioned against fighting the pandemic blindfolded, and as the WHO Director-General, Tedros Ghebreyesus, said on March 16, 2020, the way to fight back is through “testing, testing and testing”.
“Our numbers are likely to be underestimated because of low testing capacity”, Oluga adds. “Stringent criteria on who to test, because not everybody needed to be tested, meant waiting for people to be ill before testing”.
Danni Askini, an American healthcare professional, was billed $34,927 (Sh3.7 million) for the treatment she received after contracting Covid-19. Testing alone cost her $907 (Sh96,142). India’s government announced a 4,500 Rupees (Sh6,255) cap on what private laboratories can charge for two polymerase chain reaction tests for coronavirus.
The coronavirus epidemic is also showing up Kenya’s low investment in research. The National Influenza Laboratory in Nairobi, the Kenya Medical Research Institute (Kemri) in Nairobi, Kisumu and Kilifi as well as the University of Nairobi have the capacity to test for the coronavirus, and could be supported by private laboratories at Aga Khan University Teaching Hospital and Lancet Kenya. The shortage of testing kits has meant that results, which would typically come in after six to eight hours, are instead available in 24 hours. Chinese billionaire Jack Ma and his Alibaba Foundation donated 1.1 million test kits to Africa this week, with Kenya slated to receive 20,000 test kits, 100,000 masks and 1,000 medical suits and face shields.
What started as a droplet has turned into a steady trickle, with cases popping up in rural spots where people arriving from Europe and the United States had visited
There are two ways to become immune: one is to experience the infection to create antibodies, or receive a vaccine to stimulate antibodies without experiencing the disease. Britain had initially opted to tough it out and wait for those who would die of COVID-19 to do so before the pandemic stabilised, thereby creating what scientists refer to as herd immunity. It changed tack after WHO admonished the strategy: “Not testing alone. Not contact tracing alone. Not quarantine alone. Not social distancing alone. Do it all”, said Ghebreyesus.
“Herd immunity eventually develops but over a long period time of continuous exposure. I disagree with epidemiologists who expose everyone who expect immediate herd immunity because it can develop after 50 to 60 years . . . you lose it with time . . . the casualties would be too high, and vulnerable people will die”, Oluga says.
Shutdowns are an attempt to break transmission in order to enable health services to regroup and deal with the cases that show up. But the messaging has not been without its light moments. Justifying the ban on bars, Uganda’s Yoweri Museveni said, “Drunkards sit close to one another. They speak with saliva coming out of their mouth. They are a danger to themselves. All these [merrymaking activities] are suspended for a month”.
The irony of asking Kenya to go into lockdown when much of its population is already cooped up in congested and unsanitary residential areas, has been completely lost on the government. According to the Economic Survey 2019, there were 14,865,900 people working jobs in the informal sector. “The informal sector is characterized by small scale activities, easy entry and exit, skills majorly gained from vocational schools, less capital investment, no or limited job security and self-employment”.
“This sector excludes illegal activities,” the Survey adds. These statistics belie the precarious nature of the jobs in the informal sector: they are day-wage occupations that finance hand-to-mouth survival. Only 2,765,100 people are in formal wage employment and just 152,200 are in self-employment.
The Kenyan Section of the International Commission of Jurists (ICJ-Kenya) has appealed to the government to issue directives on food prices and other basic commodities as well as medicines and items that will be important in preventing and treating COVID-19.
The coronavirus epidemic is also showing up Kenya’s low investment in research
Additionally, ICJ-Kenya has urged the government to develop and implement socio-economic responses for Kenyans in informal employment who are not able to “work from home” and who would need assistance in meeting their basic needs.
Big economic players like tourism and travel, as well as horticulture, are in shutdown in an economy that had been projected to grow at 6.2 per cent. Central Bank of Kenya governor Patrick Njoroge announced that Kenya would be seeking $350 million emergency assistance from the World Bank.
Relief offered so far by the government in the form of free hand sanitisers, Loon balloons from which 4G internet will increase mobile phone coverage, and waiver of mobile money transaction fees charged by banks, does little to address the lived realities of people. Digital contact tracking is emerging as one of the tools—albeit controversial—for tackling the pandemic. Correspondence to Safaricom seeking confirmation that the firm would be assisting in tracking passengers who arrived in the country early this year—especially given that two Chinese telecommunication companies were able to track the movement of people out of Wuhan in the early days of the epidemic—did not receive a response.
Salome Bukachi, professor of medical anthropology at the University of Nairobi, says dialogue with the community can contribute to creating protocols for quarantine, lockdown and isolation in a manner that balances respect for social backgrounds and public health needs.
Alessandro Scarci, an Italian lawyer based in Kenya for the past 20 years who has been following developments in his home country, says no health system can withstand the pressure from the pandemic. Milan, which is one of the wealthiest parts of Europe, has seen one of the best health systems collapse. “Even if you think you can improve the health system, without 1,000 per cent containment, you cannot manage this pandemic if you do not contain people”, says Scarci. “Unless there are plans to distribute food and water for free in poor residential areas, and the armed services patrol the streets, there is going to be a riot,” he adds ominously.
Oluga agrees that a lockdown is probably the best option, but for developing countries with insufficient cash reserves and chronic underfunding of social protection, this path is fraught with difficulty. Some 2.5 million people live in slums in Kenya, where houses can be as small as 12 feet by 12 feet, without reliable water or sanitation services.
Acts of austerity belie the crisis waiting to explode in Kenya and on the continent. Treatment requires isolation beds, respirators and oxygen. And it requires people. So far, Kenya has announced that it has trained 1,100 health workers. Those numbers will prove woefully inadequate if more infections show up.
Milan, which is one of the wealthiest parts of Europe, has seen one of the best health systems collapse
Shortages of testing materials and capacity, as well as the low numbers of healthcare workers has meant that where one patient is diagnosed with the disease, seven doctors are in isolation, he adds. The effect on an already strained health workforce is likely to be devastating.
In Nairobi, nurses at Mbagathi Hospital—the institution designated as the isolation centre for COVID-19—went on strike to protest against uneven training and unavailability protective gear. Moreover, there is a limit to the number of patients healthcare workers can handle.
Already, the number of people currently being traced is quickly outstripping the 120-bed capacity at Mbagathi, the additional 60 beds at the Kenyatta National Hospital and the 300 reserve places at the Kenyatta University Teaching and Referral Hospital. Around the country, Moi Teaching and Referral Hospital (25), Kakamega Hospital (25), Meru County’s Level 5 Hospital (20), Coast General Hospital (19) and King Fahd Hospital in Lamu (8) bring the national total to just under 600 beds.
Still, questions linger about what will happen on April 16 when the 30-day measures announced by the government are supposed to be reviewed. What is the end-game in managing the COVID-19 epidemic in Kenya? After the lapse of the first 30-day measures, what would be the next steps? What are the best and worst-case scenarios for managing COVID-19 in Kenya after April 16? These questions were sent to CS Kagwe and to the Principal Secretary at the Ministry of Health, Susan Mochache, with no responses forthcoming.
On Tuesday, March 24, 2020, Law Society of Kenya lawyer Ochiel Dudley said the government had not filed its contingency plan for tackling the coronavirus as required by the High Court—but the judge was hesitant to ‘recall a general from the battlefront’.
So far, official scenario mapping has appeared to focus on surveillance and containing the spread of the pandemic. “We need to invest in the clinical set-up beyond capacity and think about what are we doing when people come to hospital”, says Oluga. “If treating, what we are doing needs to be endorsed and published in the form of second, practical guidelines”. Besides the headaches of infrastructure in terms of availability of beds in intensive care, the supply of oxygen ventilators and other materials will likely be complicated by the greatly increased demand in the global market.
Thoughts on a Pandemic, Geoeconomics and Africa’s Urban Sociology
The global economic shock triggered by the coronavirus pandemic is unprecedented in scale and severity. How will African governments survive this financial crisis, given that many are heavily indebted and poorly equipped to deal with a pandemic of this nature? What kind of economic stimulus measures are required to ensure that people don’t sink further into poverty?
So far, Africa is well behind the curve in terms of the coronavirus infection. At the time of writing, there were 1,388 confirmed cases on the continent out of just over 320,000 confirmed cases globally. Four North African countries – Egypt, Algeria, Tunisia and Morocco – had 679 cases, which represented about half of the total cases in Africa. South Africa alone had 240 cases, and there were 479 reported cases across 39 African countries.
It is as yet unclear why the numbers in Africa are so low, although several South Asian countries close to China have similar low numbers. Candidates include high temperatures, low international travel (Africa accounts for only 2 per cent of global air travel), limited testing, and the youthful population, which could be infected but not exhibit symptoms.
The so-far-so-good numbers notwithstanding, African countries are not taking chances, and are adopting the same measures as elsewhere – outlawing large gatherings, closing schools, restricting air travel, and so on. These actions are welcome because they have raised awareness in a way that messaging alone would not have, proof positive that actions speak louder than words.
We need to get a better sense of the actual infection rate. Are the low numbers real or a result of under-testing? Establishing definitively whether the virus is spreading locally or not is imperative.
Living arrangements in many urban settings will make it difficult for infected people to isolate themselves. If there is already community transmission, then the best strategy is containment. If or where there is none, then decongesting the urban areas by encouraging people to temporarily relocate to their villages should be considered. It seems to me that this can be established by purposive sampling of people and population clusters with the highest exposure to international travel, such as airlines, airports, international hotels, and tourism hot spots. This is critical.
