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Outbreak in Asia Aviation gloom doom Working from home
MCI(P) 053/04/2020 April 2020
Pandemic HOW LONG? HOW BAD?
Countries face major health, economic and financial battles as the viral bug
continues to infect. What lies ahead and will we manage to flatten the curve?
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34 contents
Country Report
Indonesia rolls out
new regulations
to step up fight
against Covid-19
outbreak
PHOTO: REUTERS
38 Spotlight
Rich and powerful not spared
49 Lifestyle
High-fliers say working from
home can be productive
40 Special Report
Tapping the Samurai spirit to
change Fukushima’s image 52 Big Picture
New badges of honour for
S. Korean nurses
Fukushima stakes future on
renewables
45 Climate Change
‘Tipping points’ of rapid and
irreversible climate change
3
Cover Story
Lessons
already learnt,
and more
to come
Oh, the irony: Humans are now captive to
dislocation and fear from an animal-linked virus.
What lies ahead for the world – and especially
Asia, which is no stranger to contagion?
ONE DAY, 2020 WILL PROBABLY COME TO BE has sickened more than 850,000 people and taken
known as the year the animals got their revenge more than 40,000 lives, as of March 31. Frighteningly,
RAVI VELLOOR
and put humans in cages. the numbers have begun rising in Africa, itself just
Associate Editor
How else to describe the plight of the elderly emerging from a long battle with Ebola.
woman in Italy – now the nation that has logged the
most coronavirus deaths – who could only watch OUT OF ASIA
as her dead husband’s body was taken away for a History’s wheels move in circles.
funeral she was not allowed to attend because of In the past quarter-century, the world was first
the strict quarantine orders placed on her? forced to take notice of a contagion emanating from
Or the family near New York where three of the Asia with the onset of the Asian financial crisis,
seven who caught the virus died and the others live often called the East Asian flu.
on, wondering if the only reason the doors would Just as now, its origin lay in China, when it
velloor@sph.com.sg
open for them is for another householder to be devalued its currency sharply in 1994, cutting the
released into Death’s sly hands? competitiveness of exports from Japan to Thailand.
The world has been turned upside down by a Like a boxer rocked on his feet, the rest of
virus that scientists say made a leap from bats to East Asia staggered around for a couple of years.
humans. Our dogs, cats, roosters – and if you are Speculators began attacking Asian assets. By July
in India, cows – roam free while their owners are 1997, the Thai baht collapsed and in no time, the
captives to disease, dislocations and fear. Asian flu had swept through the region, toppling the
From Japan to Italy, Britain and the United States, Indonesian regime and devastating the Thai, South
the developed world is a sea of confusion, while Korean, Malaysian and Indonesian economies.
some days it looks as though it is the developing Then in 2002, the severe acute respiratory
world that is doing a better job at keeping a clear syndrome, or Sars, began to afflict people in
head. Guangdong. Thought to be an animal virus, it
New York Governor Andrew Cuomo painted was identified in 2003. This time it was not a
the best description of what is going on. At a press metaphorical flu and was deadly while it lasted.
conference televised live by CNN on March 17 night Then came another respiratory illness new to
in Asia, he likened the situation to the snow globes humans. This time, it originated in West Asia.
you had as a child: Touch one part of it and the Middle East respiratory syndrome was first reported
whole image fuzzes over. in Saudi Arabia in 2012 and has since spread to
Not a continent has been unaffected. The disease several other countries, including the US.
4 AsianInsider April 2020
An employee wearing a
face mask working on an
assembly line at a motor
vehicle plant of Dongfeng
Honda in Wuhan, Hubei.
The coronavirus has
crushed the Chinese
economy, says the writer,
with new bond defaults in
China reportedly topping
US$1 billion (S$1.4 billion).
PHOTO: AFP
Millennials in
London and New
York, confident
they will live
forever and
cheered by early
reports that
the very young
and the old are
In some respects, Covid-19, as we have come from coming home despite its strident nationalism. most vulnerable,
to know the coronavirus currently tormenting us, It has good reason to do so; the country has less had partied
is all of the above and possibly far more durable. than one hospital bed for every thousand people, a
At its source, it has crushed the Chinese economy. third of the global average.
ceaselessly.
The world’s No. 2 had already been slowing, weighed In South-east Asia, speculators are eyeing Now, it appears
down by a debt to gross domestic product ratio that Thailand, the region’s No. 2 economy, as the one that the medical
crossed a staggering 300 per cent last year, according most vulnerable, now that its last engine – tourism – evidence does
to the Institute of International Finance. Today, new has stopped firing. Indonesia’ currency has suffered
bond defaults in China are reportedly topping US$1 some of the steepest falls. Talk about a sense of
not support the
billion (S$1.4 billion). Little surprise, too, that the deja vu. theory that the
country has not published data on business closures What’s worrying is that we still do not know young are that
for the past six months. enough about this virus. In January, China’s top invincible: In
In the US, the biggest economy, the US$1.2 epidemiologist, who won fame for identifying the
trillion market for loans to junk-rated firms, which Sars virus in 2003, had said that Covid-19 would
Italy, almost a
survived the 2008 housing-led financial crisis, is not be as harmful as Sars and would be controlled quarter of the
under severe strain. Wider afield, 12 years of cheap sooner. Neither prediction has proved accurate. patients are
and easy money policies have built a US$10 trillion Millennials in London and New York, confident aged between
debt mountain. A hefty shove, which would be the they will live forever and cheered by early reports 19 and 50.
equivalent of the virus crisis persisting for another that the very young and the old are most vulnerable,
six months, could topple the edifice. had partied ceaselessly. Now, it appears that the
Instructively, the US$1 trillion rescue plan medical evidence does not support the theory that
unveiled by the Trump administration on March 18 the young are that invincible: In Italy, almost a
could not prevent economic panic from accelerating. quarter of the patients are aged between 19 and 50.
