In early April the Austrian authorities first in Europe, announced plans for the gradual abolition of restrictive measures related to the crisis around Covid-19. It is unclear who else might follow the example of Austria, but it is obvious that a return to normal life will be difficult, writes the BBC.
Experts have begun to predict how it will look when the coronavirus will be able to rein in, and what state was the first out of the economic recession.
Pandemic Covid-19 added to the global economy unprecedented high element of unpredictability. States are trying to fight the infection, going to serious measures, including financial intervention, in an attempt to stabilize markets.
The 10 most resilient economies, according to the “Index of economic security 2019”:
9. Central States of USA
The full list is here.
Although the victory over the virus is not visible, and the priority — the urgent priorities of health care and maintaining at least some economic stability, experts are already trying to look to the future and to understand which countries are the first to be able to restart its economy.
To better understand their predictions, the air force addressed to “the economic security Index-2019” drawn up by the insurance company FM Global.
The index ranks the rating of 130 countries on the viability of their business climate and ability to recover. Estimates are based on such factors as political stability, the success of corporate governance, the conditions for the emergence of risks, perfected the logistics of the mechanisms of trade chains and the transparency of the business environment.
Comparing the rating of a particular country with its initial response to the pandemic, we have identified States that with high probability, will retain the stability and resilience of the economy during the crisis.
Then we talked with the inhabitants of these countries and experts in order to find out how it cope with the situation and what to expect from the nearest future.
The Index, the country occupies the second place, standing out high ratings for control of the supply system and low corruption in government.
In the beginning of the crisis, the government acted decisively, quickly entering social distancing, March 11, closing schools and secondary private enterprises, and March 14, forbidding entry to all foreigners, despite the fact that while there are only a few cases of infection with coronavirus.
Such measures have already proved their efficiency.
“Compared to last year, the incidence of regular flu fell by 70%, which can be considered as a good indicator of the effectiveness of the steps taken by the government,” says Rasmus Christiansen, managing partner in the Copenhagen travel Agency Pissup Tours.
“At first I skeptical they were treated, but after seeing how many States have followed the same path, now I think that our government did everything right.”
The Danes used to trust their authorities and are always ready to unite for a common cause — and this has increased the effectiveness of the measures taken.
“Now in the Danish media and social networks is the new a buzzword — samfundssind (which can be roughly translated as “civic sense” or “civic duty”), and the majority of Danes feel a moral obligation towards society, considering that it should to make a sacrifice for the health of the whole society,” says Christiansen.
“Nobody wants to be accused of actions that endanger the life of the older generation, just because of the fact that he can’t give up their usual comforts”.
However, this does not mean that everything went smoothly. For example, revenues from tourist industry Kristiansen fell sharply. And although he gratefully acknowledges financial assistance from the state (including partial payment of salaries of employees), rules of this aid and translate it into practice are not yet fully developed, which has already led to layoffs and uncertainty.
However, the Danish government measures (for example, payment of 90% of the salaries of hourly workers and 75% of those who are salaried) has already been recognized as a model for the rest of the world. These measures would freeze the economy to better times.
However, the Danish model is expensive, it can cost the country up to 13% of GDP.
In addition, the Danes know that this is a global crisis, and the stability of their economy, no doubt, depends on how the crisis can handle the rest of the world and how they will observe the principles of freedom of trade.
“Denmark, you may be able to obtain a relative advantage, avoiding more serious consequences,” says Christiansen.
In fact, according to the Agency Bloomberg, in the country talking about the easing of some restrictions already for Easter — of course, this will depend on how successful will be the pandemic further.
“In Denmark is a well — developed pharmaceutical industry that can be an advantage, says Christiansen. — However, I will not feel pride for their country, if we start to cash in on the disasters of other States.”
A rating of Singapore (21-e a place in the “economic security Index”) is quite high due to the strong economy, low political risk, excellent infrastructure and low level of corruption.
The government quickly introduced measures to curb the spread of coronavirus, the curve of incidence rate here is one of the most smooth in the world.
“We trust our government, every step in this crisis is quite transparent, — says a local resident Constance tan, a data analyst in the company Konigle. — As a rule, when the government introduces some measures, we observe them”.
However, there are also those who violate the rules of isolation. These are selected of the passport and work permit.
“But overall we work together, we don’t have to worry about that in society may be brewing rebellion, or that people will start dying in the streets, or that there will be destabilization in the economy,” says tan.
Singapore is a small country and the exit from the crisis will depend on the recovery of the world economy, but its inhabitants believe in the happy future of the nation.
“Like most other people, I believe that, having survived this crisis, we will become stronger, says Singaporean Justin Fong. And surely this will lead to the introduction of new technologies that will open up new prospects for Singaporeans”.
Many companies have quickly adapted to the new conditions, adjusting for their employees work from home. And the government has released a mobile app Trace Together, which helps to track the spread of the virus. It downloaded on their smartphones, many Singaporeans.
To more accurately reflect the breadth of this country, in the “Index” it was divided into Western, Central and Eastern regions, and in General, all three occupied a high position in the ranking (respectively 9th, 11th and 22nd places).