Medical resources are a huge survival factor. Patients who are put on ventilators have a high survival rate, but these are in short supply. As I write, Germany has lost 94 people out of 25,000 (one per 265), while France, with 16,000 cases, has lost 674 (one per 24). Both countries have similar demographic profiles, but Germany has two and a half times more intensive care beds (29 per 100,000 people) than France (11.6 per 100,000 people). This implies that if 100 patients need intensive care beds at once, Germany could save all of them, but France could lose 60. Italy’s capacity is about same as France’s, at 12.5, but the U.K’s, at 6.6, is less than a quarter of Germany’s. This is a huge and somewhat startling difference between countries that we in the global South see as more or less equally developed.
Living arrangements in many urban settings will make it difficult for infected people to isolate themselves. If there is already community transmission, then the best strategy is containment. If or where there is none, then decongesting the urban areas by encouraging people to temporarily relocate to their villages should be considered.
Most sub-Saharan African countries have less than one bed per 1,000 people, and less than 2 intensive care beds per 100,000 people. Because of our youthful population, we may not need as much capacity as Europe’s older population. Still, if one per cent of the population gets infected and 5 per cent of the infected population needs hospitalisation, this translates to a requirement of one bed per 2,000 people, which is more than half the total bed capacity in many countries. If 10 per cent of those hospitalised need critical care, this translates to a requirement of 5 intensive care beds per 100,000 people. We simply don’t have them. And there isn’t much lead time to scale up bed capacity. Moreover, with global supply chains and international trade severely disrupted, and demand surging everywhere, we can expect procurement of medical equipment to be a challenge during the crisis.
Countries will have to plan how to respond with the resources available. They need to make contingency plans on how they will mobilise facilities quickly if required. For example, one or more hospitals in a catchment area could be designated as coronavirus response facilities and trigger points when non-coronavirus patients would be evacuated to other facilities. In countries with a diverse mix of public and private hospitals, it may be necessary to pool and centrally coordinate utilisation so as to ensure maximum availability and optimal resource allocation. A class-based health system, such as the one we have in Kenya, is a luxury we may no longer be able to afford.
Africa and the 2020 global financial crisis
The global economic shock triggered by the coronavirus pandemic is unprecedented in scale and severity. While the 2007-08 global financial crisis was very severe, and its aftershocks are still reverberating, Africa was not severely affected. The impact, as measured by GDP growth, was less than that felt in all other developing regions, except Asia (due to the China effect).
Africa also recovered faster (see Chart. 1). There are two reasons for this. First, the shock was financial, and Africa was – and still is, for the most part – the least globally integrated region financially. Second, Africa’s public finances were in very good shape prior to the crisis, with low debt and low deficits, which made governments well-positioned to roll out aggressive stimulus packages. Third, China’s aggressive stimulus package kept the demand and prices of primary commodities buoyant.
Typically, economic shocks are either external or domestic, seldom both. This shock is both, and the two dimensions are mutually reinforcing. It has two global dimensions: trade and finance.
The trade shock is already affecting Africa through export earnings. Oil-dependent economies, such as Angola and Nigeria, are already looking at oil prices below $30 (down from $70 at the beginning of the year). If these prices persist, they will seriously impair government revenues and the servicing of external debt. Countries that are heavily dependent on tourism and fresh produce exports (notably, those in East Africa), are looking at heavy losses too.
We noted that Africa survived the global financial crisis bullet largely unscathed in part because of low global financial integration. This is no longer the case. After 2007, several African countries entered the sovereign bond market, known as Eurobonds. Before 2007, only two sub-Saharan African countries – South Africa and Seychelles – had floated international sovereign bond markets. Today there are more than 20 countries that have issued Eurobonds with an outstanding value of over $100 billion.
In addition, many countries have also borrowed heavily from foreign banks in the form of syndicated loans. Kenya is a good example. It has $10 billion of foreign commercial debt divided equally between Eurobonds and syndicated bank loans. A decade ago, Kenya had no foreign commercial debt. Commercial debt now accounts for a third of the country’s foreign debt.
These bond-issuing countries are now heavily dependent on global financial markets to finance their budgets, and more importantly, to refinance the bonds when they mature. How they will fare depends on how markets react to the crisis in the coming months.
Typically, economic shocks are either external or domestic, seldom both. This shock is both, and the two dimensions are mutually reinforcing. It has two global dimensions: trade and finance.
After the 2007-08 global financial crisis, the markets, awash with liquidity released by central banks, and facing recession and low interest rates in mature markets, turned to emerging and frontier markets for higher returns – “hunting for yield”, as they call it. If the markets do the same, then the financially exposed countries may weather the crisis unscathed. But given the systemic nature of the underlying economic crisis, money could well take “flight to safety”, in which case defaults will loom large.
Where things go from there will depend on how much external financial support from international finance institutions – bailouts if you like – will be available. The International Monetary Fund (IMF) has announced that it could make up to $50 billion available quickly to low-income and emerging market countries. This is not much – it’s less that the IMF’s 2018 bailout package to Argentina ($57 billion). Besides this, the IMF can lend its members normal loans of up to a total of a trillion dollars. (A trillion dollars is in the order of 1.2 per cent of global GDP) Although the IMF uses a complicated formula for each country’s quota, I will use pro rata to illustrate how the IMF might allocate bailouts. On a pro rata basis, Nigeria could borrow $4.5 billion, Kenya could borrow $0.8 billion and Ghana could borrow $0.5 billion. By way of comparision, Kenya’s lapsed precautionary facility was $1.5 billion, while the facility recently extended to Ethiopia is $2.7 billion. If every emerging market needs a bailout as a result of the financial crisis, there won’t be enough to go round.
There is, however, another source of financing that is yet to be talked about, namely, moratoria on bilateral and multilateral debt service. Historically, the multilateral agencies (i.e. World Bank, IMF and African Development Bank-AfDB) are treated as preferred creditors whose debt is non-negotiable. In reality, countries in distress do build up arrears. In terms of substance, a moratorium on repayment translates to the same thing as extending new budget support loans. China, which is now taking the lion’s share of debt service for many countries, could demonstrate that it is indeed a friend of Africa by giving African countries some breathing space on debt repayments.
Economic stimulus measures, and why they may not work
Africans who are following economic developments globally and seeing Western governments rolling out economic “stimulus” measures are wondering whether African governments will be able to do the same. It is worth reiterating the fact that this is an unprecedented economic shock. That Western countries are doing their thing does not mean they’ve got it right. In fact, one may recall that economic pundits predicted that Africa would be the worst hit by the 2007-08 global economic crisis. Early on in the current crisis, none other than Bill Gates said that special attention should be paid to Africa, warning that if the coronavirus spreads here, more than 10 million people could die. The United Nations Secretary-General, Antonio Guterres, has made a similar dire prediction.
I do not mean to downplay the threat, but Mr.Gates seems to have been blindsided by Afropessimism and was not prepared for the fact that his home state in the United States would become one of the epicentres of the pandemic well ahead of Africa. I am not disputing that Gates’s prognosis is wrong, as much as I hope he is wrong. I am pointing out that he, among other Americans, not least the Commander-in-Chief, underestimated the threat to the United States.
Kenya has $10 billion of foreign commercial debt divided equally between Eurobonds and syndicated bank loans. A decade ago, Kenya had no foreign commercial debt. Commercial debt now accounts for a third of the country’s foreign debt.
Until recently, the UK was out on its own pursuing a “herd immunity” strategy that delayed intervention. If the great transatlantic powers can get the public health response wrong should be reason enough to be circumspect about their economic responses as well. Everyone is flying by the seat of their pants.
Consider economic stimulus measures. Economic stimulus measures are of two types: fiscal and monetary. In fiscal measures, the government borrows and spends. In monetary measures, central banks inject money into the economy using open market operations while simultaneously lowering interest rates. Fiscal measures work directly – once the government has spent the money, its in circulation. Monetary measures work indirectly – central banks inject the money into the banking system and hope that businesses and consumers will borrow and spend. We call both of these demand management tools because they increase purchasing power in the economy.
Injecting money into the economy is predicated on supply response, and herein lies the problem with this crisis. First, people who are social distancing or in lockdown are not going to go out to spend. Second, social distancing and lockdown also disrupt supply. For example, commercial aviation is grinding to a halt. Moreover, we don’t know how long this will last. The instinctive reaction of people to economic uncertainty is to save rather than spend, hoard rather than consume, what John Maynard Keynes famously named the “paradox of thrift”.
Unsurprisingly then, Western governments are progressively moving away from generic demand management to social safety net-type interventions. The UK has announced a wage subsidy scheme where the government will pay 80 per cent of the salary of employees who are unable to work if companies keep them employed. That looks uncannily like a suggestion I floated weeks ago – an interest-free lifeline fund to protect jobs (see tweets). There is also a proposal by House Democrats to give cash transfers to middle and low income families, starting with $2,000, and subsequent transfers based on how the crisis unfolds.
Demand management tools are not fit for purpose. In addition to financial relief, Govts should consider a lifeline facility to keep workers on payroll. Depending on how long this goes on, Govts should start thinking in terms of wartime economic mngment i.e central coordination. https://t.co/7yVOCSyOYA
— David Ndii (@DavidNdii) March 16, 2020
Will African governments be able to do this? Obviously, having floated the idea, it follows that I am convinced it can be done – at least on a limited scale. Let’s see how the numbers stack up.
