Thinking Aloud

Coronavirus: Grappling with a triple whammy global crisis

Countries face major health, economic and financial battles, each with knock-on impacts

In the span of a few long weeks, the world as we knew it and most of the bold projections about what lies ahead have been upended.

When business and political leaders met at the annual meeting of the World Economic Forum in Davos in January, there was much talk about addressing climate change, managing the trade and technology tensions between the United States and China, and pondering the threat posed to workers and societies by rapid advances in artificial intelligence (AI) and robotics.

US President Donald Trump was busy trumpeting his plans to keep America great in his second term, after its "amazing comeback" under his leadership.

China hands were projecting its inexorable rise to global dominance, along straight-line extrapolations into the future. Techno-optimists were excited by the prospects of solving many of the world's problems using AI and big data.

These forecasts and predictions have come crashing down abruptly, disrupted by a new virus, not of the digital kind, but the old-fashioned organic variety.

The world is now in the grips of a "once-in-a-century pandemic", as some experts have described it, with outbreaks of Covid-19 just about everywhere.

As the number of people infected mounts, governments are finally being forced to take the pandemic seriously.

That's the good news - or rather, as good as the news gets.

Here's the bad news: If you thought the last few weeks were grim, then brace yourself for worse, much worse, to come.

But why so gloomy, you ask?

Well, to put it simply, the world is now facing a triple whammy of a crisis - on the health, economic and financial fronts.

Efforts to tackle one has knock-on effects and could compound problems in the other spheres, forcing painful trade-offs and difficult judgment calls.

No one can be sure how things will play out, or whether the judgments being made will pay off as expected. Yet, leaders, officials and doctors will have to make life-and-death decisions, acting even in the face of uncertainty, but, hopefully, based on science and available evidence, rather than politics, gut instincts or - worse - prejudices and biases.


For now, the consensus seems to be that the best - or least bad - option, given that the virus is spreading, farther and faster by the day, is the much bandied about "flattening of the curve" approach.

In short, this entails taking measures, such as contact tracing, quarantines and "safe distancing" to try to slow down the spread of the virus.

The aim is to prevent a sudden spike in infections which would overwhelm hospitals if more people turn up in need of treatment than the healthcare system can cope with, thereby putting lives at risk.

Flattening the curve buys society time, which hopefully is used well to ramp up medical facilities, as well as to find a vaccine or a cure in a hurry. By doing so, more might receive critical care, medicines might make the effects of the illness less deadly, and vaccinations could help more people fend off the bug.

Yet, this also means that while the peak in numbers might be suppressed somewhat, and delayed, the outbreak would be spread out over a longer period.

In addition, the stronger the measures to press down the curve - think lockdowns, travel restrictions, closed schools, churches and mosques, shutdowns of bars and restaurants - the greater the impact on the economy, as social interaction and the business this generates dries up.

This will put jobs, companies, perhaps even whole industries, at risk. So, apart from people falling ill, we must expect to see companies collapsing as well, and the numbers growing, not only of infections, but also of layoffs and unemployment.

As companies take a hit, and struggle to pay their workers, bills and loans, the impact will be felt not just on the stock markets but also the financial sector.

Fear feeds fear, and downward spirals can quickly follow.

In this sense, the antidote for curbing the coronavirus outbreak is somewhat akin to cancer treatments, administered in the hope of fighting a deadly disease, but not without risks of the patient suffering serious side effects in the process.

A recent front-page report in The New York Times summed up this situation starkly: "Entire sectors of the American economy are shutting down, threatening to crush businesses and put millions of people out of work and forcing lawmakers to consider a vast financial bailout that would dwarf the federal government's response to the 2008 crisis."

A further complication is that measures to flatten the curve can't go on indefinitely. When lockdowns and social distancing measures are rescinded, and people start emerging from their homes and returning to work, fresh waves of infection could strike.

Outbreaks might also flare up in places where they had previously not been seen, with weaker healthcare systems, which are less able or willing to test and detect, let alone deal with them, as the World Health Organisation has warned, pointing to Africa and some parts of our neighbourhood.

Given the very connected world we live in, fresh outbreaks anywhere will put everyone back to square one - the risk of infections being imported back and setting off the whole rigmarole of contact tracing, quarantines and social distancing all over again.

Staying on top of this rapidly evolving triple whammy of a crisis will call for sober, honest and trusted leaders, alive to the challenges, ready to tell it like it is to their people, and prepare them for what might lie ahead.

As the British magazine The Economist put it recently: "To see what is to come, look to Lombardy, the affluent Italian region at the heart of the Covid-19 outbreak in Europe.

"Its hospitals provide world-class healthcare. Until last week, they thought they would cope with the disease - then waves of people began turning up with pneumonia. Having run out of ventilators and oxygen, exhausted staff at some hospitals are being forced to leave untreated patients to die."

In contrast, The Economist, never a booster for Singapore, added: "The best example of how to respond is Singapore, which has had many fewer cases than expected.

