State Intervention Necessary to Overcome Covid-19 Threats

By Vladimir Popov and Jomo Kwame SundaramBERLIN and KUALA LUMPUR, Mar 19 2020 (IPS) It is now clear that most East Asian government responses to novel coronavirus or Covid-19 outbreaks have been effective. In Hong Kong, Japan, Singapore and Taiwan, the number infected have remained relatively low despite their proximity and vulnerability, while containment in China and South Korea has been impressive. Vladimir PopovSome other countries hit by the Covid-19 pandemic are trying to replicate East Asian policy responses, not only in public health, but also in handling economic contraction. More than two decades after the 1997-1998 Asian financial crises, some media are praising East Asia again. Structural recession? The contraction is largely due to the government lockdowns to ensure ‘social distancing’ to check the spread of the virus. Mainstream economists call this a structural or supply side recession, to be overcome by expansionary fiscal and monetary policy, predicted to trigger higher inflation. Less work has reduced incomes and hence demand. To make matters worse, share price collapses have also reduced wealth income. The crisis also offers an opportunity to reallocate resources, among industries and services, or even spatially, from one region to another. While the pandemic has hit some activities far more than others, e.g., travel, tourism, retail, events, restaurants, entertainment, schools, universities, etc., the crisis offers an opportunity to shift resources ...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Asia-Pacific Development & Aid Economy & Trade Financial Crisis Global Headlines Health Labour TerraViva United Nations Trade & Investment Source Type: news