Britain, which had set out on a path of building
VULNERABLE ECONOMIES “herd immunity” by not standing in the way of large-
Several smaller but significant economies are scale exposure to the virus, reversed course after
in worse shape. seeing calamitous projection from Imperial College
India was facing a consumption demand and London and after the World Health Organisation
banking crisis even before the virus hit home. Now, (WHO) pointed out that while it took three months
the Indian government, terrified of the enormity of for the number of coronavirus cases to reach
the challenge, has stopped its own nationals abroad 100,000, it took a mere 12 days for the next 100,000.
5
China claims to have licked the
disease and that the new cases it
is seeing mostly originated abroad,
but oddly, many of its workers and
students aren’t back in factories
and colleges. Could a vast nation
that has more than 60 cities with
populations of more than a million
be so certain that it has stopped
all domestically originated cases
of the disease?
An Indonesian police
officer spraying
disinfectant at a local China claims to have licked the disease and that look a lot different – industrially, commercially,
school in Palu, Central the new cases it is seeing mostly originated abroad, politically and socially.
Sulawesi. History’s wheels
move in circles, and this is but oddly, many of its workers and students aren’t Start with global institutions. There will be close
a case of deja vu, says the back in factories and colleges. Could a vast nation scrutiny of the role played by WHO in combating
writer, recalling the Asian that has more than 60 cities with populations of the crisis. Questions will be raised about whether
financial crisis of the past more than a million be so certain that it has stopped its role as a scientific body got mixed up with its
quarter-century which
swept through the region
all domestically originated cases of the disease? responsibilities as a diplomatic institution under
and eventually toppled the As Dr Bruce Aylward, senior adviser to the the Charter of the United Nations, causing it to be
Indonesian regime. PHOTO: director-general of WHO, said in a recent Time ultra-careful about not getting on the wrong side
AGENCE FRANCE-PRESSE magazine interview: “Never, never underestimate of the Chinese government.
a new disease, there’s just too much unknown.” For instance, did it really have to wait so long to
declare a disease outbreak a pandemic?
AND WHEN IT’S OVER? What about the International Monetary Fund
What happens when the chips are done falling? (IMF)? On Feb 19, it released a surveillance note
The world that will emerge is probably going to that maintained its January projection that global
200M
Black Death (Bubonic Plague)
1347-1351
HISTORY OF PANDEMICS
Death toll (highest to lowest)
56M
40-50M 30-50M
Smallpox
Spanish Flu Plague of Justinian
1520
1918-1919 541-542
The outbreak wiped out 30-50% Smallpox killed an estimated 90% of Native Americans. The death toll of this plague is still under
of Europe’s population. It took In Europe during 1800s, an estimated 400,000 people debate as new evidence is uncovered, but
more than 200 years for the were being killed by smallpox annually. The first ever many think it may have helped hasten
continent’s population to recover. vaccine was created to ward off smallpox. the fall of the Roman Empire.
6 AsianInsider April 2020
Supply chains will be upended. Even if China
sends its factory workers back to work, many
companies are facing massive supply disruptions Supply
– from the US and from South-east Asia. Who will chains will be
they supply finished goods to when global demand upended. Even
has collapsed? if China sends
It is rare to see both supply and demand cratering
simultaneously, as they are now.
its factory
What about China, where the disease originated workers back
and whose first instinct was to prevent the news to work, many
from leaking rather than warn the world of the companies
danger?
Global diplomacy will probably go through a
are facing
severe reassessment, too. Whatever embers of good massive supply
feeling that existed between the US and China have disruptions –
disappeared in the wake of the “China virus”, as from the US and
President Donald Trump insists on calling it, fuelling
Chinese fury.
from South-east
European solidarity has been exposed as a fig Asia. Who will
leaf as each country rushed to protect its own, they supply
starting with Germany, the European Union’s biggest finished goods
economy. It is China that is coming to the aid of to when global
countries such as Italy and Estonia as they fight
Covid-19. demand has
At the same time, some analysts are linking the collapsed?
virus outbreak in Italy and in the Iranian city of Qom
to both countries being enthusiastic participants in
ST ILLUSTRATION: CEL GULAPA
ST ILLUSTRATION: CEL GULAPA
China’s Belt and Road Initiative.
There is major concern in Europe that its industry
will not be able to withstand another bout of state-
growth will accelerate to 3.3 per cent this year from subsidised Chinese exports that will inevitably
2.9 per cent last year. follow once there is a measure of check on the
A month later, that assessment looks plain silly. disease.
A series of Cholera outbreaks spread
around the world in the 1800s killing
millions of people. There is no solid
concensus on death tolls.
25-35M 12M 5M 3M 1.1M 1M 1M 1M
HIV/AIDS The Third Plague Antonine 17th Century Asian Flu Russian Flu Hong Kong Flu Cholera 6
1981 - present 1855 Plague Great Plagues 1957-1958 1889-1890 1968-1970 outbreak
165-180 1600 1817-1923
1M 600K 200K 100-150K 11.3K 850 770
Japanese 18th Century Swine Flu Yellow Fever Ebola MERS SARS
Smallpox Epimedic Great Plagues 2009-2010 Late 1800s 2014-2016 2012 -present 2002-2003
735-737 1700 37K
(as of March 31)
Covid-19
2019 - present (ongoing) Source: VISUAL CAPITALIST
7
Meanwhile, respected China specialists such for years are getting a cleaning and teenagers are
as Mr Daniel Rosen of the Centre for Strategic talking to their parents.
and International Studies suggest that Beijing’s The world has suffered – and survived – so many
inclination to massage the numbers hasn’t abated cataclysmic events just this century. The Indian
despite its mishandling of the virus emanating from Ocean undersea earthquake and tsunami in 2004
Wuhan. Senior officials are compelling juniors to originated in northern Sumatra and killed more than
go into offices over the weekend and keep the air- 200,000 people, including on the faraway African
conditioners running in order to show higher power coast. Deadly typhoons with names like Katrina
consumption, a key indicator of economic activity. and Haiyan killed thousands in New Orleans and
Without question, just as in an earlier era when in the Philippines in 2005 and 2013, respectively.