Under normal circumstances, fiscal stimulus usually entails deficit spending to the tune of between 1 and 2 per cent of GDP. Kenya’s current GDP is in the order of Sh10 trillion ($100 billion), so a stimulus would be between Sh100 and Sh200 billion (between $1 billion and $2 billion). The average monthly wage, as reported in the Government’s 2019 Economic Survey report in the formal wage sector was Sh60,000 ($600) in 2018, while the minimum urban monthly wages ranged from Sh7,200 (US$72) to Sh27,000 ($270), with an average of Sh16,800. (Data on wages in the informal sector, which accounts for 85 per cent of the 18.5 million non-farm workforce, are not collected, but if they were, they would look like the gazetted minimum wage figures rather than wages in the formal sector.) The weighted average of the two is Sh23,300, which we can adjust for inflation to Sh25,000 (US$250).
At an average of Sh25,000, a one per cent of GDP jobs lifeline can pay 4 million workers – a fifth of the workforce – for one month. Obviously, we are looking at more than a month, probably three to six months. It would cover 1.3 million for three months and 660,000 workers for six months. These numbers are very significant. And, of course, the lifeline would not have to be 100 per cent of the pay. A 50 per cent lifeline increases the potential coverage to 2.6 million and 1.3 million workers for three and six months, respectively.
Injecting money into the economy is predicated on supply response, and herein lies the problem with this crisis. First, people who are social distancing or in lockdown are not going to go out to spend. Second, social distancing and lockdown also disrupt supply.
Trouble is, Kenya’s budget deficit is already way past the red line. The red line is 5 per cent of GDP. At the onset of the 2007-08 financial crisis, the budget deficit was running at below 3 per cent, which meant that the government had a headroom (referred to as fiscal space) of 2 per cent of GDP before reaching the red line. We are currently operating in the 7 per cent to 8 per cent range.
The deficit in the last financial year was 7.9 per cent. The target for this year was 6.3 per cent, but it’s projected at 7.6 per cent. The difference between 3 per cent and 7 per cent of GDP may not look that big but consider the following: When the deficit was 3 per cent, revenue was 18 per cent of GDP, government was spending 17 per cent more than its income. With revenue now down to 15 per cent, a 7 per cent of GDP deficit means that the government is spending 46 per cent more than its income.
We have been at it for six years. We are already on borrowed time. Already, the government’s domestic borrowing target this financial year has been revised upwards by more than Sh200 billion (US$2 billion), from Sh300 billion ($3 billion) to Sh514 billion ($5.14 billion) to plug in the gap left by planned foreign commercial borrowing of 200 billion ($2 billion) that, for whatever reason, the government has not raised. We also have to take into account that the Kenyan government is taking a hit on the revenue side, so the deficit is widening as it is, unless it cuts spending drastically – and it’s not good at that. An extra one percent of GDP domestic borrowing could just be the straw that breaks the camel’s back.
At an average of Sh25,000, a one per cent of GDP jobs lifeline can pay 4 million workers – a fifth of the workforce – for one month…A 50 per cent lifeline increases the potential coverage to 2.6 million and 1.3 million workers for three and six months, respectively.
Where does that leave us? Well, the prudent thing to do is to finance the lifeline within the existing deficit by re-allocation. The alternative is to go the monetary route – look at how banks can finance it. The most direct route is to allow banks to temporarily trade government bonds for cash with the Central Bank of Kenya in transactions known as repurchase agreements (REPOs). The drawback is that the banks will be exchanging low risk assets for high risk ones, and the non-performing loans (NPLs) ratio is already in alarm bell territory.
We go back to fiscal. All it requires is the political resolve to mothball development projects – after all, budget absorption will also be affected by lockdowns and social distancing. And infrastructure is not that urgent. And we may not require as much as Sh100 billion. My intuition tells me that half that amount – if well-targeted – will make a huge difference.
Africa’s urban sociology
Four years ago, I wrote an op-ed on the urban sociology of Africa, which is enjoying a small revival in the wake of a mass exodus from the city of Nairobi to rural homes. In Kenya, “home” means rural origin; we call urban residences “houses”. The article opened with an anecdote about how the disappearance of the entire population of Brazzaville following the outbreak of political violence in 2007 puzzled the humanitarian relief sector in the UK (where I was at the time) as it was gearing up for an emergency that never was. The frantic search for a displaced population in distress in the environs of Brazzaville was fruitless. The people had simply gone “home”. I wrote:
After a brief hiatus in the fighting following a truce that did not last, the residents began to trickle back carrying the usual rural goodies – bananas, yams, live chicken and so on. The international humanitarian agencies’ initial puzzlement is understandable – the idea of the population of Brussels or Copenhagen doing a vanishing act is inconceivable. [But] in Nairobi, as in Brazzaville, we travel light, and with an exit plan.
The migration in Kenya has already begun. It was inevitable. Many of the small businesses that urban residents rely on – eateries, hair salons and barber shops, metal and furniture workshops, motorcycle taxis – have already cratered, and it is early days yet.
But there is fear that, as most of our old people live in rural areas, retreating there will expose them to the virus. This then underlines the importance of aggressive tracing and testing to establish whether indeed we are still ahead of the curve or it’s a case of under-testing. If the virus has not yet spread, then it is better for those who cannot support themselves in the city to leave sooner rather than later. If we accept that it is impossible to practise effective social distancing in congested urban neighbourhoods, and informal settlements in particular, then surely the best way people can protect themselves is to go home where they have more space. If a person needs to be isolated, most rural homesteads will have a room that can isolate an infected person, or if not, a hut can be constructed in a day.
A tricky thing about the pandemic is that its devastating economic effects come not from its virulence but from its contagiousness – its ability to spread without symptoms, more like HIV than Ebola. Emerging scientific evidence suggests that it has been spreading faster in cold weather, which means that it could oscillate between the Northern and Southern hemispheres for a couple of seasons until global “herd immunity” is achieved. National isolation and social distancing may become the new normal for a while.
How economic globalisation, the North-South development-underdevelopment paradigm, and Africa’s rural-urban socio-economic dynamics emerge from this, only time will tell.
The Coronavirus: The Political Economy of a Pathogen
The coronavirus crisis has thrown into sharp relief the interlocked embrace of globalisation and nationalism and shown the limits of the neo-liberal globalisation that has reigned supreme since the 1980s. The pandemic has at the same time showed up the fecklessness of some political leaders and the incompetence of many governments.
The global coronavirus pandemic has triggered worldwide panic as the numbers of victims explode and economies implode, as physical movement and social interactions wither in lockdowns, as apocalyptic projections of its destructive reach soar, and as unprepared or underprepared national governments and international agencies desperately scramble for solutions.
The pandemic has exposed the daunting deficiencies of public health systems in many countries. It threatens cataclysmic economic wreckage as entire industries, global supply chains, and stock markets collapse under its frightfully unpredictable trajectory. Its social, emotional, and mental toll are as punishing as they are paralysing for multitudes of people increasingly isolated in their homes as the public life of work spaces, travel, entertainment, sports, religious congregations, and other gatherings grind to a halt.
Also being torn asunder are cynical ideological certainties and the political fortunes of national leaders as demands grow for strong and competent governments. The populist revolt against science and experts has received its comeuppance as the deadly costs of pandering to mass ignorance mount. At the same time, the pandemic has shattered the strutting assurance of masters of the universe as they either catch the virus or as it constrains their jet-setting lives and erodes their bulging equity portfolios.
Furthermore, the coronavirus throws into sharp relief the interlocked embrace of globalisation and nationalism, as the pandemic leaps across the world showing no respect for national boundaries, and countries seek to contain it by fortifying national borders. It underscores the limits of both neo-liberal globalisation that has reigned supreme since the 1980s, and populist nationalisms that have bestrode the world since the 2000s, which emerged partly out of the deepening social and economic inequalities spawned by the former.
These are some of the issues I would like to reflect on in this essay, the political economy of the coronavirus pandemic. As historians and social scientists know all too well, any major crisis is always multifaceted in its causes, courses, and consequences. Disease epidemics are no different. In short, understanding the epidemiological dimensions and dynamics of the coronavirus pandemic is as important as analysing its economic, social, and political impact. Moments of crisis always have their fear-mongers and skeptics. The role of progressive public intellectuals is to provide sober analysis.
In the Shadows of 1918-1920
The coronavirus pandemic is the latest and potentially one of the most lethal global pandemics in a long time. One of the world’s deadliest pandemics was the Great Plague of 1346-1351 which ravaged larges parts of Eurasia and Africa. It killed between 75 to 200 million people, and wiped out 30 per cent to 60 per cent of the European population. The plague was caused by fleas carried by rats, underscoring humanity’s vulnerability to the lethal power of small and micro-organisms, notwithstanding the conceit of its mastery over nature. The current pandemic shows that this remains true despite all the technological advances humanity has made since then.
Over a century ago, as World War I came to an end, an influenza epidemic, triggered by a virus transmitted from animals to humans, ravaged the globe. One-third of the world’s population was infected, and it left 50 million people dead. It was the worst pandemic of the 20th century. It was bigger and more lethal than the HIV/AIDS epidemic of the late 20th century. But for a world then traumatised by the horrors of war it seemed to have left a limited impact on global consciousness.
Some health experts fear Covid-19, as the new strain of coronavirus has been named, might rival the influenza epidemic of 1918. But there are those who caution that history is sometimes not kind to moral panics, that similar hysteria was expressed following the outbreaks in the 2000s and 2010s of bouts of bird flu and swine flu, of SARS, MERS and Ebola, each of which was initially projected to kill millions of people. Of course, nobody really knows whether or not the coronavirus pandemic of 2020 will rival that of the influenza pandemic of 1918-1920, but the echoes are unsettling: its mortality rate seems comparable, as is its explosive spread.
