Interpreting COVID-19's Third Wave

The Luohan On Air Recap: Preparing for COVID-19's Coming Third Wave

COVID-19 has given our global community a stark reminder of the fragility of life. Its first and second waves shocked even the wealthiest of nations. As Europe and the US are still in the process of beating back the virus and its economic impact, its third wave, directed towards Global South nations, might prove most deadly in terms of the number of deaths as well as the economic challenges and supply chain pitfalls. The COVID-19 solution is multi-pronged and will take a global effort. It requires unprecedented cooperation across countries and disciplines. It is for that reason why Luohan Academy, invited panelists from a diverse set of backgrounds aiming to discuss how wealthier countries and groups such as the G20, the IMF, and the World Bank can support the Global South amid COVID-19's third wave.

The panelists featured, senior policy researcher and Tang Chair in China Policy Studies at the RAND Corporation, Jennifer Huang Bouey. An epidemiologist by training, Bouey's research centers on global health strategies and social determinants of health. Joining Bouey from Rand was Rafiq Dossani is director of the RAND Center for Asia Pacific Policy, a senior economist at the RAND Corporation, and a professor at the Pardee RAND Graduate School.  Representing Luohan Academy, was Columbia University professor and former ADB economist, Shang-Jin Wei and Luohan Academy's Executive Director, as well as Hupan School of Entrepreneurship Executive Provost, Long Chen. Hosting the online panel was CGTN's business anchor Cheng Lei.

During the conversation, the panelist posed and answered questions that centered around mitigating the impact of the third wave.

As Jennifer Bouey suggested during the webcast, "until we are all safe, no one is safe." It is a strong message of solidarity as COVID-19 continues its deadly spread and is a call to action for countries to lend a helping hand to weaker and less developed countries. Chen likened emerging economies to the Small and Medium-Sized Enterprises (SME) that are the backbone of any economy. In this regard, if they fail so we all fail. While each panelist wasn't shy in stating the danger, but they were also full of promise and creative solutions. Bouey suggests that any solution must be transparent, efficient, and agile (TEA).  Transparency meaning clarity between the public and private sectors and the government and their citizens. Efficiency is how fast you can ensure the necessary testing, medical supplies, and treatment. Agility means that the government needs to monitor trends very carefully and be agile in terms of changing the policy if something is not working.

In this respect, Shang-Jin Wei emphasized the need for financial assistance to households and firms that are most vulnerable. Stating “many countries, perhaps, does not have the domestic capacity to produce the PPE, the personal protective equipment, the way China and the US can, so they need to have an international dimension to get those things. So those two sets of issues that we have to think about in terms of the right strategy.”

However, Dossani somewhat disagreed is this aspect emphasizing that there is a limit to how much support you can give. "Because if you don't have sound health systems in a country, you have fragile institutions, corruption, compliance issues, the record shows you can only do so much. Flooding a country with funds doesn't necessarily buy you a whole lot of time."

In terms of financial support, the epidemic has made emerging developing countries' already in debt more vulnerable. According to the analysis, the domestic debt problem is relatively easy to solve, and the central bank can temporarily monetize the debt. But international obligation requires assistance from creditor nations to get out of the immediate crisis. In recent years, China has become one of the largest creditors of developing countries, Wei stated that China is fully capable of playing a vital role in this regard and will win enormous goodwill in the international community.

Also, when compared with European and American countries, experience has shown that weaker counties facing governance problems and soft economic structures often face liquidity leakages. Therefore, vulnerable countries will not implement fiscal stimulus efforts. However, with international cooperation, large stimulus packages could be a viable option.

While there was consensus that global cooperation is very much needed, one situation where there was disagreement was what form the collaboration might take. For example, while all guests believed that a vaccine is very much needed to tackle COVID-19 for good, they were split in terms of if there should be joint-cooperation in finding a vaccine. Wei believes that research organization needs to share their knowledge, while Dossani thinks that there needs to be more competition, stating "let 120 trials flourish."

In the future, many of the experts hypothesized that the post-COVID world would still be economically interlinked but more regionalized, especially in terms of health and medicine. All the experts agreed that a new "type of thinking and innovation" was needed for which Dossani hypothesized:

"New kind of thinking will not come from coordinated initiatives with the west; it has to be coordinated initiatives from the east saying "yes let's work together with other countries in Asia, wherever else we can maybe ‑‑ don't be particular, but look at problems rather than geography as your basis for collective leadership and I think that can be powerful."

Besides these two areas of disagreement and debate, the four panelists exhibited the same type of cooperation needed to fight this virus the right way. Cheng Lei beautifully wrapped up the webcast with one silver lining that "horrible environments might produce some of the world's best innovations."

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