the success of the East Asian tiger economies The combined toll from the great earthquakes
spawned literature on the superiority of “Asian” in Kashmir in 2005 and in Haiti in 2010 topped
governance models, there already is plenty of 300,000.
discussion on whether authoritarian models such The US should have been a leader in meeting
as the Chinese example are more of a help than this crisis. Sadly, it has turned out to be a laggard,
a hindrance in crises than “messy” democracies. all too eager to shift the blame elsewhere. The US
The Italians, some will likely point out, have President who dismisses climate change as fiction
had more than 60 governments since World War II. and the coronavirus outbreak as a hoax has had
China, which showed remarkable ability to control to eat crow, to borrow an Americanism. It is time
the outbreak, has had one. humans realised that they don’t own the world so
Economic shibboleths have already been much as share it with other forms of life.
rewritten; after the Asian financial flu, the IMF This crisis, too, will pass but more will doubtless
second-guessed many of the policies it had applied follow and we need to prepare. A disproportionately
for decades, particularly its advice to tighten interest large number of these calamities are occurring
rates in order to protect free-falling currencies. It is around us, in Asia. Even as average lifespans are
not unreasonable to believe that political systems lengthening owing to advances in science, deaths
could be put under a similar lens. from unnatural events get more commonplace.
To be sure, there’s been stuff to cheer about amid Maybe we will get used to it.
the gloom. Dolphins and swans have reportedly That would make us rather like the animals we
reappeared in Venetian canals. capture for pleasure and profit – watching some
Big fat Indian weddings are being toned down, you know and love leave ahead of you even as you
even as the air in the nation’s capital has never felt are aware that, fine as you might feel just now, one
cleaner. In countless homes, cupboards unattended day the bell will toll for you.
Deaths per day Disturbing projections
per 100,000 population ROCKING POLICYMAKERS, A STUDY BY LONDON’S
25 Imperial College on March 16 altered Britain and
America’s response to the Covid-19 outbreak after
predicting a peak of 510,000 deaths in the UK and
GB (total=510,000)
20 2.2 million deaths in the US in the following three
US (total=2,200,000) months (see infographic), reports CNN.
Based on the infection growth rate in Wuhan,
where the virus originated, it also said that 80
15 per cent of Britain‘s and US populations would be
infected over the course of the outbreak.
While the study rests on assumptions that are
10 not very clear, it also outlined the most effective
combination of intervention to be a combination
of isolation, home quarantine and social
5 distancing of those most at risk, reducing peak
critical care demand by two-thirds and halving the
number of deaths.
On the day the study was released, the British
0
government abruptly called on vulnerable and
March April May June July Aug Sept Oct elderly citizens to isolate themselves for 12 weeks,
2020 2020 said CNN, while US President Donald Trump
unveiled a 15-day plan to slow new infections in
Source: Imperial College Covid-19 Response Team the United Stateson the same day.
8 AsianInsider April 2020Cover Story
Grappling with a triple Countries face major
health, economic and
whammy global crisis financial battles, each
with knock-on impacts
IN THE SPAN OF A FEW LONG WEEKS, THE WORLD to keep America great in his second term, after its
as we knew it and most of the bold projections about “amazing comeback” under his leadership.
WARREN
what lies ahead have been upended. China hands were projecting its inexorable rise to
FERNANDEZ When business and political leaders met at the global dominance, along straight-line extrapolations
Editor-in-Chief annual meeting of the World Economic Forum into the future. Techno-optimists were excited
in Davos in January, there was much talk about by the prospects of solving many of the world’s
addressing climate change, managing the trade and problems using AI and big data.
technology tensions between the United States and These forecasts and predictions have come crashing
China, and pondering the threat posed to workers down abruptly, disrupted by a new virus, not of the
and societies by rapid advances digital kind, but the old-fashioned organic variety.
in artificial intelligence (AI) The world is now in the grips of a “once-in-
and robotics. a-century pandemic”, as some experts have
warren@sph.com.sg
US President Donald described it, with outbreaks of Covid-19 just
Trump was busy about everywhere.
trumpeting his plans 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
ST ILLUSTRATION: CEL GULAPA might make the effects of the illness less deadly, and
9vaccinations could help more people fend off the bug. A further complication is that measures to
Yet, this also means that while the peak in flatten the curve can’t go on indefinitely. When
numbers might be suppressed somewhat, and lockdowns and social distancing measures are
delayed, the outbreak would be spread out over a rescinded, and people start emerging from their
longer period. homes and returning to work, fresh waves of
In addition, the stronger the measures to infection could strike.
press down the curve – think lockdowns, travel Outbreaks might also flare up in places where
restrictions, closed schools, churches and mosques, they had previously not been seen, with weaker
shutdowns of bars and restaurants – the greater the healthcare systems, which are less able or willing
impact on the economy, as social interaction and to test and detect, let alone deal with them, as the
the business this generates dries up. World Health Organisation has warned, pointing
This will put jobs, companies, perhaps even whole to Africa and some parts of our neighbourhood.
industries, at risk. So, apart from people falling ill, Given the very connected world we live in,
we must expect to see companies collapsing as well, fresh outbreaks anywhere will put everyone
and the numbers growing, not only of infections, back to square one – the risk of infections
but also of layoffs and unemployment. being imported back and setting off the whole
As companies take a hit, and struggle to pay their rigmarole of contact tracing, quarantines and
workers, bills and loans, the impact will be felt not social distancing all over again.
just on the stock markets but also the financial sector. Staying on top of this rapidly evolving triple
Fear feeds fear, and downward spirals can quickly whammy of a crisis will call for sober, honest and
follow. trusted leaders, alive to the challenges, ready to
In this sense, the antidote for curbing the tell it like it is to their people, and prepare them
coronavirus outbreak is somewhat akin to cancer for what might lie ahead.