To contain the spread of the virus was particularly difficult in such cities as new York. The unemployment rate is already showing record numbers (at the end of March to 6.6 million people), mostly due to the fact that more than half the States everything is closed including restaurants and trading companies, and other businesses that rely on customers walking in from the street.
But the U.S. government quickly adopted stimulus measures to stabilize the economy (the aid package of $ 2 trillion), and introduced social distancing, apparently, had a certain effect. In the end, this should mitigate the impact of a pandemic and allow to quickly restore normal economic life.
Experts at Goldman Sachs and Morgan Stanley predict a V-shaped development of the situation in the economy — first a sharp drop and then a very rapid recovery in the second half of the year.
The McKinsey consultants take a more sober assessments, but still optimistic.
The US economy is important for all other countries, as it is almost a quarter of global GDP , so the global economic recovery greatly depends on how to deal with the United States.
“Generally speaking, the US economy is in a better position to recover from serious crises (…) compared with other economies. The population is on average younger and more mobile than the rest of the world, restrictions on the labour market, usually small, which helps rapid redistribution of the labor force,” said Eric Sims, Professor of Economics at the private University of Notre Dame (USA).
“In the shorter term, we can say that the Federal reserve and the Bank of England (which is still not resorted to the policy of negative interest rates) a little more space than the Central banks of other countries — say, the ECB or the Bank of Japan”.
To accelerate the return to normalcy, the administration of the President of the United States proposed to divide the country into districts, allocating less affected by the virus and are ready for a more rapid recovery in economic activity.
“I believe that these measures are of great importance to create the necessary conditions for rapid growth,” says Peter Earl, fellow of the American Institute for economic research, a nonprofit research think tank.
“We need more free movement of money, goods, services, manpower and ideas — not only within the country but throughout the world,” he said.
The absence of a U.S. system of universal health care has been criticized in the days of the crisis, and this problem will have to wait for its decision, if the country wants to become more protected from these pandemics.
“I think in the end the whole world (and the United States in particular) will emerge from this crisis stronger. But it all depends on what lessons we will learn,” emphasizes Michael Merrill, economist and historian of the development of labour markets from Rutgers school of management and labor relations (USA).
“We will have to invest in new forms of public health and create a sustainable model of social protection and institutional viability, if we want to go back to the society in which they lived a month ago.”
Due to the recent progress in the field of corporate governance, Rwanda in recent years has significantly improved its position in the Index, jumping as much as 35 steps and was on the 77th place in the rating of the most stable economies in the world (among the African countries, it ranks fourth).
More importantly, however, Rwanda has invaluable experience dealing with similar and even more deadly virus, the country managed to prevent the spread of Ebola in 2019, when the neighboring Democratic Republic of the Congo there was an outbreak of this disease.
Universal health care, measuring the temperature at the border crossings, the use of drones to deliver medication — it seems that Rwanda is well prepared to maintain stability during crisis, especially when compared with neighbours in the region.
“Many foreign students, like myself, stayed here, because we are sure that the government of Rwanda to cope with the situation far better than our native countries,” says Garnett Achieng responsible for digital content in Baobab Consulting and student of the African University of management in Kigali, himself from Kenya.
“International students, there is only one cause for concern — we are worried not for myself but for family and relatives, living at home in other African countries.”
Among the African countries located South of Sahara, Rwanda became the first to enact a complete quarantine. Here deliver free food left in isolation for the most vulnerable Rwandans.
And although the tourism industry is expected to suffer greatly (Rwanda is a popular venue for international conferences and exhibitions), Garnett Ochieng hopes that the country will be relatively little affected by the virus that will help to quickly return to normal life.
In the above-mentioned “Index” New Zealand is in 12th place, with particularly high marks in the areas of corporate management and logistics.
The authorities also responded quickly to the pandemic, March 19, by closing the borders to foreign travelers and March 25, prohibiting the operation of enterprises of the sectors of economic activity.
“We as an island nation easier to control the borders, from where mostly comes the infection. So the closure makes sense, — says a resident of the city of Oakland has Shamubeel Icub, an economist with the consulting firm Partners Sense. In comparison with other countries, the response of New Zealand was a bold and decisive”.
And strict measures are already bearing fruit: if they are respected and in the next few weeks, the infections will be eradicated, and the country, as noted in the report of the newspaper the Guardian, will be one of the first successfully returned to a normal life.
Exports and tourism are the main components of the economy of this country, so New Zealand will soon have to face certain difficulties. But this is not necessarily bad.
“While we are isolated, we will have time to re-tune, emphasizes resident of Dunedin Ron bull, Director of curriculum development at the country’s oldest University, Otago Polytechnic. We’ve already been concerned about the impact of organized tourism on the environment, and the current situation will give us time to properly reflect on what we care more about tourist dollars or our nature.”
In General, the country has excellent chances for a sustainable recovery of the economy — national debt is small, it is possible to use the saturation of economy money supply and keep interest rates low.
“The most important thing that New Zealand remains a country where a relatively high level of confidence in the authorities, the notes were Shamubeel Icub. Is a good basis for restoration after our health and economy will experience the largest for many generations shock”.
Bull agrees that the country is likely to emerge from the crisis stronger than it was before him: “Like in a big family living in one house, all know each other, and we now need to get all our new Zealand family and decide what we want to be. And make decisions that will make us stronger and better.”
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