: Emergency Management Model Resilient against the pandemic.
During the first half of 2020, the entire world has turned on its head on the widening impact of COVID-19. Many researchers have been studying and discussing the economic management of the pandemic. According to the Federal Reserve and Massachusetts Institute of Technology, and following a study carried out in response to the flu pandemic that broke out in America in 1918, the countries that acted early and dynamically had the best economic results. Those that delayed in taking such measures could not evade the shadow of the pandemic. Cities that imposed strict controls limited the damage to their public health system and managed to recover sooner.
The outcome for the successful management of the pandemic has two main aspects, the health and economic aspect. The management of the pandemic inevitably affected all countries economically. Not all countries have prioritized people’s health above their economies. However, several of them ranked the pandemic second. The health effects arising from the pandemic are tragic in developed countries such as the United States and several other countries in Europe, Russia and elsewhere. The same applies for the way they deal with the economic crisis, their results being similarly ineffective. The pandemic has also brought numerous serious social consequences, as well as sharpening of the inconsistencies in income among the population. Notably, the majority of countries failed to effectively manage health and economic crisis.
The only country that appears to be achieving the best results with regards the management of the pandemic, both concerning the protection of citizen’s health and the economy, is China, as well as some smaller countries that have followed a similar model.
Rapid mass tests, detailed monitoring of contacts through smartphone applications and strict quarantines, combined with the culture of self-discipline of the Chinese people, rank China in the top positions with successful results in the management of this unprecedented health crisis. Information that the virus originated in the city of Wuhan has not yet been confirmed by the World Health Organization.
China also appears to be following today the findings of the Massachusetts research regarding the management of COVID-19. The data confirms that China is one of the few countries that will have an increase in growth rates in 2020. China’s GDP expanded at an annual growth rate of 2.3%. In the US, the OECD predicts a recession of 3.8%, while for the EU it forecasts a recession 7.4%. According to President Xi Jiping, China’s GDP is expected to exceed $15.3 trillion. In the fourth quarter of 2020, China recorded a growth rate of 6.5%.
These results are not coincidental and were not achieved only through severe lockdowns. The division between production and consumption partly arises from the way China has implemented its economic restart. The government correctly believed that it would be easier to reduce virus risks in factories that operate as semi-enclosed ecosystems, often with workers living in neighboring areas. While other countries were still struggling to understand the enormous scale of the health crisis, China carefully reopened the doors of its factories. Factories in China have also benefited from developments in the global economy and adjusted their production. Between March and December, China exported 224 billion masks, enough for 35 masks per person worldwide. At the same time, its companies were the largest exporters of appliances, screens and sofas, as people spent more time at home. The industrial sector was the first sector of the economy to recover. Factory production increased by 2.8% in 2020 compared to 2019. The decrease in consumption by around 4% and the increase in the price of real estate and other products created a lot of problems in the Chinese economy. Wages increased by 1.2%, lower than the increase in GDP. The biggest issue China has to deal with is public debt, which grew by 25 percentage points in 2020 to 290% of GDP.
In many rich countries, governments have increased budget support for workers who temporarily lost their jobs during the pandemic. China, on the other hand, has focused its incentives on new infrastructure projects and cheap loans to companies that in turn have supported their employees and their wages. Unemployment returned to 2019 levels.
China not only can be proud of its outstanding results in the management of the pandemic, but also can be praised for the solidarity it has shown for the people all over the world by sending millions of tons of medicines and other materials to many countries, including Cyprus.
The pandemic has exposed capitalism’s neo-liberal policies that have led to the dismantling and privatization of public health systems and social welfare structures. It has discredited the “lesser state” narrative and ruling ideological concepts that have sought to glorify the capitalist order. A planned economy, effective state intervention and mass public investment putting people’s and society’s interests over profit have shown their superiority in combating and confronting the pandemic and its consequences over the policies pursued by capitalism.
What is the crucial element that differentiates China from other big and developed countries in the world with regards to the management of the pandemic crisis? The answer may lie in the planned growth and planned economy as opposed to the anarchic and so-called free market economy.
By Nicos Ioannou, member of the Political Bureau of AKEL CYPRUS