SINGAPORE (May 8): On April 15, the director general of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, made two Twitter postings that are crucial for the resumption of economic activity. His tweets listed the observance of six conditions before countries can start lifting restrictions.
For one, the transmission of the novel coronavirus needs to be under control. Secondly, a country’s healthcare systems must be able to detect, test, isolate and treat every case, as well as trace every contact. Moreover, risks of further outbreak should be minimised in “special settings”.
The WHO director general added that preventive measures must be put in place in essential places, such as workplaces and schools. Importation risks must also be managed. In addition, communities should be fully informed and engaged on how to adjust to the new norm.
Several countries have slowly begun to lift restrictions. Vietnam was one of the earliest countries to relax some of its strict movement restrictions, allowing employees to return to offices and F&B outlets to open. Over the Causeway, Malaysia this week opened certain sectors and allowed the option of dining in at F&B outlets. In Spain, some 300,000 non-essential employees were able to return to work this week in the Madrid region.
In China, where the first outbreak of Covid-19 was first reported, travel restrictions within the country have already been partially eased prior to Ghebreyesus’ tweets. Residents with a government-assigned green code on their mobile phones are only allowed to return to work, subject to approval from their employers.
For Singapore, the authorities have begun to relax some of the circuit breaker measures, which were imposed since April 7. For instance, traditional Chinese medicine (TCM) acupuncture could now be offered to customers for pain management — only if assessed by the TCM practitioner to be essential.
Come May 12, home-based food businesses, selected food retail outlets, food manufacturing firms, retail laundry services, barbers and hairdressers, retail pet shops will be able to resume operations too. These developments were announced by National Development Minister Lawrence Wong, who is the co-chair of the multi-ministry taskforce tackling the Covid-19 outbreak here.
However, the resumption of air travel has yet to be announced, though this is only for essential flights. Minister for Trade and Industry Chan Chun Sing noted that he had discussed this issue with his counterparts from South Korea, Australia, New Zealand, Canada and Japan. The discussions revolved around the standards of health checks for mutual assurance. A system to track and trace infected passengers is required to be put in place before essential air travel can resume. “We are preparing the groundwork,” he told reporters on May 3.
Chan added that it is difficult to estimate when the remaining sectors can be reopened. The key concern now is to ensure that the number of infections can be reduced in a sustainable manner. “…[This] will give us greater confidence to progressively open more sectors to recover as near to full capacity as we possibly can,” he said.
The urgency to reactivate Singapore’s economy is understandable given that it is an open economy and relies heavily on trade. Its status as a major financial centre, petrochemical hub, aviation hub and shipping hub only reinforces that urgency. If economic activity were to remain subdued, the resulting economic and financial damage would be much more severe and longer lasting. A recovery would take even longer. The various measures and schemes to prop up the economy can only do so much.
Yet if Singapore reopens its economy too soon, a new wave of infections could be unleashed. This could force the country to impose circuit breaker measures again, which ironically would further impact economic growth. Worse still, Singapore’s healthcare system could be overwhelmed, thus, allowing the pandemic to spiral out of control.
As at May 6 noon, Singapore has a total of 20,198 infections. The number of Covid-19 infections in the country is the highest in Southeast Asia and the third highest in Asia. Most of these cases involve migrant workers who live in dormitories. The number of new cases had for a time averaged a thousand a day, but that has declined in the past week.
Sumit Agarwal, professor of finance, economics and real estate at the National University of Singapore, says the government faces two competing voices. On one hand, the single objective of healthcare officials is to reduce infection and death rates. On the other hand, the economists and business leaders are arguing that by prolonging the restrictions, livelihoods will be destroyed. This could increase morbidity and mortality rates through other means, he tells The Edge Singapore.
Vincent Chin, managing director and senior partner at Boston Consulting Group, says small and medium enterprises (SMEs) stand to lose the most. This is because SMEs are the biggest employers of Singaporeans, though they do not constitute the biggest contributor collectively to GDP. In fact, SMEs are also mostly mom-and-pop stores that rely on savings to weather through the downturn, unlike the big multinational corporations that have deep pockets. Hence, if many SMEs go bust, the livelihoods of many Singaporeans will be affected. “So, it is a matter of balancing lives and [livelihoods],” he tells The Edge Singapore.
Srividya Jandhyala, associate professor at ESSEC Business School, agrees. “There is no easy win in this situation. We [must] balance the need for economic activity versus health risks. The key is going to be opening up in a measured fashion, gradually removing restrictions and testing the waters with each change,” she says.
To that end, Chin reckons that Singapore’s choice to open certain sectors first compared to others is a “fair sequence”. It is a combination of services that allow society to keep functioning and those that contribute to economic growth, he says. It is also a function of global demand. Chin says industries, such as precision manufacturing and petrochemical industries, should not open at full operating capacity given that global demand has tapered off as a result of the pandemic.
As for aviation and tourism sectors, these are obviously the last to open as their resumption is dependent on other countries, he adds. “Even if Singapore wants Singapore Airlines to fly again, it is not as if the other airports around the world are opening up,” he says.
At the same time, some measures to contain the spread of the Covid-19 pandemic will continue to be adopted. Max Loh, managing partner EY Singapore and Brunei, says a robust testing regime needs to be implemented. This should be supplemented with a contact tracing program and protocols that are enabled by technology, he adds.
“We need to recognise that, even if the Covid-19 situation is controlled, the threat of the virus will never fully be eradicated until we develop sufficient immunity, or have a vaccine or antiviral treatment, and that will take time. Till then, there is always a risk of another infection or outbreak,” Loh tells The Edge Singapore.
While many countries are reopening their economies on a sector by sector basis and keeping infection rates low, Theodoros Evgeniou, professor of decision sciences and technology management at Insead; Anton Ovchinnikov, professor of management analytics at Smith School of Business in Canada; and David Hardoon, senior advisor for data and artificial intelligence at UnionBank Philippines, tell The Edge Singapore in a joint interview that this approach is less efficient.
“These are measures to stop the spread of the virus. But they are not sustainable. It can buy you some time in the beginning, but ultimately it is not sustainable,” says the trio.
On the contrary, the trio is convinced that taking a personalised or targeted approach would be sustainable to reopening an economy. The trio suggests that people with less risk of suffering a severe outcome as a result of Covid-19 should be exempted from more restrictive measures, such as working from home. They should be allowed to return to work in offices and resume normal activities.
However, if they get infected, they have a higher chance of suffering only mild symptoms and eventually develop personal and herd immunity. Of course, this does not mean that they should not observe social distancing measures and wash their hands frequently, adds the trio.
On the other hand, people with high risk of suffering a severe outcome from Covid-19 should be placed under more restrictive measures. This could include working from home and getting their groceries delivered, says the trio. They should minimise contact with other people, but where not possible, visitors should don protective equipment, the trio adds. “Our approach is not managing who is sick. It is managing the consequences of getting sick,” the trio says.
The key is separating people into these two groups. The trio says countries such as Singapore can use Big Data to identify those with high or low risk of suffering a severe outcome from Covid-19. This may include information pertaining to demographics, medical and travel history.
After all, artificial intelligence and machine learning software are used to offer differentiated solutions in business. Why not use the same methods for reopening the economy by allowing people with less risk of suffering a severe outcome to resume normal activities, the trio questions