The devastating power Covid-19 is wracking and humbling every country, economy, society, and social class, although the pervasive structural and social inscriptions of differentiation still cast their formidable and discriminatory capacities for prevention and survival. In its socioeconomic and political impact alone, Covid-19 has already made history. One lesson from the influenza pandemic that applies to the current coronavirus pandemic is that countries, cities and communities that took early preventive measures fared much better than those that did not.
Since Covid-19 broke out in Wuhan, China, in late December 2019, international and national health organisations and ministries have issued prevention guidelines for individuals and institutions. Most of the recommended measures reflect guidelines issued by the World Health Organization.
But the pandemic is not just about physical health. It is also about mental health. Writing in The Atlantic magazine of March 17, 2020, on how to stay sane during the pandemic one psychotherapist notes, “You can let anxiety consume you, or you can feel the fear and also find joy in ordinary life, even now”. She concludes, “I recommend that all of us pay as much attention to protecting our emotional health as we do to guarding our physical health. A virus can invade our bodies, but we get to decide whether we let it invade our minds”.
A Kenyan psychology professor advises her readers in the Sunday Nation of March 23, 2020, to cultivate a positive mindset. “Take only credible sources of information . . . Don’t consume too much data, it can be overwhelming. You may be in isolation but very noisy within yourself. Learn to relax and to convert your energy into other activities in order to nurture your own mental health . . . Such as gardening, learning a language, doing an online course, painting or read that book. Do the house chores, trim the flowers, paint, do repairs, clean the dust in those corners we always ignore . . . Exercise . . . Talk to someone if you feel terrified, empty, hopeless, and worthless. These are creeping signs of depression. This too will pass: Believe me that there will be an end to this”.
Scramble for Containment
Many governments were caught unprepared or underprepared by the coronavirus pandemic. Some even initially dismissed the threat. This was particularly the case among populist rightwing governments, such as the administrations of President Trump of the United States, Prime Minister Johnson of the United Kingdom, and President Bolsonaro of Brazil. As populists, they had risen to power on a dangerous brew of nationalist and nativist fantasies of reviving national greatness and purity, xenophobia against foreigners, and manufactured hatred for elites and experts.
To rightwing ideologues the coronavirus was a foreign pathogen, a “Chinese virus” according to President Trump and his Republican followers in the United States, that posed no threat to the nation quarantined in its splendid isolation of renewed greatness. Its purported threat was fake news propagated by partisan Democrats, or disgruntled left-wing labour and liberal parties in the case of the United Kingdom and Brazil that had recently been vanquished at the polls.
Such was the obduracy of President Trump that not only did he and his team ignore frantic media reports about the pandemic leaping across the world, but also ominous, classified warnings issued by the U.S. intelligence agencies throughout January and February. Instead, he kept assuring Americans in his deranged twitterstorms that there was little to worry about, that “I think it’s going to work out fine,” that “The Coronavirus is very much under control in the USA”.
Trump’s denialism was echoed by many leaders around the world including in Africa. This delayed taking much-needed preemptive action that would have limited the spread and potential impact of the coronavirus firestorm. In fact, as early as 2012 a report by the Rand Corporation warned that only pandemics were “capable of destroying America’s way of life”. The Obama administration proceeded to establish the National Security Council directorate for global health and security and bio-defense, which the Trump administration closed in 2018. On the whole, global pandemics have generally not been taken seriously by security establishments in many countries preoccupied with conventional wars, terrorism, and the machismo of military hardware.
In the meantime, China, the original epicenter of the pandemic took draconian measures that locked down Wuhan and neighbouring regions, a measure that was initially dismissed by many politicians and pundits in “western democracies” as a frightful and an unacceptable example of Chinese authoritarianism. As the pandemic ravished Italy, which became the coronavirus epicenter in Europe and a major exporter of the disease to several African countries, regional and national lockdowns were embraced as a strategy of containment.
Asian democracies such as South Korea, Japan, Taiwan, and Singapore adopted less coercive and more transparent measures. Already endowed with good public health systems capable of handling major epidemics—which capability was enhanced by the virus epidemics of the 2000s and 2010s—they developed effective and vigilant monitoring systems encompassing early intervention, meticulous contact tracking, mandatory quarantines, social distancing, and border controls.
Various forms of lockdown, some more draconian than others, were soon adopted in many countries and cities around the world. They encompassed the closure of offices, schools and universities, and entertainment and sports venues, as well as banning of international flights and even domestic travel. Large-scale disinfection drives were also increasingly undertaken. The Economist of March 21, 2020 notes in its lead story that China and South Korea have effectively used “technology to administer quarantines and social distancing. China is using apps to certify who is clear of the disease and who is not. Both it and South Korea are using big data and social media to trace infections, alert people of hotspots and round contacts”.
Belatedly, as the pandemic flared in their countries, the skeptics began singing a different tune, although a dwindling minority complained of overreaction. Befitting the grandiosity of populist politicians, they suddenly fancied themselves as great generals in the most ferocious war in a generation. Some commentators found the metaphor of war obscene for its self-aggrandisement for clueless leaders anxious to burnish their tattered reputations and accrue more gravitas and power. For the bombastic, narcissistic, and pathological liar that he is, President Trump sought to change the narrative that he had foreseen the pandemic notwithstanding his earlier dismissals of its seriousness.
His British counterpart, Prime Minister Johnson vainly tried Churchillian impersonation which was met with widespread derision in the media. Each time either of them spoke trying to reassure the public, the more it became clear they were out of their depth, that they did not have the intellectual and political capacity to calm the situation. It was a verdict delivered with painful cruelty by the stock markets that they adore—they fell sharply each time the two gave a press conference and announced half-baked containment measures.
Initially, many of Africa’s inept governments remained blasé about the pandemic even allowing flights to and from China, Italy and other countries with heavy infection rates. Cynical citizens with little trust in their corrupt governments to manage a serious crisis sought comfort in myths peddled on social media about Africa’s immunity because of its sunny weather, the curative potential of some concoctions from disinfectants to pepper soup, the preventive potential of shaving beards, or the protective power of faith and prayer.
But as concerns and outrage from civil society mounted, and opportunities for foreign aid rose, some governments went into rhetorical overdrive that engendered more panic than reassurance. It has increasingly become evident that Africa needs unflinching commitment and massive resources to stem the rising tide of coronavirus infections. According to one commentator in The Sunday Nation of March 22, “It is estimated that the continent would need up to $10.6 billion in unanticipated increases in health spending to curtail the virus from spreading”. He advises the continent to urgently implement the African Continental Free Trade Area, and work with global partners.
Cynical citizens with little trust in their corrupt governments to manage a serious crisis sought comfort in myths peddled on social media
In Kenya, some defiant politicians refused to self-quarantine after coming from coronavirus-stricken countries, churches resisted closing their doors, and traders defied orders to close markets. This forced the government to issue draconian containing measures on March 22, 2020 stipulating that all those who violated quarantine measures would be forcefully quarantined at their own expense, all gatherings at churches, mosques were suspended, weddings were no longer allowed, and funerals would be restricted to 15 family members.
The infodemic of false and misleading information, as the WHO calls it, was of course not confined to Africa. It spread like wildfire around the world. So did coronavirus fraudsters peddling fake information and products to desperate and unwary recipients. In Britain, the National Fraud Intelligence Bureau was forced to issue urgent scam warnings against emails and text messages purporting to be from reputable research and health organisations.
The coronavirus pandemic showed up the fecklessness of some political leaders and the incompetence of many governments. The neo-liberal crusade against “big government” that had triumphed since the turn of the 1980s, suddenly looked threadbare. And so did the populist zealotry against experts and expertise. The valorisation of the politics of gut feelings masquerading as gifted insight and knowledge, suddenly vanished into puffs of ignoble ignorance that endangered the lives of millions of people. People found more solace in the calm pronouncements of professional experts including doctors, epidemiologists, researchers and health officials than loquacious politicians.
Populist leaders like President Trump and Prime Minister Johnson and many others of their ilk had taken vicarious pleasure in denigrating experts and expert knowledge, and decimating national research infrastructures and institutions. Suddenly, at their press conferences they were flanked by trusted medical and scientific professionals and civil servants as they sought to bask in the latter’s reassuring glow. But that could not restore public health infrastructures overnight, severely damaged as they were by indefensible austerity measures and the pro-rich transfers of wealth adopted by their governments.
When the coronavirus pandemic broke out, many countries were unprepared for it. There were severe shortages of testing kits and health care facilities. Many also lacked universal entitlement to healthcare, social safety nets including basic employment rights and unemployment insurance that could mitigate some of the worst effects of the pandemic’s economic impact. All this ensured that the pandemic would unleash mutually reinforcing health and economic crises.
The signs of economic meltdown escalated around the world. Stock markets experienced a volatility that run out of superlatives. In the United States, from early February to March 20, 2020 the Dow Jones Industrial Average fell by about 10,000 points or 35%, while the S&P fell by 32%. In Britain, the FTSE fell by 49% from its peak in earlier in the year, the German GDAXI by 36%, the Hong Kong HSI by 22%, and the Japanese Nikkei by 32%. Trillions of dollars were wiped out. In the United States, the gains made under President Trump vanished and fell to the levels left by his nemesis President Obama, depriving the market-obsessed president of one of his favourite talking points and justifications for re-election.
There are hardly any parallels to a pandemic leading to markets crumbling the way they have following the coronavirus outbreak. They did not do so during the 1918-1920 influenza pandemic, although they fluctuated thereafter. Closer to our times, during the flu pandemic of 1957-1958 the Dow fell about 25per cent, while the SARS and MERS scares of the early 21st century had relatively limited economic impact. Some economic historians warn, however, that the stock market isn’t always a good indicator or predictor of the severity of a pandemic.