treatments, administered in the hope of fighting a As the British magazine The Economist put
deadly disease, but not without risks of the patient it recently: “To see what is to come, look to
suffering serious side effects in the process. Lombardy, the affluent Italian region at the heart
A recent front-page report in The New York Times of the Covid-19 outbreak in Europe.
summed up this situation starkly: “Entire sectors “Its hospitals provide world-class healthcare.
of the American economy are shutting down, Until last week, they thought they would cope
threatening to crush businesses and put millions of with the disease – then waves of people began
people out of work and forcing lawmakers to consider turning up with pneumonia. Having run out of
a vast financial bailout that would dwarf the federal ventilators and oxygen, exhausted staff at some
government’s response to the 2008 crisis.” hospitals are being forced to leave untreated
The epidemic curve Flattening the curve
The epidemic curve charts the progression of infection. MANY WHO HAVE BEEN FOLLOWING DEVELOPMENTS
Keeping the curve flat – by ensuring that the number of on the Covid-19 outbreak will have noticed
cases does not rise sharply – will help prevent hospital healthcare professionals increasingly refer to a
curve that needs flattening. Called an epidemic
systems from being overwhelmed, say experts. curve, it is used to visualise when new cases
Number of cases happen and at what speed during a virus outbreak.
Uncontrolled This simple n-shaped curve presents the
transmission Control measures* stark reality of how quickly a virus can spread if
slow the spread of unchecked. A key goal of public health officials is
disease and reduce to avoid a huge peak in Covid-19 cases (a curve
burden on hospitals
with a steep incline spread over a shorter period
of time), in favour of a slower growth that becomes
Healthcare system’s a moderate plateau (a curve with a gentler incline,
capacity (ICUs, spread out over a longer time period).
ER visits, etc.) But why does it matter if the curve is
flattened? Flattening the curve will, in a way, help
With controls to buy time and allow people better access to
healthcare. (see infographic 1)
National Development Minister Lawrence
Time since first case Wong, who co-chairs Singapore’s multi-ministerial
NOTE: *Control measures may include handwashing, teleworking, limited large gatherings, task force set up to combat the spread of
minimising travel, etc. Covid-19, said at a press conference on March
Infographic 1 Source: ESTHER KIM, CARL BERGSTROM STRAITS TIMES GRAPHICS 6: “Slowing down the spread and flattening the
10 AsianInsider April 2020patients to die.” and National Development Minister Lawrence
In contrast, The Economist, never a booster for Wong, painstakingly explaining the considered steps
Singapore, added: “The best example of how to they are taking and how these will help manage the Flattening the
respond is Singapore, which has had many fewer situation, stand in reassuringly stark contrast to curve buys
cases than expected. the bloviating we are witnessing from some leaders society time,
“Thanks to an efficient bureaucracy in a single elsewhere.
small territory, world-class universal healthcare Taking up some of the same issues the two which hopefully
and the well-learnt lessons of Sars, an epidemic ministers have been addressing in their almost- is used well to
of a related virus in 2003, Singapore reacted early. daily media briefings, FT’s Mr Wolf went on to add: ramp up medical
“It has been able to make difficult trade-offs “A central question is how deep and long the health facilities, as
with public consent because its message has been emergency will be. One hope is that locking down
consistent, science-based and trusted.” countries (as in Spain) or parts of countries (as in well as to find
Such unexpected accolades have been pouring China) will eliminate the virus. Yet, even if this proved a vaccine or a
in over the past weeks. But lest these get to our to be true in some places, it will clearly not be true cure in a hurry.
heads, it is worth remembering the magazine’s everywhere. An opposite extreme is that up to 80 By doing so,
opening refrain: “To see what is to come, look to per cent of the world’s population could be infected.
Lombardy.” A rich community, with world-class “At a possible mortality rate of 1 per cent, that
more might
healthcare, imagined it could deal with the crisis, could mean 60 million additional deaths, equivalent receive critical
but found itself overwhelmed when the infections to the Second World War. This calamity would care, medicines
surged unexpectedly. probably also take time: The Spanish flu of 1918 might make
The upshot of this is clear: Singapore has done came in three waves, over a year. Yet it is more likely
well in managing the crisis so far, but we must not that this ends up in the middle: The death rate will
the effects of
get smug or complacent. For there is more to come be lower, but the disease will also not disappear. the illness less
before this crisis runs its course in the months “If so, the world might not return to pre-crisis deadly, and
ahead, and we need to be ready for it, mentally, behaviour until well into 2021.” vaccinations
socially and, yes, even politically. If, alas, the present crisis proves to be so long-
Writing in The Financial Times, commentator drawn, the impact it will have on society is likely
could help more
Martin Wolf put it this way: “No event better to be deep, long-lasting and profound. people fend off
demonstrates why a quality administrative state, The Israeli historian Yuval Noah Harari summed the bug.
led by people able to differentiate experts from this up in a thought-provoking essay, published
charlatans, is so vital to the public.” in the FT. He asserted, by no means histrionically:
Indeed. At this crucial time, the sensible and “Humankind is now facing a global crisis. Perhaps the
sober statements by Health Minister Gan Kim Yong biggest crisis of our generation. The decisions that
epidemic curve is very useful, because we avoid
overwhelming our hospitals with a surge of cases,
Coronavirus: Upward trajectory
and we buy ourselves time – time that will be or flattened curve?
very useful because over the longer term, we may
have better treatment, better anti-viral drugs and, Cumulative confirmed Covid-19 cases in selected countries
eventually, a vaccine may be in place.” from day 1 to 40 after 100+ cases
In Asia, countries such as South Korea and China Italy US Spain
China have been able to successfully flatten Germany France Britain South Korea
the curve – at least till now – through early
intervention and stringent measures. 200,000
Singapore, Hong Kong and Taiwan have also 188,530
managed to keep the number of cases relatively
lower, but recent spikes in those places suggest 150,000
that they are still at risk.
The situation looks grim for South-east Asian 105,792
countries, however, with experts predicting 100,000 95,923
more than 70,000 Indonesians to be infected by 71,808 79,251
Ramadan in late April.
