SINGAPORE (Apr 30): The Covid-19 pandemic has led to a near total shutdown of social and economic activity in all corners of the world. In just three months, global growth forecasts have been slashed. In early April, the World Bank reduced the growth forecast for Asean to a range of -0.5% to -5.0% and the economic impact is expected to be far greater than the financial crisis over the last two decades. Restarting economies and life will be the defining challenge for governments of the day.
Nearly the entire world is now in some state of lockdown, in various names and forms. The rationale is to break the chain of infection by reducing human interaction, ideally to near zero. The high contagiousness of the virus tells us that it is futile to try to strike a balance between containing its spread and mitigating the economic fallout arising from it. Take Singapore for example: The city-state was initially able to avoid a nationwide lockdown through a multitude of social distancing measures. However, a strict control order banning all social gatherings had to be imposed eventually in order to combat an unanticipated spike in infections within the densely populated foreign worker dormitories.
Restart the country, anticipating all likely scenarios
Whilst Singapore’s circuit breaker measures have been extended till June 1, leaders should also already start thinking about restarting society in the aftermath of this pandemic. There is a need to find an appropriate middle ground between a long, broad lockdown that damages the economy and a reopening that is too soon and too fast, risking public health through subsequent waves of infections and further debilitating lockdowns.
The road ahead, however, cannot be set in stone. Recovery from the pandemic is likely to be volatile and uneven. As a result, governments must develop a resilient and adaptive strategy for reopening, allowing for adjustments as events unfold and new information emerges in this state of flux.
We have seen three models for restarting social and economic life: The full reboot approach now being pursued by New Zealand, an approach focused on maintaining restrictions for vulnerable populations and the graduated approach undertaken by countries like China, which is expected to be most widely adopted.
Authorities in China lifted restrictions in a deliberate, phased and incremental manner based on the spread of the disease, the readiness of the public health system and the public’s preparedness. Beijing developed a national framework to guide its restart and provided wide discretion for implementation decisions at the local level. In late February, businesses considered to have low-to-medium transmission risk were permitted to restart. By the end of March, 99% of large businesses had restarted. Certainly, it is still early days and China could yet see a re-emergence in Covid-19 cases that would complicate the economic restart.
It is therefore pertinent for governments to prepare for all scenarios. Even as governments re-start their cities, states and countries, the risk of subsequent waves of infections remains high. Any restart must be made in progressive layers with an eye on all scenarios.
Implementing a graduated restart strategy
- Identify the right time to reopen — decisions must be made based on health care and public readiness.
- Establish a clear framework on how to reopen — governments should provide practical guidance for activity, including restrictions and expectations of behaviour. Industry leaders can leverage these guidelines to create playbooks for how companies in their sectors should operate in areas that are at different readiness levels.
- Execute with transparency and ensure the flexibility to adjust strategy — public trust and economic confidence are important for maintaining social cohesion and restoring economic growth. Trust in the approach is also important because citizens and businesses themselvesmust play an active role in making the strategy succeed by adapting to the ‘new normal’behaviours.
Rebound in the near and long term
Beyond restarting, governments must also start deliberating on how to engineer a rapid and sustainable rebound. The amount of stimulus packages announced by governments worldwide range up to 20% of National GDP. This is a sizable amount of money that has been poured into the pockets of people and companies. However, this is no guarantee of a good rebound as it is not merely about how much but about how the money is spent and governed. Governments need to consider how to convert their investments into sustainable, clean and equitable growth. They also must consider what measures will quickly restore confidence in the short term and medium term to get businesses going and how governments can ensure returns on stimulus packages.
Reimagine the government of the future
This deep and protracted crisis has given governments significantly more levers than they ever had to really reimagine what their nations could become. It is impressive how quickly and effectively many governments set up ‘war rooms’ and mission control towers to coordinate their pandemic responses across various departments like health, economy and the police. It remains to be seen if governments will persist with these agile and multi-functional collaborative ways of working in the long term and use these squads to solve other long-standing issues.
Governments also need to help citizens adjust to a new normal as they restart and rebound. To this end, digital services are more critical than ever before. From applying for permits to obtaining an education, citizens must be able to do more and more of this digitally. A bionic government is now more than ever an imperative.
It would be folly for the public to expect any government to predict with absolute certainty how this pandemic will play out. Nevertheless, people should expect a new normal where governments strive to anticipate likely scenarios and the willingness to listen, learn, and adapt.
for a rapid recovery.
Vincent Chin is Boston Consulting Group’s leader for public sector globally