The sharp plunge in stock markets reflected a severe economic downturn brought about by the coronavirus pandemic as one industry after another went into a tailspin. The travel, hospitality and leisure industries encompassing airlines, hotels, restaurants, bars, sports, conventions, exhibitions, tourism, and retail were the first to feel the headwinds of the economic slump as people escaped or were coerced into the isolation of their homes. For example, hotel revenues in the United States plummeted by 75 per cent on average, worse than during the Great Recession and the aftermath of the 9/11 terrorist attacks combined.
In the United States, the gains made under President Trump vanished and fell to the levels left by his nemesis President Obama
Other industries soon followed suit as supply chains were scuppered, profits and share prices fell, and offices closed and staff were told to work from home. Manufacturing, construction, and banking have not been spared. Big technology manufacturing has also been affected by factory shutdowns and postponing the launch of new products. Neither was the oil industry safe. With global demand falling, and the price war between Saudi Arabia and Russia escalating, oil prices fell dramatically to $20.3, a fall of 67 per cent since the beginning of 2020. Some predicted the prospect of $5 oil per barrel.
The oil price war threatened to decimate smaller or poorer oil producers from the Gulf states to Nigeria. It also threatened the shale oil industry in the United States because of its high production costs, thereby depriving the country of its newly acquired status as the largest oil producer in the world, to the chagrin of Russia and OPEC. Many of the US shale oil companies face bankruptcy as their production costs are fourteen times higher than Saudi Arabia’s production costs, and they need prices of more than $40 per barrel to cover their direct costs.
Falling oil prices combined with growing concerns about climate change, dented the prospects of several oil exploration and production companies, such as the British company Tullow, which has ambitious projects in Kenya, Uganda, and Ghana. This threatened these countries’ aspirations to join the club of major oil-producing nations. In early March, 2020, one of Tullow’s major investors, Blackrock, the world’s biggest hedge fund with $7 trillion, made it clear it was losing interest in fossil fuel investment.
Such are the disruptions caused by the coronavirus pandemic that 51 per cent of economists polled by the London School of Economics believe “the world faces a major recession, even if COVID-19 kills no more people than seasonal flu. Only 5% said they did not think it would.” According to a survey reported by the World Economic Forum, “The public sees coronavirus as a greater threat to the economy than to their health, new research suggests. Economic rescue measures announced by governments do not appear to be calming concern . . . The majority of people in most countries polled expect to feel a personal financial impact from the coronavirus pandemic, according to the results. Respondents in Vietnam, China, India and Italy show the greatest concern”.
51 per cent of economists polled by the London School of Economics believe the world faces a major recession
Many economies spiraled into recession. The major international financial institutions and development agencies have revised world, regional, and national economic growth prospects for 2020 downwards, sometimes sharply so. Estimates by Frost & Sullivan, a consultancy firm, show that world GDP which grew by 3.5% in 2018 and 2.9% in 2019, will slide to 1.7% if the coronavirus pandemic becomes prolonged and severe, and it might take up to a year or more for the world economy to recover. The OECD predicts that “Global growth could drop to 1.5 per cent in 2020, half the rate projected before the virus outbreak. Recovery much more gradual through 2021”.
The OECD Economic Outlook, Interim Report March 2020 notes,
Growth was weak but stabilising until the coronavirus Covid-19 hit. Restrictions on movement of people, goods and services, and containment measures such as factory closures have cut manufacturing and domestic demand sharply in China. The impact on the rest of the world through business travel and tourism, supply chains, commodities and lower confidence is growing.
It forecasts “Severe, short-lived downturn in China, where GDP growth falls below 5% in 2020 after 6.1% in 2019, but recovering to 6.4% in 2021. In Japan, Korea, Australia, growth also hit hard then gradual recovery. Impact less severe in other economies but still hit by drop in confidence and supply chain disruption”.
Compared to a year earlier, the once buoyant Chinese economy shrank by between 10 and 20 per cent in January and February 2020. The Economist states,
In the first two months of 2020 all major indicators were deeply negative: industrial production fell by 13.5% year-on-year, retail sales by 20.5% and fixed-asset investment by 24.5% . . . The last time China reported an economic contraction was more than four decades ago, at the end of the Cultural Revolution.
In the United States, the recovery and boom from the Great Recession that started in 2009 came to a screeching halt. Some grim predictions project that as businesses shut down and more than 80 million Americans stay penned at home unemployment, which had dropped to a historic low of 3.5 per cent, might skyrocket to 20 per cent. This spells disaster as consumer spending drives 70 per cent of the economy, and 39 per cent of Americans cannot handle an unexpected $400 expense.
This economic bloodletting removes the second boastful pillar of President Trump’s re-election strategy, the robust health of the US economy
Various estimates indicate that in the next three months the economy will shrink by anywhere between 14 and to 30 per cent, ushering in one of America’s fastest and deepest recessions in history. This economic bloodletting removes the second boastful pillar of President Trump’s re-election strategy, the robust health of the US economy.
UNCTAD has added its gloomy assessment for the world economy and emerging economies. Launching its report in early March, the Director of the Division on Globalisation and Development Strategies at UNCTAD noted that,
One ‘Doomsday scenario’ in which the world economy grew at only 0.5 per cent, would involve ‘a $2 trillion hit’ to gross domestic product . . . There’s a degree of anxiety now that’s well beyond the health scares which are very serious and concerning . . . To counter these fears, ‘Governments need to spend at this point in time to prevent the kind of meltdown that could be even more damaging than the one that is likely to take place over the course of the year’, Mr. Kozul-Wright insisted.
Turning to Europe and the Eurozone, Mr. Kozul-Wright noted that its economy had already been performing ‘extremely badly towards the end of 2019’ . . . It was ‘almost certain to go into recession over the coming months; and the German economy is particularly fragile, but the Italian economy and other parts of the European periphery are also facing very serious stresses right now as a consequence of trends over (the last few) days’.
The UNCTAD announcement continues,
So-called Least Developed Countries, whose economies are driven by the sale of raw materials, will not be spared either. ‘Heavily-indebted developing countries, particularly commodity exporters, face a particular threat’, thanks to weaker export returns linked to a stronger US dollar, Mr. Kozul-Wright maintained. ‘The likelihood of a stronger dollar as investors seek safe-havens for their money, and the almost certain rise in commodity prices as the global economy slows down, means that commodity exporters are particularly vulnerable’.
Africa will not be spared. According to Fitch Solutions, a consultancy firm,
We have revised down our Sub-Saharan Africa (SSA) growth forecast to 1.9% in 2020, from 2.1% previously, reflecting macroeconomic risks arising from moderating oil prices and the global spread of Covid-19. While the number of confirmed Covid-19 cases in SSA remains low thus far, African markets remain vulnerable to deteriorating risk sentiment, tightening financial conditions and slowing growth in key trade partners. The sharp decline in global oil prices resulting from the failure of OPEC+ to reach agreement on additional production cutbacks will undermine growth and export earnings in the continent’s main oil producers, notably Nigeria, Angola and South Sudan.
In Kenya, there were widespread fears that the coronavirus pandemic would bring the national airline carrier and other companies in the lucrative tourism industry to their knees. Similarly affected will be the critical agricultural and horticultural export industry. Aggravating the sharp economic downturns, some commentators lamented, is widespread corruption. Domestically, the ubiquitous matatu transport industry is groaning under new regulations limiting the number of passengers.
The economy was already fragile prior to the coronavirus crisis. In the words of one commentator in the Sunday Standard of March 23, 2020,
Companies were laying off, malls were already empty even before the outbreak and shops and kiosks and mama mbogas were recording the lowest sales in years. Matters are not helped by the fact that our e-commerce (purchase and delivery) does not account for much due to poor infrastructure and low trust levels.
Another commentator in the same paper on March 17, 2020 wrote, “It’s a matter of time before bleeding economy goes into coma”. He outlined the depressing litany: increased cost of living, gutting of Kenya’s export market, discouragement of the use of hard cash, producers grappling with limited supply, a bleeding stock market, irrational investor fears, and moratorium on foreign travel.
As the crisis intensified, international financial institutions and development agencies loosened the spigots of financial support. On March 12, 2020 the IMF announced,
In the event of a severe downturn triggered by the coronavirus, we estimate the Fund could provide up to US$50 billion in emergency financing to fund emerging and developing countries’ initial response. Low-income countries could benefit from about US$10 billion of this amount, largely on concessional terms. Beyond the immediate emergency, members can also request a new loan—drawing on the IMF’s war chest of around US$1 trillion in quota and borrowed resources—and current borrowers can top up their ongoing lending arrangements.
For its part, the World Bank announced on March 17 that,
The World Bank and IFC’s Boards of Directors approved today an increased $14 billion package of fast-track financing to assist companies and countries in their efforts to prevent, detect and respond to the rapid spread of COVID-19. The package will strengthen national systems for public health preparedness, including for disease containment, diagnosis, and treatment, and support the private sector.
On March 19, the European Central Bank announced,
As a result, the ECB’s Governing Council announced on Wednesday a new Pandemic Emergency Purchase Programme with an envelope of €750 billion until the end of the year, in addition to the €120 billion we decided on 12 March. Together this amounts to 7.3% of euro area GDP. The programme is temporary and designed to address the unprecedented situation our monetary union is facing. It is available to all jurisdictions and will remain in place until we assess that the coronavirus crisis phase is over.