Globally, several countries are still at the 52,128
50,000
“take-off” stage of the curve, running the risk of
overwhelming the capacity of its healthcare systems 25,150 9,661
and reaching extreme numbers of confirmed cases,
if they fail to take adequate measures to flatten 0
their epidemic curves (see infographic 2). 1 10 20 30 40
– CNBC, Interaksyon, New York Times, The Jakarta Post,
The Mercury News, The Washington Post Infographic 2 NOTE: As of March 31 Source: STATISTA STRAITS TIMES GRAPHICS
11Virus cell hijack Step-by-step process of how a retrovirus enters the cell of a living host, replicates and spreads on
Virion Schematic diagram
A single Nucleocapsid
Envelope protein particle of 6 Budding
a virus Holds RNA, genetic
material New virions burst out of cell
These can then infect new cells
Membrane nearby or escape as droplets
Host cell
protein The virus is cleared when the
1 Attachment host’s immune system produces
antibodies to clear out the invader
Spike proteins attach
to host cell with a
Spike protein suitable receptor
2 Penetration The host cell can be
altered during the
Cell engulfs process, or destroyed
the virus
4 Replication
3 Uncoating
Virus genome replicates
Virus releases RNA and uses the mechanism The symptoms of a
of the host cell to make viral disease can derive
RNA enters new proteins from the damage to
cell nucleus host cells and the
immune response of
5 Assembly the host organism
Proteins assemble
into new virions Source: AFP
people and governments take in the next few weeks well as opportunities.
will probably shape the world for years to come. A prolonged economic slump could also force a
“They will shape not just our healthcare systems restructuring of companies and industries in ways
but also our economy, politics and culture. We must we might not yet have imagined.
act quickly and decisively. We should also take into After months of being cooped up at home, will
account the long-term consequences of our actions.” people want to rush out to eat and be merry, head
Some troubling signs are already emerging. The back to the shops, cinemas and gyms, or seek to
current US-China tensions look set to intensify. Mr roam the world, as before? Or would they have grown
Trump, by his repeated references to the “Chinese enamoured of the joys of online deliveries, streaming,
virus”, is setting up a bogeyman, to whip and stir and other new ways to stay happy and healthy?
up his electoral base, by pinning the fallout from Having been kept away from their offices, will
the disease on China. workers long to return to the social chatter of
But the notion that China should be blamed, and water-coolers and pantries? Will they prefer those
be expected to apologise for the so-called Wuhan interminable meetings and long business lunches
virus, is ludicrous. Equally, so too is the suggestion to working at home, with family and kids close
that it should be thanked for the way which it at hand? Conversely, would bosses conclude that
worked aggressively to bring it under control. tele-working can be just as productive, requiring
That would be like suggesting that the US should less expensive office space, business travel, and –
be asked to apologise for setting off the 2008 financial shudder the thought – a lower headcount?
crisis – which it did not wish on itself or anyone Who knows? At the moment, it is hard enough
else – or thanked for the decisive way it dealt with it. to predict what will happen next week or month,
Both are equally pointless propositions, though let alone next year and beyond.
each has its share of boosters. What is clear is this: It is best not to assume a
Given the triple-fold crisis at hand, and the return to the status quo ante before the dawn of
urgent need for global cooperation to tackle this, a this blighted Year of the Rat in late January, which
“with-me-or-against-me” world, split uncomfortably also marked the arrival of the first cases of the new
between the US and China, is in no one’s interests. coronavirus in Singapore.
Even so, supply chains, which had already begun Straight-line projections from the past into
to be reshaped because of the trade spat last year, the future have already proven hopelessly wrong.
will come under further scrutiny, amid a growing Assuming that things will resume from where they
concern over the commercial and strategic risks were, after a long, painful period of disruption, as
of being overly dependent on any one source. The we are now all living through, is likely to be as
changes that follow will bring both challenges as misguided and fanciful.
12 AsianInsider April 2020Cover Story
It’s not just an
economic crisis
– it’s a war
Experts say drastic steps like
having governments act as
buyer of last resort to save
firms, jobs, will be needed
WE’RE NOT JUST DEALING WITH AN ECONOMIC
crisis, say growing numbers of economists, when
asked how to respond to the Covid-19 pandemic.
This is a war, and it has to be fought on a war footing.
With infection rates rising exponentially and
lockdowns, travel bans and social distancing
measures spreading everywhere, most economic ST ILLUSTRATION:
activities – other than the provision of essential MANNY FRANCISCO
goods and services – have all but stopped.
Economic projections of even just two weeks
earlier are rapidly becoming obsolete. A global
recession is now the baseline forecast. Europe and
Japan are almost there already. With unemployment But with monetary policy options almost
skyrocketing, the United States is on track to follow; exhausted, countries have started to unleash their
the majority of economists polled recently by the fiscal firepower. Across Europe and East Asia,
University of Chicago’s Booth School of Business governments have rolled out massive spending
predict a “major recession”. programmes and rescue packages, including loan
The GDP growth forecast for China this year has guarantees for companies.
been slashed to below 3 per cent – less than half of last The US, which passed a US$8 billion (S$11.5
year’s. Projections of other countries’ growth rates are billion) emergency Bill in March focused mainly
being downgraded. For Singapore, DBS Bank predicts on health-related spending, is now considering a VIKRAM KHANNA
the economy will shrink by 0.5 per cent, the lower- US$1 trillion package which could include over Associate Editor
bound of the Government’s forecast of minus 0.5 US$200 billion in loans for troubled firms and cash
per cent to 1.5 per cent. This, too, may be optimistic. payments of US$1,200 to every adult and US$500
Four former International Monetary Fund for every child. There may also be a separate US$1
(IMF) chief economists say the only question is trillion to help small firms.
how deep and prolonged the global recession will All these initiatives seem dramatic and are bigger
be. The economic shock will be bigger than the than those rolled out in response to the global
2008 financial crisis, they say, and an economic financial crisis. But even they might not be enough.
depression can’t be ruled out. For example, on the monetary side, ultra-low
interest rates and quantitative easing measures vikram@sph.com.sg
AN AGGRESSIVE RESPONSE will give banks easier access to liquidity. But as
Encouragingly, the response is now aggressive. economist Danny Leipziger of George Washington
The Federal Reserve in the United States has cut its University has pointed out – and which has also
benchmark Fed Fund rates to near zero, flooding been borne out by the experience of the euro zone
the market with liquidity, and expanded its bond- and Japan, where rates have long been negative – it
buying programme, as has the European Central doesn’t ensure that banks will increase lending.
