Pandemic Co-ordination and Response
Over the last decade, the G20 agenda has consistently included the price of oil, climate change and nuclear weapons. So towards the end of the year China reported a pneumonia outbreak in its Wuhan Province to the World Health Organisation, it was clear that G20 plans for 2020 would change. Within days, COVID-19 became the most searched word on Google, dominating global news headlines. The disruption to the G20 agenda caused by the virus may yet have an unexpected consequence: positive multilateral action on climate change as COVID-19 lockdowns clear pollution in China, India, Europe and the United States. Yet while the earths climate heals this cannot eclipse the daily rise in global human fatalities.
While visibility of the earth from the International Space Station may be improving dramatically, the pandemic is still overwhelming the mitigation measures enacted by many G20 nations. On 11 March 2020, the WHO officially declared COVID-19 a ‘Pandemic’, allowing the international community to finally take action to close borders and limit international travel with a view to slowing the spread of the contagion. A mere two weeks after the announcement, most the G20 nations admitted they were not properly prepared for a pandemic due to lack of equipment, appropriate procedures, medications and hospital facilities.
G20 nations have since utilised their relationships to share data and information concerning the spread, allowing their neighbours to better prepare themselves. The relative transparency in sharing data to model the spread of the virus has allowed private sector scientists as well as national and international disease control agencies to examine trends and simulate outcomes, but this international cooperation has certainly not been without its challenges.
China has been accused of not reporting numbers for untested home deaths which, in turn, has been blamed in large part for the huge rise in COVID-19 home deaths in both Italy and Spain. China has certainly also been given a hard time by nations such as France, the United Kingdom and the United States for both its initial recalcitrance in reporting the outbreak and its lack of transparency in the data it shared with the WHO. Yet these criticisms also sought to shift the scrutiny away from these countries’ less than stellar performance in combatting the pandemic.
G20 nations were faced the highest risk of economic collapse, as such the soveriegns have worked together to synchronize their monetary policy. The Chinese Government lowered their interest rates and also allowed businesses interest-free loans for the next quarter to help the country absorb the shock of the economic lockdown.
The United States reduced their Federal Reserve rates to near zero, followed by the United Kingdom and EU nations. The next phase was a deluge of quantitative easing on monetary policy, printing money and putting it into the economies to cushion the inevitable global decline. This was a vital step in synchronizing currencies’ devaluation so that the prices of key commodities such as oil, corn, raw material and rice were stable, ensuring the ability of the international community to procure key survival goods during the lockdown. This was the first time the G20 nations utilized their central banking systems to work hand-in-hand to avoid the short-term shocks which might otherwise ripple across other non-G20 nations’ economies.
Privately-owned technology companies from the United States, such as Google and Apple, collected mobile phone data to track and quantify the effectiveness of the lockdown measures against the spread of the virus. These models helped justify the United States closing its border and limiting air travel and also provided the relevant data to assist Japan in its decision to defer the 2020 Olympics to 2021.
South Korea’s transparency and superior COVID-19 testing regime smashed the pandemic peak early in the county and suppressed the nation’s death toll. This approach later helped Germany to implement similar measures and lockdown their population even before the WHO’s pandemic announcement. Germany’s success in combatting the pandemic so far is in large part due to their use and application of data and information to forecast and implement appropriate mitigation measures against the spread of the pandemic.
Italy, which has been hit hardest in terms of death toll, was able to share vital information regarding the availability and specification of specialist medical equipment such as ventilators. Their experience allowed other countries to lever industrial expertise, 3D-printing technologies and mass production to fast-track the production of ventilators to combat equipment shortage. Companies such as Tesla, Rolls Royce, AirBus and Formula 1 were able to weigh in on innovative designs and bring these to immediate production.
The next phase in this international collaboration is the development of a suitable and effective vaccine to finally defeat the contagion. The French biotech company, Sanofi, and the UK’s GlaxoSmithKline joined forces to fast track vaccine trials while Germany’s BioNTech and US powerhouses J and J and Pfizer are collaborating with niche biotech companies on vaccine trials which it is hoped will accelerate vaccine approval.For once, the race for a vaccine is not being driven by financial objective but rather global co ordination to combat an international scourge.
About the author(s)
Alex Koh is an independent analyst, writer, and economist. Harold Alby is a managing director and chief operating officer at Inova Capital. Justin Inniss is a managing director at Inova Capital.For more details on our insights please get in touch with us at Inova Capital AG on +41 415616905. Inquire about our ideas and nowcasting capabilities.