Altogether, The Economist states,
A crude estimate for America, Germany, Britain, France and Italy, including spending pledges, tax cuts, central bank cash injections and loan guarantees, amounts to $7.4trn, or 23% of GDP . . . A huge array of policies is on offer, from holidays on mortgage payments to bail-outs of Paris cafés. Meanwhile, orthodox stimulus tools may not work well. Interest rates in the rich world are near zero, depriving central bank of their main lever . . . What to do? An economic plan needs to target two groups: households and companies.
Some of the regional development banks also announced major infusions of funds to contain the pandemic. On March 18, “The Asian Development Bank (ADB) today announced a $6.5 billion initial package to address the immediate needs of its developing member countries (DMCs) as they respond to the novel coronavirus (COVID-19) pandemic”.
On the same day, the African Development Bank announced “bold measures to curb coronavirus”, but this largely consisted of “health and safety measures to help prevent the spread of the coronavirus in countries where it has a presence, including its headquarters in Abidjan. The measures include telecommuting, video conferencing in lieu of physical meetings, the suspension of visits to Bank buildings, and the cancellation of all travel, meetings, and conferences, until further notice”. No actual financial support was stipulated in the announcement.
Trading Ideological Places
As the economic impact of the coronavirus pandemic escalated, demands for government support intensified from employers, employees and trade unions. The pandemic is wreaking particular havoc among poor workers who can hardly manage in “normal” times. As noted above, across Kenya jobs were already being lost before the coronavirus epidemic. Those in the informal economy are exceptionally vulnerable because of the extensive lockdown the government announced on March 22, 2020.
Those earning a precarious living in the gig economy face special hurdles in making themselves heard and receiving support. With the lockdown of cities, couriers become even more essential to deliver food and other supplies, but they lack employment rights, so that many cannot afford self-isolation if they become sick. Customer service workers at airports and in supermarkets have sometimes been at the receiving end of pandemonium and the anxieties of irate customers.
The pandemic is wreaking particular havoc among poor workers who can hardly manage in “normal” times
The pandemic has helped bring political perspective to national and international preoccupations that suddenly look petty in hindsight. For example, as one author puts it in a story in The Atlantic of March 11, 2020, “It’s not hard to feel like the coronavirus has exposed the utter smallness of Brexit . . . Ultimately, Brexit is not a matter of life and death literally or economically. The coronavirus, meanwhile, is killing people and perhaps many businesses”.
The same could be said of many trivial political squabbles in other countries. In the United States, one observer notes in The Atlantic of March 19, 2020,
In the absence of meaningful national leadership, Americans across the country are making their own decisions for our collective well-being. You’re seeing it in small stores deciding on their own to close; you’re seeing it in restaurants evolving without government decree to offer curbside pickup or offer delivery for the first time; you’re seeing it in the offices that closed long before official guidance arrived.
The author concludes poignantly, “The most isolating thing most of us have ever done is, ironically, almost surely the most collective experience we’ve ever had in our lifetimes”. And I can attest that I have seen this spirit of cooperation and collaboration on my own campus, among faculty, staff, and students. But the pandemic also raises questions about how effectively democracy can be upheld under the coronavirus lockdowns. Might desperate despots in some countries try to use the crisis to postpone elections?
Also upended by the coronavirus pandemic are traditional ideological polarities. Right-wing governments are competing with left-wing governments or opposition liberal legislatures as in the United States to craft “big government” mitigation packages. Many are borrowing monetary and fiscal measures from the Great Recession playbook, some of which they resisted when they were in opposition or not yet in office.
In terms of monetary policy, several central banks have cut interest rates. On March 15, 2020, the US Federal Reserve cut the rate to near zero in a coordinated move with the central banks of Japan, Australia and New Zealand. The Fed also announced measures to shore up financial markets including a package of $700 billion for asset purchase and a credit facility for commercial banks. Three days later, as noted above, the European Central Bank launched a €750 billion Pandemic Emergency Purchase Programme. These measures failed to assure the markets which continued to plummet.
The pandemic has helped bring political perspective to national and international preoccupations that suddenly look petty in hindsight
As for fiscal policy, several governments announced radical spending measures. On 20 March, the UK announced that the government would pay up to 80 per cent of the wages of employees across the country sent home as businesses shut their doors as part of the drastic coronavirus containment strategy. This followed the example of the Danish government that had earlier pledged to cover 75 per cent of employees’ salaries for firms that agreed not to cut staff.
In the United States, Congress began working on a $1 trillion economic relief programme, later raised to $1.8 trillion. The negotiations between the two parties over the proposed stimulus bill proved bitterly contentious. For President Trump and Republicans it was a bitter pill to swallow, given their antipathy to “big government”. It marked the fall of another ideological pillar of Trumpism and Republicanism. For some, the demise of these pillars marks the end of the Trump presidency, which has been exposed for its deadly incompetence, autocratic political culture, and aversion to truth and transparency. We will of course only know for sure in November 2020.
Might desperate despots in some countries try to use the crisis to postpone elections?
In Kenya employers, workers, unions and analysts have implored the government to undertake drastic measures to boost the economy by providing bailouts, tax incentives and rebates, and social safety nets, as well as increasing government spending. Demands have been made to banks to extend credit to the private sector and to the Central Bank to lower or even freeze interest rates for six months. The Sunday Nation of March 22 reported pay cuts were looming for workers as firms struggled to keep afloat, and that the government had scrambled a war chest of Sh140 billion to shore up the economy and avert a recession.
Home isolation is recommended by epidemiologists as a critical means of what they call flattening the curve of the pandemic. Its economic impact is well understood, less so its psychological and emotional impact. While imperative, social isolation might exacerbate the growing loneliness epidemic as some call it, especially in the developed countries.
According to an article in The Atlantic magazine of March 10, 2020, the loneliness epidemic is becoming a serious health care crisis.
Research has shown that loneliness and social isolation can be as damaging to physical health as smoking 15 cigarettes a day. A lack of social relationships is an enormous risk factor for death, increasing the likelihood of mortality by 26 percent. A major study found that, when compared with people with weak social ties, people who enjoyed meaningful relationships were 50 percent more likely to survive over time.
The problem of loneliness is often thought to be prevalent among older people, but in countries such as the United States, Japan, Australia, New Zealand, and the United Kingdom, “The problem is especially acute among young adults ages 18 to 22”. Research shows that the feeling of loneliness is not a reflection of physical isolation, but of the meaning and depth of one’s social engagements. Among the Millennial and Gen Z generations loneliness is exacerbated by social media.
Several studies have pointed out that social media may be reinforcing social disconnection, which is at the root of loneliness. This is because while social media has facilitated instant communication and made people more densely connected than ever, it offers a poor substitute for the intimate communication and dense and meaningful interactions humans crave and get from real friends and family. It fosters shallow and superficial connections, surrogate and even fake friendships, and narcissistic and exhibitionist sociability.
Loneliness should of course not be confused with solitude. Loneliness can also not be attributed solely to external conditions as it is often rooted in one’s psychological state. But the density and quality of social interactions matters. The current loneliness epidemic reflects the irony of a vicious cycle, a nexus of triple impulses: in cultures and sensibilities of self-absorption and self-invention, some people invite or choose loneliness either as a marker of self-sufficiency or social success, while the Internet makes it possible for people to be lonely, and lonely people tend to be more attracted to the Internet.
Among the Millennial and Gen Z generations loneliness is exacerbated by social media
But technology can also help mitigate social distancing. To quote one author writing in The Atlantic on March 14, 2020, “As more people employers and schools encourage people to stay home, people across the country find themselves video-chatting more than they usually might: going to meetings on Zoom, catching up with clients on Skype, FaceTime with therapists, even hosting virtual bar mitzvahs”. Jointly playing video games, watching streaming entertainment, or having virtual dinner parties also opens bonding opportunities.
Besides the growth and consumption of modern media and its disruptive and isolating technologies, loneliness is being reinforced by structural forces including the spread of the nuclear family, an invention that even in the United States has a short history as a social formation. This is evident in sociological studies and demonstrated in the lead story in the March 2020 edition of The Atlantic.
The article shows that for much of American history people lived in extended clans and families, whose great strength was their resilience and their role as a socialising force. The decline of multigenerational families dates to the development of an industrial economy and reached its apogee after World War II between 1950 and 1975, when it all began falling apart, again due to broader structural forces.
One doesn’t have to agree with the author’s analysis of what led to the profound changes in family structure. Certainly, women did not benefit from the older extended family structures, which were resolutely patriarchal. But it is a fact that currently, more people live alone in the United States—and in many other countries including those in the developing world—than ever before. The author stresses, “The period when the nuclear family flourished was not normal. It was a freakish historical moment when all of society conspired to obscure its essential fragility”.
He continues, “For many people, the era of the nuclear family has been a catastrophe. All forms of inequality are cruel, but family inequality may be the cruelest. It damages the heart”. He urges society “to figure out better ways to live together”. The question is: what will be the impact of the social distancing demanded by the coronavirus pandemic on the loneliness epidemic and the prospects of developing new and more fulfilling ways of living together?
Coronavirus Hegemonic Rivalries
At the beginning of the coronavirus outbreak, China bore the brunt of being both the victims and the victimised. The rest of the world feared the contagion’s spread from China and before long the disease did spread to other Asian countries such as South Korea, Taiwan, Singapore, and Iran. This triggered anti-Chinese and anti-Asian racism in Europe, North America, and even Africa.
For many Africans, it was a source of perverse relief that the coronavirus had not originated on the continent. Many wondered how Africa and Africans would have been portrayed and treated given the long history, in the western and global imaginaries, of pathologising African cultures, societies, and bodies as diseased embodiments of sub-humanity.