Bank. Other central banks have also cut rates. On the fiscal side, loans will help tide firms over
13A person sitting on the
steps of the Lincoln
Memorial on the National hard times, but will not replace the losses they will so-called “front-line” sectors such as airlines, hotels
Mall in Washington. The suffer from business shutdowns – and those loans and restaurants.
Federal Reserve in the
will need to be repaid, which will hurt companies It will also affect, for instance, companies that
United States has cut its
benchmark Fed Fund rates down the road. Loans with partial government supply fuel to the airlines, laundry services to the
to near zero, flooding the guarantees will be more helpful but still inadequate. hotels and food items to the restaurants, and to
market with liquidity, and The experience with such loans is mixed. For example, their suppliers in turn.
expanded its bond-buying SMEs in Singapore have pointed out that banks Professor Saez has an even more radical proposal,
programme, as has the
European Central Bank. charged them high rates even when the Government suggesting the government act as a “buyer of last
PHOTO: BLOOMBERG guaranteed more than 50 per cent of repayments. resort”, replacing the demand that evaporates because
Showering individuals with cash – the “helicopter of the crisis. So, for example, if a business loses 80 per
money” option being considered by the US – will cent of its revenue, the government should replace
be popular and help them pay urgent bills. But that lost revenue for the duration of the crisis, on
economists like University of California at Berkeley’s condition the firm does not retrench. It should also
Emmanuel Saez say it would be poorly targeted – too compensate the self-employed for lost earnings. This
little for people who lose their jobs and unnecessary way, firms that were viable pre-crisis will still be so
for those who don’t. And it won’t assure the newly after it, and workers will be able to keep their jobs,
On the fiscal unemployed that they will have jobs to go back to even if there is currently no work for them. This would
side, loans when the pandemic passes and the recession lifts,
will help tide especially if their firms go bust in the meantime.
firms over hard
INCOME SUPPORT
US Federal Reserve
times, but will
Some economists favour income-support steps
not replace that go beyond one-off transfers. For instance, 5
%
the losses Professor Leipziger proposes government-supported,
they will suffer interest-free credit card purchases for essentials like
4
from business food and rent, as well as mandatory mortgage grace
periods for those affected by the crisis. 0-0.25%
shutdowns The New York Times financial journalist and 3
- and those author Andrew Ross Sorkin goes further, proposing
loans will need that the government provide all companies, big and Benchmark
2
to be repaid, small, as well as self-employed workers, interest- interest rate
free bridging loans guaranteed for the duration of Upper limit
which will hurt the crisis, to be paid back over five years. But as a 1
companies down condition, companies must retain at least 90 per cent
the road. of their workers at the same wage as before the crisis.
This would keep almost everyone employed and 0
there would be no need for the government to try 2006 ‘08 ‘10 ‘12 ‘14 ‘16 ‘18 2020
to pick the losers. This would be difficult anyway –
the impact of the crisis will be felt far beyond the Source: AFP STRAITS TIMES GRAPHICS
14 AsianInsider April 2020All-out efforts to stimulate
Economic downturns in Singapore economies with cash
HISTORICAL GDP GROWTH
Manufacturing Asian Dotcom Global Here’s a look at what regional governments
recession financial
crisis
bust financial
crisis
are doing to pump up their economies:
%
16 SINGAPORE INDONESIA
12 Covid-19 Deputy Prime Minister Heng Swee Indonesia announced a stimulus
outbreak
8 Keat introduced a supplemen- package on Feb 25 amounting to:
-0.5%
tary budget amounting to $48.4 10.3 trillion rupiah (S$1 billion).
4
billion on March 26, on top of the
0 $6.4 billion in measures that was SOUTH KOREA
-4 announced in February to cush- South Korea announced a stimulus
’80 ’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20* ion the fallout from the Covid-19 package on March 5 to be channelled
outbreak. In all, Singapore will be into the health system, childcare
ANNUAL RETRENCHMENTS dedicating nearly $55 billion to and outdoor markets amounting
Number of people (’000) combat the coronavirus – about 11 to: 11.7 trillion won (S$13.7 billion).
per cent of its GDP.
Asian financial Dotcom Global financial
crisis bust crisis THAILAND
24,500 MALAYSIA Thailand’s Cabinet approved a stim-
30 Malaysian Prime Minister Muhyiddin ulus package on March 10 to help
Historical Yassin on March 27 announced the alleviate the impact of the corona-
average
20 country’s largest economic stimulus virus epidemic on already-faltering
package to date, with RM250 billion domestic activity amounting to an
(S$83.6 billion) to be channelled estimated: 400 billion baht (S$17.6
10
towards supporting the people and billion).
businesses. The package is on top of
0 earlier announcements to pump in JAPAN
’97 ’00 ’05 ’10 ’15 ’20* over RM20 billion to the economy. Japan is considering an emergency
*Forecast economic package of about 30
Source: DBS STRAITS TIMES GRAPHICS CHINA trillion yen (S$390 billion).
China is set to unleash trillions
of yuan of fiscal stimulus to spur HONG KONG
infrastructure investment. Spending Hong Kong leader Carrie Lam said
be the best way to ensure the economy will rebound will be backed by as much as: 2.8 on Feb 18 said the government
when the crisis is over. Any halfway measures would trillion yuan (S$572.5 billion) of would increase handouts to tackle
not be able to prevent mass liquidations and large- local government special bonds the coronavirus outbreak amounting
scale job losses. and the national budget deficit ratio to HK$28 billion (S$5 billion).
could rise to record levels.
