Are we there yet?
A few days ago one of my closest friends asked me, “how would you describe the state of the world now in terms of the road to recovery?”
I took her question both figuratively and literally and I responded with the best analogy I could think of:
“Imagine a mother and her son in the car together driving.
The son asks, mom are we there yet?
The mom replies, I don’t know son.
The son then asks, why don’t you know mom? we know where we want to go.
She quietly pulls over the car, looks back at her son and says, yes we know where we want to go but we have never been on this road before.”
My friend then quipped, “yeah nice story, but we have had pandemics before.” And she was right we have had pandemics before:
The Black Death, Year 1334-1350, 30- 50 million deaths
The Modern Plague, Year 1860-1903, 10 million deaths
The Russian Flu, Year 1889-1890, 1 million deaths
The Spanish Flu, Year 1918-1919, 50-100 million deaths
The Asian Flu , Year 1956-1958, 2 million deaths
The Hong Kong Flu, Year 1968-1969, 1 million deaths
HIV/AIDS, Year 1981-present, 32 million deaths
SARS, Year 2003, 774 deaths
Ebola , 2014, 11 thousand deaths
AND NOW the Covid 19 - Corona Virus. Status: ongoing - over 178 thousand deaths.
At a glance, these stats certainly make the impact of Corona virus look quite tepid in comparison to other pandemics. And my friend is right, we have had pandemics before; However, there are a few things that put us in uncharted territory - and on a road where we know where we want to go but unsure of how to get there.
This pandemic was first declared on March 11th 2020 by the World Health Organisation. At that time the virus had hit 114 countries, with 118 thousand cases and just over four thousand deaths. What a difference a few short weeks has made. Let That Sink IN! This virus is deadly and has everyone very afraid. The fear and extreme sensitivity towards it is due to living in an age where we all thought we had eliminated this type of global threat. Our society has grown more intolerant to wars; has taken comfort in the global vaccination programmes which have eliminated threats like small pox and measles and we now rarely see images of mass starvation in the media. Many of us thought we had eliminated these kinds of threats.
We have also been drinking from the same global supply of knowledge. The rise of Social media has led to increased and in many cases, unfiltered sharing. The unbridled access to information means we have more information but some may argue that it has also led to the rise of less individual analysis. Ready-made opinions are now found widely all over social media and these opinions are as infectious as the virus. Before social media, we may have gone through more individual thought process related to our own circumstances and perspectives. Now we scour our timelines; look for an opinion; read the comments and click like! Just like that....Opinion formed! We have in many respects become more reliant on group-think and less on our own instincts and observations.
Never before has a virus caused us to shut down the global economy. Economies are usually negatively affected by recessions and later depressions which result from a slump in demand, an over supply or financial miscalculations/malfeasance. This current economic state we have found ourselves in, is unprecedented. Paul Krugman writes in the New York Times, “we’re going into the economic equivalent of a medically induced coma, in which some brain functions are deliberately shut down to give the patient time to heal.” The strategy for Governments now is to save lives! New York Governor Andrew Cuomo’s first tenet in his strategy to reopen the economy is “Do No Harm,” do nothing to make the rate of infection worse and take measures to decrease it. Governments are putting the preservation of lives over everything else.
We are now more interdependent than we have ever been.The concept of the local economy isolated from the global economy is largely non existent. We all have become dependent on goods produced not in our local shops and by our local industries but by mega factories in China, Brazil, Taiwan and the USA to name a few. Our services are supported not just by the good will and kindness of our local providers but are run on a digital information web with a global fiber optic spine and the data is all in the global cloud. Travel is also essential for the survival of many businesses and indeed entire nations depend on tourism and the ease of travel between cities and countries. The tourism and leisure economy is one of the fastest growing industries and has grown from contributing just over 5 trillion dollars to global GDP in 2006 to nearly 10 trillion in 2019. Therefore in many respects the game has changed and we are now going where no man has gone before. Since the situation is so new our solutions may also have to be new. Economists are very good at assessing the current situation but the solution may not lie in the economics. I believe we have to look at the WHO, WHAT, WHY, WHERE and WHEN. The answers to these questions will usually give us a complete story.
WHO- We are the same but in many ways we are different now. The way we access information and our tolerance to adversity may be changed.
WHAT- Yes this is a global financial crisis, but it is a different type. We have never opted out of spending and put the economy into a “medically induced coma,” before.
WHY- COVID 19. This global killer has spread faster than any other virus, in recent times. The economists say, “The economic contraction we’re experiencing is the fastest on record, by a large margin; we’ve probably lost as many jobs over the past two weeks as we did in the whole of the Great Recession. The policy response is also gigantic, several times as large a share of GDP as the Obama stimulus.”
WHERE- We know where we want to go. We want our economies OPEN! The road to this is still unknown or at least not well enough understood.
WHEN- TBD- Open in May! Open in June! We have heard it all, but when we open what will the reaction be.
This question I put to one of my closest friends, Dr. Rudi Webster. Rudi is an expert in human behavior and has been very successful as a sports psychologist. He sums it up like this:
”The values people hold will influence their behaviour - the things that are most important to them. In times of crisis there is often a reordering or relisting of values. In other words, the hierarchy of values change and sometimes there is a conflict of values. Do the benefits outweigh possible losses and harm, or vice versa? Adventurous people will take risks and the conservative or less adventurous will not - they will stay put. What benefits will I get from travelling. Will they be worth it? What could I lose if I travel?Escaping from isolation and boredom is a powerful motivator but so is fear of ill health and death.”
The road to this recovery is not mapped on GPS, or set by many other economic precedents. The study of human behavior may give us more clues than economic models and precedents. The decisions we make today, will create a template and establish our decisions as one of the great human pioneering feats. Godspeed to us all!