Disease breeds xenophobia, the irrational fear of the “other”. Commenting on the influenza pandemic in The Wall Street Journal, one scholar reminds us, “As the flu spread in 1918, many communities found scapegoats. Chileans blamed the poor, Senegalese blamed Brazilians, Brazilians blamed the Germans, Iranians blamed the British, and so on”. One key lesson is that to combat pandemics global cooperation is essential. Unfortunately, that lesson seems to be ignored by some governments in the current pandemic, although like in other pandemics, good Samaritans also abound.
For many Africans, it was a source perverse relief that the coronavirus had not originated on the continent
As China, South Korea, and Japan gradually contained the spread of the disease, and Italy and other European countries turned into its epicenter, and as the contagion began surging in the United States, the tables turned. While the Asian democracies largely managed to contain the coronavirus through less coercive and more transparent ways, it is China that took centre-stage in the global narrative. As would be expected in a world of intense hegemonic rivalries between the United States and China, the coronavirus pandemic has become weaponised in the two countries’ superpower rivalry.
On March 19, 2020, China marked a milestone since the outbreak of the coronavirus when it was announced that there were no new domestic cases; the 34 new cases identified that day were all brought in by people coming from abroad. An article in the New York Times of March 19, 2020, reports,
Across Asia, travellers from Europe and the United States are being barred or forced into quarantine. Gyms, private clinics and restaurants in Hong Kong warn them to stay away. Even Chinese parents who proudly sent their children to study in New York or London are now mailing them masks and sanitizer or rushing them home on flights that can cost $25,000.
The Asian democracies largely managed to contain the coronavirus through less coercive and more transparent ways
Even before this turning point, as coronavirus cases in China declined, the country began projecting itself as a heroic model of containment. It anxiously sought to furbish its once battered image by exporting medical equipment, experts, and other forms of humanitarian assistance. Such is the new-found conceit of China that, to Trump’s racist casting of the “China virus” some misguided Chinese nationalists falsely charge that the coronavirus started with American troops, and scornfully disparage the United States for its apparently slow and chaotic containment efforts.
Another article in The New York Times of March 18, 2020, captures China’s strategy for recasting its global image.
From Japan to Iraq, Spain to Peru, it has provided or pledged humanitarian assistance in the form of donations or medical expertise — an aid blitz that is giving China the chance to reposition itself not as the authoritarian incubator of a pandemic but as a responsible global leader at a moment of worldwide crisis. In doing so, it has stepped into a role that the West once dominated in times of natural disaster or public health emergency, and that President Trump has increasingly ceded in his ‘America First’ retreat from international engagement.
The story continues,
Now, the global failures in confronting the pandemic from Europe to the United States have given the Chinese leadership a platform to prove its model works — and potentially gain some lasting geopolitical currency. As it has done in the past, the Chinese state is using its extensive tools and deep pockets to build partnerships around the world, relying on trade, investments and, in this case, an advantageous position as the world’s largest maker of medicines and protective masks . . . On Wednesday, China said it would provide two million surgical masks, 200,000 advanced masks and 50,000 testing kits to Europe . . . One of China’s leading entrepreneurs, Jack Ma, offered to donate 500,000 tests and one million masks to the United States, where hospitals are facing shortages.
Some analysts argue that the coronavirus pandemic is accelerating the decoupling of the United States from China that began with President Trump’s trade war launched in 2018. American hawks see the pandemic as bolstering their argument that China’s dominance of certain global supply chains including some medical supplies and pharmaceutical ingredients poses a systemic risk to the American economy. Many others believe Trump’s “America First” not only damaged the country’s standing and its preparedness to deal with the pandemic, but also to create the international solidarity required for its containment and control.
In the words of one author in The Atlantic of March 15, 2020,
Like Japan in the mid-1800s, the United States now faces a crisis that disproves everything the country believes about itself . . . The United States, long accustomed to thinking of itself as the best, most efficient, and most technologically advanced society in the world, is about to be proved an unclothed emperor. When human life is in peril, we are not as good as Singapore, as South Korea, as Germany.
Some commentators even go further, contending that the pandemic is facilitating the process of de-globalisation more generally as countries not only lock themselves in national enclosures to protect themselves, but seek to become more economically self-sufficient. It is important to note that throughout history, there have been waves and retreats of globalisation. The globalisation of the late 19th century, which was characterised by massive migrations, growth of international trade, and expansion of global production chains with the emergence of modern multinational and transnational corporations, retreated in the inferno of World War I and the Great Depression.
The globalisation of the late 20th century, engendered by the emergence of new information and communication technologies and value chains, the rise of emerging economies as serious players in the world system, among other factors, had already started fraying by the time of the Great Recession. The latter pried open not only the deep inequalities that neo-liberal globalisation had engendered, but also gave vent to a crescendo of nationalist and populist backlashes.
Ironically, the coronavirus pandemic is also throwing into sharp relief the bankruptcy of populist nationalism. It underscores global interconnectedness, that pathogens do not respect our imaginary communities of nation-states, that the ties that bind humanity are thicker than the threads of separation.
Universities Go Online
The coronavirus pandemic has negatively impacted many industries and sectors, including education, following the closure of schools, colleges and universities. However, fear of crowding and lockdowns has also boosted online industries ranging from e-commerce and food delivery to online entertainment and gaming, to cloud solutions for business continuity, to e-health and e-learning.
The coronavirus pandemic is likely to leave a lasting impact on the growth of e-work or telecommuting, and other online-mediated business practices. Before the pandemic the gig economy was already a growing part of many economies, so were e-health and e-learning.
According to the British Guardian newspaper of March 6, 2020, General practitioners (GPs) have been “told to switch to digital consultations to combat Covid-19”. The story elaborates,
In a significant policy change, NHS bosses want England’s 7,000 GP surgeries to start conducting as many remote consultations as soon as possible, replacing patient visits with phone, video, online or text contact. They want to reduce the risk of someone infected with Covid-19 turning up at a surgery and free GPs to deal with the extra workload created by the virus . . . The approach could affect many of the 340m appointments a year with GPs and other practice staff, only 1% of which are currently carried out by video, such as Skype.
Another story in the same paper also notes that supermarkets in Britain have been “asked to boost deliveries for coronavirus self-isolation”.
The educational sector has been one of the most affected by the coronavirus pandemic as the closure of schools and universities has often been adopted by many governments as the first line of defense. It could be argued that higher education institutions have even taken the lead in managing the pandemic in three major ways: shifting instruction online, conducting research on the coronavirus and its multiple impacts, and advising public policy.
Ever since the crisis broke out, I’ve been following the multiple threats it poses to various sectors especially higher education, avidly devouring the academic media including The Chronicle of a higher Education, Inside Higher Education, University Business, Times Higher Education, and University World News, just to mention a few.
Ironically, the coronavirus pandemic is also throwing into sharp relief the bankruptcy of populist nationalism
These papers and magazines alerted me early, as a university administrator, to the need to develop early coronavirus planning in my own institution. A sample of the issues discussed in the numerous articles can be found in the following articles in The Chronicle of a higher Education (see textbox below).
Clearly, if these fifty articles from one higher education magazine are any guide, the higher education sector has been giving a lot of thought to the opportunities and challenges presented by the coronavirus pandemic. Some prognosticate that higher education will fundamentally change. An article in the The New York Times of March 18, 2020 hopes that “One positive outcome from the current crisis would be for academic elites to forgo their presumption that online learning is a second-rate or third-rate substitute for in-person delivery”. There will be some impact, but of course, only time will tell the scale of that impact.
Certainly, at my university we’ve learned invaluable lessons from the sudden switch to learning online using various platforms including Blackboard, our learning management system, Zoom, BlueJeans, Skype, not to mention email and social media such as WhatsApp. This experience is likely to be incorporated into the instructional pedagogies of our faculty.
But history also tells us that old systems often reassert themselves after a crisis, at the same time as they incorporate some changes brought by responses to the crisis. As the author of the article on “7 Takeaways” (see textbox below) puts it, “Many forces exerted pressure on the traditional four-year, bricks-and-mortar, face-to-face campus experience before the coronavirus, and they’ll still be there when the virus is conquered or goes dormant”.
It is likely that at many universities previously averse to online teaching and learning, online instructional tools and platforms will be incorporated more widely, creating a mosaic of face-to-face learning, blended learning, and online learning.
Whither the Future
Moments of profound crisis such as the one engendered by the coronavirus pandemic attract soothsayers and futurists. The American magazine, Politico, invited some three dozen thinkers to prognosticate on the long-term impact of the pandemic. They all offer intriguing reflections. For community life, some suggest the personal will become dangerous, a new kind of patriotism will emerge, polarisation will decline, faith in serious experts will return, there will be less individualism, changes in religious worship will occur, as well as the rise of new forms of reform.
The coronavirus pandemic is likely to leave a lasting impact on the growth of e-work or telecommuting, and other online-mediated business practices
As for technology, they suggest regulatory barriers to online tools will fall, healthier digital lifestyles will emerge, there will be a boon for virtual reality, the rise of telemedicine, provision of stronger medical care, government will become Big Pharma, and science will reign again. With reference to government, they predict Congress will finally go digital, big government will make a comeback, government service will regain its cachet, there will be a new civic federalism, revived trust in institutions, the rules we live by won’t all apply, and they urge us to expect a political uprising.
In terms of elections, they foresee electronic voting going mainstream, Election Day will become Election Month, and voting by mail will become the norm. For the global economy, they forecast that more restraints will be placed on mass consumption, stronger domestic supply chains will grow, and the inequality gap will widen. As for lifestyle, there will be a hunger for diversion, less communal dining, a revival of parks, a change in our understanding of “change”, and the tyranny of habit no more.
In truth, no one really knows for sure.