NEVER MIND THE COST PAKISTAN
Such a scheme would be costly. Prof Saez INDIA Prime Minister Imran Khan an-
estimates that for the US, if demand falls by 40 India announced on March 26 a nounced a rescue package on March
per cent over three months, it would lead to a loss 1.7 trillion rupee (S$32.49 billion) 24, to support sectors across the
of 10 per cent in annual GDP. That’s what it would financial package, comprising direct country amounting to 1.13 trillion
cost the government. That is huge, but would need cash transfers and free food, to help rupees (S$10 billion).
to be weighed against the future cost arising from the nation's poor weather the global
mass bankruptcies and layoffs. downturn. Sources: Reuters, Japan Times
At this time of crisis, cost should be a secondary
consideration.
As former IMF chief economist Kenneth the risks of under-reacting – a destruction of the
Rogoff noted: “The whole point of having a sound economy’s productive capacity and large-scale
government balance sheet is to be able to go all-out unemployment.
in situations like this, which is tantamount to a war. Singapore’s policymakers are pulling out all the
Countries that are not able to do this will suffer not stops, with Deputy Prime Minister Heng Swee
just in the short run, but in the long run.” Keat on March 26 announcing a $48.4 billion
Whatever the policies chosen, the best advice (supplementary) “Resilience Budget”, with President
is to think big and err on the side of excess, not Halimah Yacob giving in-principle approval to draw
caution. This is a dangerous and uncertain time. up to $17 billion from the nation’s past reserves.
The costs of overreacting, essentially a temporary What we are facing now is much worse than even
blowout of budget deficits, would be small against a thunderstorm. It’s a war.
15An assembly line at a
car plant of Dongfeng
Honda in Wuhan, Hubei.
IMF Managing Director Manufacturers, exporters braced for disruptions
Kristalina Georgieva has
said that the outlook for
global growth is negative
and the IMF now expects EXPORTERS AND MANUFACTURERS IN ASIA MAY by 0.5 per cent this year, the first full-year recession
“a recession at least as suffer a new wave of supply-chain disruption even since 2001.
bad as during the global as the lockdown eases in China. To cushion the economic slide, governments
financial crisis or worse”.
PHOTO: AFP
The latest supply shock is adding to the gloomy are rolling out large fiscal aid packages, and central
outlook for global goods and services demand amid banks are cutting key interest rates and pulling out
volatile stock, credit and currency markets. all the stops to allow the flow of capital, in order to
In Singapore, where non-oil domestic exports maintain financial stability.
(Nodx) have been on a declining trend since But the measures they are taking to quarantine
late 2017, outward-oriented sectors such as the spread of the Covid-19 disease are cancelling
manufacturing and wholesale trade are likely to out the effectiveness of their policy actions.
OVAIS SUBHANI be the worst hit. The impact of restrictive measures on trade,
Senior Correspondent “There are emerging signs of a recovery in China’s investment, consumption and travel is depressing
supply chains,” said DBS Bank economist Irvin Seah consumer spending and overall demand, pushing
in a phone interview on March 19. “But data in the global economy towards a sentiment-driven or
coming months will start to reflect the impact of self-induced recession.
countrywide lockdowns and border closures (that) Analysts are worried that if the pandemic does
governments around the world have enforced and not abate in the coming weeks and months, it may
the business continuity plans companies there have trigger a string of defaults and bankruptcies, not
put in place.” just in Asia, but across the world.
The result of these measures will be a sharp The anxiety over new holes in the supply chain
osubhani@sph.com.sg contraction in global demand, which will put and an overall compression of global demand is
a dent in near-term prospects for exports and being reflected in financial markets worldwide,
manufacturing, he added. making possible business failures become a self-
Mr Seah expects the local economy to contract fulfilling prophecy.
16 AsianInsider April 2020IMF sees coronavirus pandemic causing global
recession in 2020, recovery in 2021
WASHINGTON – THE CORONAVIRUS PANDEMIC
will cause a global recession in 2020 that could be
worse than the one triggered by the global financial
crisis of 2008-2009, but world economic output
should recover in 2021, the International Monetary
Fund said on March 23.
IMF Managing Director Kristalina Georgieva
welcomed extraordinary fiscal actions already taken
by many countries to boost health systems and
protect affected companies and workers, and steps
taken by central banks to ease monetary policy.
“Even more will be needed, especially on the
fiscal front,” she said.
Dr Georgieva issued the new outlook after a
conference call of finance ministers and central
bankers from the Group of 20 of the world’s largest
economies, who she said agreed on the need for
solidarity across the globe.
“The human costs of the coronavirus pandemic
are already immeasurable and all countries need
to work together to protect people and limit the IMF Managing Director
economic damage,” she said. severe, but the faster the virus stops, the quicker Kristalina Georgieva
speaking at a joint press
The outlook for global growth was negative and and stronger the recovery will be,”she said.
conference on March 4. She
the IMF now expected “a recession at least as bad as Dr Georgieva said the IMF would massively step has welcomed extraordinary
during the global financial crisis or worse,” she added. up emergency finance, noting that 80 countries have fiscal actions already taken
Earlier, she had said that a recovery was expected already requested help and that the IMF stood ready by many countries to boost
in 2021, but to reach it countries would need to to deploy all of its US$1 trillion (S$1.4 trillion) in health systems and protect
affected companies and
prioritise containment and strengthen health lending capacity. workers. PHOTO: AFP
systems. “The economic impact is and will be – Reuters
A pedestrian wearing a protective mask walking past shuttered stores on Hollywood Road in Hong Kong. With infection rates rising exponentially and
lockdowns, travel bans and social distancing measures spreading everywhere, most economic activities have all but stopped. PHOTO: BLOOMBERG
17A slowdown in passenger Aviation gloom doom
traffic due to the
coronavirus has forced
several US airlines to
park their planes in
southern California.