"Thanks to an efficient bureaucracy in a single small territory, world-class universal healthcare and the well-learnt lessons of Sars, an epidemic of a related virus in 2003, Singapore reacted early.

"It has been able to make difficult trade-offs with public consent because its message has been consistent, science-based and trusted."

Such unexpected accolades have been pouring in over the past weeks. But lest these get to our heads, it is worth remembering the magazine's opening refrain: "To see what is to come, look to Lombardy." A rich community, with world-class healthcare, imagined it could deal with the crisis, but found itself overwhelmed when the infections surged unexpectedly.

The upshot of this is clear: Singapore has done well in managing the crisis so far, but we must not get smug or complacent. For there is more to come before this crisis runs its course in the months ahead, and we need to be ready for it, mentally, socially and, yes, even politically.

Writing in The Financial Times, commentator Martin Wolf put it this way: "No event better demonstrates why a quality administrative state, led by people able to differentiate experts from charlatans, is so vital to the public."

Indeed. At this crucial time, the sensible and sober statements by Health Minister Gan Kim Yong and National Development Minister Lawrence Wong, painstakingly explaining the considered steps they are taking and how these will help manage the situation, stand in reassuringly stark contrast to the bloviating we are witnessing from some leaders elsewhere.

Taking up some of the same issues the two ministers have been addressing in their almost-daily media briefings, FT's Mr Wolf went on to add: "A central question is how deep and long the health emergency will be. One hope is that locking down countries (as in Spain) or parts of countries (as in China) will eliminate the virus. Yet, even if this proved to be true in some places, it will clearly not be true everywhere. An opposite extreme is that up to 80 per cent of the world's population could be infected.

"At a possible mortality rate of 1 per cent, that could mean 60 million additional deaths, equivalent to the Second World War. This calamity would probably also take time: The Spanish flu of 1918 came in three waves, over a year. Yet it is more likely that this ends up in the middle: The death rate will be lower, but the disease will also not disappear.

"If so, the world might not return to pre-crisis behaviour until well into 2021."

If, alas, the present crisis proves to be so long-drawn, the impact it will have on society is likely to be deep, long-lasting and profound.

The Israeli historian Yuval Noah Harari summed this up in a thought-provoking essay, published in the FT. He asserted, by no means histrionically: "Humankind is now facing a global crisis. Perhaps the biggest crisis of our generation. The decisions that people and governments take in the next few weeks will probably shape the world for years to come.

"They will shape not just our healthcare systems but also our economy, politics and culture. We must act quickly and decisively. We should also take into account the long-term consequences of our actions."

Some troubling signs are already emerging. The current US-China tensions look set to intensify. Mr Trump, by his repeated references to the "Chinese virus", is setting up a bogeyman, to whip and stir up his electoral base, by pinning the fallout from the disease on China.

But the notion that China should be blamed, and be expected to apologise for the so-called Wuhan virus, is ludicrous. Equally, so too is the suggestion that it should be thanked for the way which it worked aggressively to bring it under control.

That would be like suggesting that the US should be asked to apologise for setting off the 2008 financial crisis - which it did not wish on itself or anyone else - or thanked for the decisive way it dealt with it.

Both are equally pointless propositions, though each has its share of boosters.

Given the triple-fold crisis at hand, and the urgent need for global cooperation to tackle this, a "with-me-or-against-me" world, split uncomfortably between the US and China, is in no one's interests.

Even so, supply chains, which had already begun to be reshaped because of the trade spat last year, will come under further scrutiny, amid a growing concern over the commercial and strategic risks of being overly dependent on any one source. The changes that follow will bring both challenges as well as opportunities.

A prolonged economic slump could also force a restructuring of companies and industries in ways we might not yet have imagined.

After months of being cooped up at home, will people want to rush out to eat and be merry, head back to the shops, cinemas and gyms, or seek to roam the world, as before? Or would they have grown enamoured of the joys of online deliveries, streaming, and other new ways to stay happy and healthy?

Having been kept away from their offices, will workers long to return to the social chatter of water-coolers and pantries? Will they prefer those interminable meetings and long business lunches to working at home, with family and kids close at hand? Conversely, would bosses conclude that tele-working can be just as productive, requiring less expensive office space, business travel, and - shudder the thought - a lower headcount?

Who knows? At the moment, it is hard enough to predict what will happen next week or month, let alone next year and beyond.

What is clear is this: It is best not to assume a return to the status quo ante before the dawn of this blighted Year of the Rat in late January, which also marked the arrival of the first cases of the new coronavirus in Singapore.

Straight-line projections from the past into the future have already proven hopelessly wrong. Assuming that things will resume from where they were, after a long, painful period of disruption, as we are now all living through, is likely to be as misguided and fanciful.

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A version of this article appeared in the print edition of The Sunday Times on March 22, 2020, with the headline Coronavirus: Grappling with a triple whammy global crisis. Subscribe