Global authorities have downplayed the health and economic threat of coronavirus — until now

Global authorities have downplayed the health and economic threat of coronavirus — until now


March 14, 2020 06:38:12


China expanded sweeping efforts to contain the viral disease by extending the Lunar New Year holiday. (Reuters: Bobby Yip)

In a pandemic, truth and transparency matter.

International leaders including (but not limited to) China, Iran and the United States, have for weeks either withheld information, spread misinformation or consistently played down the threat of coronavirus.

As global infections and deaths continue to rise, share markets dive and economies falter towards recessions, it’s clear all is not fine, and may not be for some time.

As of Friday, the World Health Organisation (WHO) put the number of coronavirus cases globally at more than 125,000, with the number of deaths approaching 5,000.

China was the first to learn what happens when the public is denied information.

Initially its citizens, like Wuhan doctor and whistleblower Li Wenliang who has since died from the virus, were silenced when they tried to alert others to the danger.


Chinese doctor Li Wenliang, who tried to warn people about the coronavirus outbreak, died after contracting the virus. (Weibo)

Officials in China had talked down the severity of the virus, saying it likely couldn’t be transferred between humans, when they had cases that strongly suggested it could, including the infection of 14 hospital workers.

China’s Government did eventually lock down the country and its economy. But it should have been openly sharing information since December, when Wuhan reported the first cluster of patients carrying an unknown pneumonia virus.

China has since been praised by the WHO for being transparent and collaborative in fighting the outbreak in Wuhan and slowing down its spread.

Despite that, almost 81,000 of the globe’s infected people still reside in China, with Friday’s WHO figures showing its death toll has now topped 3,000.

Then there are leaders peddling misinformation: On Friday, as Akbar Velayati, one of the closest aides to Iran’s Supreme Leader Ayatollah Ali Khamenei, went into quarantine, Khamenei said the virus could be part of a “biological attack”.

His comments came after authorities reported the number of coronavirus deaths in Iran had reached 63 as of March 11.

And finally, there are those who have for weeks argued the risk has been overblown.

US President Donald Trump is a case in point. Days before announcing the European travel ban, he said media reports on the virus were “fake news”.

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@realdonaldtrump The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant. Surgeon General, “The risk is low to the average American.

Such messages from world leaders would be comical if the consequences were not so fatal.

Public events, mass gatherings will be cancelled

When citizens get spooked, and feel they cannot trust their governments, they fight back.

They also behave more erratically.

In Australia, this is not just evident through the micro — people panic buying toilet paper and stripping national supermarket shelves of medicines, hand sanitizers, canned goods and bottled water.

It’s also evident through the macro — Wall Street suffered its worst day in more than 30 years on Friday and the local share market shed 22.7 per cent of its value in the past three weeks, staying firmly in bear-market territory.

The Prime Minister Scott Morrison had previously said Australians should still head to the footy this weekend, but health experts swiftly hit back.

Mr Morrison’s tone quickly shifted by Friday, after news hit that the Australian Formula 1 Grand Prix in Melbourne was cancelled following updated medical advice from Victoria’s chief health officer.


Fans start to arrive at the Australian F1 Grand Prix in Melbourne on March 13, 2020 amid reports the event will be cancelled. (ABC News: Simon Tucci)

Mr Morrison that afternoon took the advice of the national chief medical officer to cancel gatherings of more than 500 people and advised Australians against travelling overseas unless it was essential.

For now, the cancellation was “precautionary”, Mr Morrison said, and would not be extended to schools, universities, public transport or airports.

Soon after, reports broke that Home Affairs Minister Peter Dutton had been diagnosed with coronavirus.

It may not be long before Australians face unprecedented limitations on their movements.

In major capital cities the virus is now spreading not just by people contracting it overseas and bringing it back home, but by community transmission.

On Friday, NSW reported its biggest jump in coronavirus cases, bringing the total number of confirmed cases in the state to 92, while Victoria reported 36 cases, including its first recorded case of community transmission.

Attorney-General Christian Porter has said biosecurity control orders could be imposed to direct people suspected of carrying the virus to remain in lockdown. This would place strict bans on other mass gatherings include shopping centres and schools.

Businesses, which are already feeling enormous pain, may also have to shut down as the virus spreads.

The outbreak and China bans have already been a massive hit to tourism-related businesses. On Friday Flight Centre announced it was closing 100 underperforming stores, while Virgin Australia cut more flights and slashed its senior executives’ pay.

Businesses that depend on Chinese and other overseas factories have also faced shortages of stock, and this will continue until the virus is contained.


Peter Dutton has been admitted to hospital, having tested positive for COVID-19. (ABC News: Jed Cooper)

Can the economy bounce back?

This week the Federal Government announced its $18-billion stimulus package aimed at fighting the economic threat of coronavirus.

It’s an attempt to prevent Australia from heading into a recession.

But it is important to remember that this is mostly a demand-side measure for something that, until now, had been a supply-side problem. Coronavirus could rapidly turn into a demand-side problem.

The Government’s banking on people spending their $750 payments and businesses with cash injections staying open.

But what if people react differently to what they hope for? Many Australians are likely to self-isolate and already have. Some will decide to pull their money out of the banks.

Many businesses may be forced to shut down and casual workers would be hit the hardest.

The Reserve Bank’s deputy governor Guy Debelle may be far too optimistic in predicting interest rates cuts and stimulus will help the economy bounce back.

He estimated coronavirus would detract half a per cent off Australia’s growth in the March quarter but didn’t give a figure beyond that period, because in a world of unknowns the RBA knows the economic impact could be far more catastrophic than it hopes for.

For Western governments there seems to be an inherent conflict between, on the one hand, acting swiftly and imposing mass shutdowns to protect people’s health, and on the other, restricting people’s freedom and destroying the economy in the process of doing so


Guy Debelle said even if interest rate cuts were not used by households to spend more, they would eventually feed through to the broader economy. (ABC News: Maisie Cohen)

But if Australia delays swift action, it may end up like Italy, which has an overwhelmed health system that cannot cope — not just with coronavirus but other life-threatening illnesses, leading to more than 12,000 confirmed cases of the virus and a death toll of 827.

With Italy in lockdown, it is now given that the world’s eighth-largest economy will plunge into a steep recession.

Like most other Western nations, Australia has shifted its focus from trying to contain coronavirus to slowing the speed of its transmission.

Political leaders have been taking a softly, softly approach in their messaging: “Don’t panic. No need to cancel your plans. No need to stop going into the office. No need to stop shaking hands.”

We may all need to do this sooner than we think.

Our political leaders and health officials are now starting to be more vocal about that.

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