PHOTO: GETTY IMAGES. Most airlines could become
bankrupt before June is here
VEN SREENIVASAN Airplanes are grounded, As Mr Shukor Yusof of aviation-centred Endau
Analytics tersely notes, all this seems surreal, given
Associate Editor
shipments are stalled, hotels that just three months ago, in December last year,
and restaurants are empty. the International Air Transport Association (Iata)
was expecting the airline industry to register a net
The coronavirus has wreaked profit of US$29.3 billion (S$42.3 billion) this year.
havoc across the economy. “The industry was to have posted its 11th
consecutive year of profitability this year,” Mr
Here’s a look at key sectors Shukor, the managing director of Endau Analytics,
ven@sph.com.sg
that have been badly hit points out. “Who could have foreseen the speed
with which Covid-19 overturned the sentiment
towards air travel in the past fortnight, leading Iata
FOR AN INDUSTRY ALREADY STRUGGLING WITH to revise its positive forecast to a staggering loss of
the unpredictable cost of fuel, over-regulation, US$113 billion for 2020?”
nationalistic obstacles and criticisms from climate Indeed.
activists, the coronavirus is the cruellest – and As late as November last year, the biggest
possibly fatal – blow. challenge the industry was facing was the loss of
A dramatic fall in demand resulting from unprece- environmentally conscious passengers to other
dented border shutdowns across the world to contain modes of transport claiming lower emissions.
the pandemic is threatening to take out almost half Over the past year – just as fuel costs seemed to
the global carriers, according to some estimates. be supportive of growth – the industry was being
18 AsianInsider April 2020lambasted by climate activists led by Swedish teen airline has been forced to cancel scores of flights to
environmentalist Greta Thunberg for its carbon China, North-east Asia and Europe, while its senior
emissions. The growth of flygskam, or flight management is taking huge pay cuts, as many of
shaming, has seen thousands of European travellers its crew are furloughed at home.
migrating from planes to trains for travel. Airports in Just north of the border, Malaysia Airlines was
the Nordic regions and Germany have seen a marked already looking for handouts in the region of RM1
decline in travellers over the past year, while train billion (S$330 million) annually to stay afloat. Covid-
stations have been filling up. 19 could simply be the straw that breaks its back.
Still, the past few years have generally been To say this is the worst crisis ever for the industry
good for airlines on the back of strong and steady would be a huge understatement. Iata has just
demand for air travel. Yields have also held up, This is how the Sydney-based aviation think-tank released an
thanks to muted fuel prices and a growing appetite Centre for Aviation (Capa) put it: “As the impact updated report
for premium seats. As a result, the financial numbers of the coronavirus and multiple government travel
have been quite robust. Revenue per passenger per reactions sweep through our world, many airlines
noting that
kilometre, or RPK (the common measure of top-line have probably already been driven into technical beyond the top
income), has risen just over 6 per cent year on year bankruptcy, or are at least substantially in breach 30 players, all
since 2017. Net profit growth for global airlines as of debt covenants. Cash reserves are running down other airlines
a whole rose by between 4 per cent and 5 per cent quickly as fleets are grounded and what flights there have weak
annually during the past three years. Profit margin are operate much less than half full. By the end of May
has stayed at around 7 per cent of total revenues 2020, most airlines in the world will be bankrupt.” balance sheets,
since 2017, delivering a return on investment of Iata has just released an updated report noting high debt and
just above 8.5 per cent. that beyond the top 30 players, all other airlines barely enough
The situation today is starkly different. have weak balance sheets, high debt and barely cash to cover
enough cash to cover three months of operations.
BIG NAMES GROUNDED In short, most of the world’s airlines could be three months of
Top-tier global names like Qantas, United bankrupt by June. operations.
Airlines, British Airways, Cathay Pacific, Korean Coordinated government and industry action is In short, most
Airlines, KLM and a dozen others have all but needed immediately if a global aviation catastrophe of the world’s
grounded their entire fleets. Staff and crew have is to be avoided. American carriers are already asking
for over US$50 billion from Washington. Germany
airlines could
been furloughed, and forced to take partial or no-
pay leave. Given the disappearance of demand and and half a dozen other countries have also indicated be bankrupt by
the cash-flow crunch, many regional discount and they will provide financial lifelines to their carriers. June.
low-cost carriers may never see the light of day, And they should.
even after the pandemic is over. Aviation, like it or not, is the lifeblood of global
Jetstar Asia has grounded its entire fleet, while, commerce and connectivity. Yes, it has serious
in Europe, Easyjet and Ryanair are doing the same. issues to address on the carbon emissions front.
Britain’s FlyBe is already history. Serious efforts are being made to address these
Even erstwhile stronger players like Singapore through alternative fuels, more efficient engines,
Airlines are struggling to maintain positive cash carbon offset markets, electric power systems, fuel-
flow. There is a very real danger that the iconic saving routings and emission taxation.
multiple award-winning carrier’s gearing will hit Also, this is an industry ruled by archaic
its upper limits by this month, forcing it to go and nationalistic ownership and air rights laws
cap-in-hand to the Government for funding. The established some 75 years ago which prevent market
Coronavirus could cost airline industry US$113 billion
Passenger revenue losses in 2020 in US$ billion for a worst-case coronavirus scenario*
ASIA-PACIFIC EUROPE NORTH AMERICA MIDDLE EAST
49.7 37.3
Other
21.1
7.6 6.6 4.9 2.3
Australia, China, Japan, Other Austria, France, Italy, Other Bahrain, Iraq,
Malaysia, Singapore, Germany, Netherlands, Iran, Kuwait,
South Korea, Thailand, Norway, Spain, Sweden, Lebanon, UAE
Vietnam Switzerland, Britain
NOTE: *Iata revised overall total to avoid double counting, giving a global figure of more than US$113 billion. Source: AFP STRAITS TIMES GRAPHICS
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