- American Colleges Seek to Develop Coronavirus Response, Abroad and at Home, January 28, 2020. Focuses on limiting travel to China and preparing campus health facilities.
- Coronavirus Is Prompting Alarm on American Campuses. Anti-Asian Discrimination Could Do More Harm. February 5, 2020. Focuses curbing anti-Asian xenophobia and racism on campuses.
- How Much Could the Coronavirus Hurt Chinese Enrollments? February 20, 2020. Focuses on the possible impact of the coronavirus on Chinese enrollments the largest source of international students in American universities.
- Colleges Brace for More-Widespread Outbreak of Coronavirus, February 26, 2020. Focuses on universities assembling campuswide emergency-response committees, preparing communications plans, cautioning students to use preventive health measures, and even preparing for possible college closures.
- Colleges Pull Back From Italy and South Korea as Coronavirus Spreads. February 26, 2020. Self-explanatory.
- An Admissions Bet Goes Bust: For colleges that gambled on international enrollment, now what? March 1, 2020. Focuses on the dire financial implications of the collapse in the international student market because of the coronavirus crisis.
- The Coronavirus Is Upending Higher Ed. Here Are the Latest Developments. March 3, 2020. Focuses on universities increasingly moving classes online, asking students to leave campus, lobbying for stimulus package from government, imposing travel restrictions, and worrying about future enrollments.
- CDC Warns Colleges to ‘Consider’ Canceling Study-Abroad Trips. March 5, 2020. Self-explanatory.
- Enrollment Headaches From Coronavirus Are Many. They Won’t Be Relieved Soon. March 5, 2020. Focuses on the financial implications of declining prospects for the recruitment of international students.
- The Face of Face-Touching Research Says, ‘It’s Quite Frightening’. March 5, 2020. Highlights research on the difficulties for people not to touch their faces, one of the preventive guidelines against the coronavirus.
- U. of Washington Cancels In-Person Classes, Becoming First Major U.S. Institution to Do So Amid Coronavirus Fears. March 6, 2020. Self-explanatory.
- How Do You Quarantine for Coronavirus on a College Campus? March 6, 2020. Provides guidelines on who should be quarantined, what kind of housing should be provided for quarantined students, the supplies they need, and what to when students fall ill.
- As Coronavirus Spreads, the Decision to Move Classes Online Is the First Step. What Comes Next? March 6, 2020. Provides advice on making the transition to online classes.
- With Coronavirus Keeping Them in U.S., International Students Face Uncertainty. So Do Their Colleges. March 6, 2020. Provides guidelines on how to help with the travel, visa, financial and emotional needs of international students.
- Going Online in a Hurry: What to Do and Where to Start. March 9, 2020. Provides guidelines on how to prepare for course online assignments, assessment, examinations, course materials, instruction, and communication with students quickly.
- Will Coronavirus Cancel Your Conference? March 9, 2020. Self-explanatory.
- What ‘Middle’ Administrators Can Do to Help in the Coronavirus Crisis. March 10, 2020. Provides advice to middle managers in universities on how to community with their people, be more responsive and available than usual, convene their own crisis response teams, and keeping relevant campus authorities informed of major problems in your unit.
- Communicating With Parents Can Be Tricky — Especially When It Comes to Coronavirus. March 10, 2020. Provides advice on how to provide updates to parents some of who might oppose the closure of campus.
- Are Colleges Prepared to Move All of Their Classes Online? March 10, 2020. Notes that this is a huge experiment as many institutions, faculty members, and even students have little experience in online learning and provides some guidelines.
- Why Coronavirus Looks Like a ‘Black Swan’ Moment for Higher Ed. March 10, 2020. Offers reflections on the likely impact of the move to online teaching in terms of prompt universities to stop distinguishing between online and classroom programs.
- Teaching Remotely While Quarantined in China. A neophyte learns how to teach online. March, 11, 2020. A fascinating personal story by a faculty member of his experience with remote teaching while living under strict social isolation, which has gone better than he expected.
- When Coronavirus Closes Colleges, Some Students Lose Hot Meals, Health Care, and a Place to Sleep. March 11, 2020. On the various social hardships campus closures bring to some vulnerable students.
- How to Make Your Online Pivot Less Brutal. March 12, 2020. Offers advice that it’s OK to not know what you’re doing and seek help, keeping it as simple and accessible as you can, expect challenges and adjust.
- Preparing for Emergency Online Teaching. March 12, 2020. Provides resources guides for teaching online.
- Academe’s Coronavirus Shock Doctrine. March 12, 2020. Discusses the added pressures facing faculty because of the sudden conversion to online teaching.
- Shock, Fear, and Fatalism: As Coronavirus Prompts Colleges to Close, Students Grapple With Uncertainty. March 12, 2020. Reports how college students are reacting to campus closures with shock, uncertainty, sadness, and, in some cases, devil-may-care fatalism.
- As the Coronavirus Scrambles Colleges’ Finances, Leaders Hope for the Best and Plan for the Worst. March 12, 2020. Reflects on the likely disruptions on university finances from reduced enrollments and donations.
- What About the Health of Staff Members? March 13, 2020. Discusses how best to ensure staff continue to be healthy.
- As Coronavirus Drives Students From Campuses, What Happens to the Workers Who Feed Them? March 13, 2020. Discusses the challenges of maintaining non-essential staff on payroll during prolonged campus closure.
- 2020: The Year That Shredded the Admissions Calendar. March 15, 2020. Self-explanatory.
- How to Lead in a Crisis. March 16. Insightful advice from the former President of Tulane University during Hurricane Katrina.
- Colleges Emptied Dorms Amid Coronavirus Fears. What Can They Do About Off-Campus Housing? March 16, 2020. Reports on how some institutions have taken a more aggressive approach to limiting the spread of the virus in off-campus housing.
- How to Quickly (and Safely) Move a Lab Course Online. March 17, 2020. The author discusses his positive experiences to move a lab course quickly online and still meet his learning objectives through lab kits, virtual labs and simulations.
- University Labs Head to the Front Lines of Coronavirus Containment. March 17, 2020. Discusses how university medical centers have taken the lead in coronavirus research and due to the national shortage of testing kits used tests of their own design to begin screening patients.
- Hounded Out of U.S., Scientist Invents Fast Coronavirus Test in China. March 18, 2020. An intriguing story of how the US’s crackdown on scholars with ties to China has triggered a reverse brain drain of Chinese-American scholars to China inadvertently promoting China’s ambitious drive to attract top talent under its Thousand Talent program. It features a scholar and his team that are leading the race to develop coronavirus treatment.
- Coronavirus Crisis Underscores the Traits of a Resilient College. March 18, 2020. Discusses the qualities of resilient institutions including effective communication, management of cash flow, and investment in electronic infrastructure.
- Coronavirus Creates Challenges for Students Returning From Abroad. March 18, 2020. Self-explanatory.
- As Coronavirus Spreads, Universities Stall Their Research to Keep Human Subjects Safe. March 18, 2020. Self-explanatory.
- The Covid-19 Crisis Is Widening the Gap Between Secure and Insecure Instructors. March 18, 2020. Self-explanatory.
- Here’s Why More Colleges Are Extending Deposit Deadlines — and Why Some Aren’t. March 18, 2020. Discusses how some universities are changing their admission processes.
- How to Help Students Keep Learning Through a Disruption. March 18, 2020. Provides guidelines on how to keep students engaged in learning and support instructors throughout the crisis.
- As Classrooms Go Virtual, What About Campus-Leadership Searches? March 19, 2020. Discusses how senior university leadership searches are being affected and ways to handle the situation by reconsidering the steps, migrating to technology, and staying in touch with candidates.
- If Coronavirus Patients Overwhelm Hospitals, These Colleges Are Offering Their Dorms. March 19, 2020. Discusses how some universities are offering to donate their empty dorms for use by local hospitals.
- As Professors Scramble to Adjust to the Coronavirus Crisis, the Tenure Clock Still Ticks. March 19, 2020. Discusses how at many universities junior faculty remain under pressure to meet the tenure timelines despite the various institutional disruptions.
- ‘The Worst-Case Scenario’: What Financial Disclosures Tell Us About Coronavirus’s Strain on Colleges So Far. March 19, 2020. Reports the financial straights facing many universities and that Moody’s Investors Service issued a bleak forecast this week for American higher education.
- As the Coronavirus Forces Faculty Online, It’s ‘Like Drinking Out of a Firehose’. March 20, 2020. Recorded video interviews with four selected instructors by The Chronicle to collect their thoughts on how they are managing the sudden change.
- A Coronavirus Stimulus Plan Is Coming. How Will Higher Education Figure In? March 20, 2020. The article wonders how universities will fare under the massive stimulus package under negotiation in the US Congress. It notes “Nearly a dozen higher-education associations have also asked lawmakers for about $50 billion in federal assistance to help colleges and students stay afloat” and an additional $13 billion for research labs.
- Covid-19 Has Forced Higher Ed to Pivot to Online Learning. Here Are 7 Takeaways So Far. March 20, 2020. The takeaways include the fact that “What most colleges are doing right now is not online education,” “Many of the tools were already at hand,” “The pivot can be surprisingly cheap,” “This is your wake-up call,” The pandemic could change education delivery forever…”, “… but it probably won’t”
- ‘Nobody Signed Up for This’: One Professor’s Guidelines for an Interrupted Semester. March 20, 2020. An interesting account on how one faculty changed his syllabus and communicated with his students.
- The Coronavirus Has Pushed Courses Online. Professors Are Trying Hard to Keep Up. March 20, 2020. Makes many of the same observations noted above.
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