Brazil, India, Indonesia, Mexico, Russia under pressure to ease measures as Europe, US reopen
Brazil, India and Indonesia are leading a group of middle and low-income economies that have begun to ease lockdowns despite rising coronavirus infection numbers, as pressure grows to reopen businesses and curb rising poverty.
These countries, together with Mexico, Russia and South Africa, account for more than a quarter of the global population, supply the world with crucial exports and have taken contentious decisions to start a return to normal life.
The decisions of their governments to loosen virus-related restrictions underscore the greater pressure on low and middle-income economies to restore people’s livelihoods and step up exports as the US, Europe and China lift their own lockdowns.
Such decisions, however, risk accelerating the spread of Covid-19 in their countries, costing lives and complicating global efforts to curb the disease and restore international travel.
KK Cheng, professor of public health at the UK’s University of Birmingham, said this “big, big dilemma” was faced by all countries — and middle and low-income ones in particular, where “poverty kills as well” as the virus.
“Governments have to balance between health, wealth and public acceptance,” he added. “But if you open up too early, your livelihoods will be gone, the health service will be overrun and there will be no economic activities.”
Doing this well faces additional challenges in these large, heterogeneous countries. “It’s going to be quite hard to have a national regime that will suit everyone,” said Jimmy Whitworth, professor of international public health at the London School of Hygiene & Tropical Medicine.
India
Prime Minister Narendra Modi imposed one of the world’s most draconian lockdowns on March 24. Eight weeks later, the incomes of an estimated 140m workers and self-employed people have collapsed and India’s confirmed coronavirus caseload has overtaken that of China. Nevertheless, Mr Modi believes the global turmoil gives India an opportunity to woo investment from companies keen to diversify their supply chains away from China — if India can get back to work.
“Corona will remain part of our lives for a long time,” he said in a television address last week. “But at the same time, we cannot allow our lives to be confined only around corona.” The relaxations will vary considerably from area to area, depending on the local caseload and health conditions. Mr Modi’s moves have been widely endorsed by the business community, as well as social activists questioning the lockdown’s utility in a country with vast areas of tightly packed slums.
Indonesia
The government is considering whether to fully reopen south-east Asia’s largest economy by late July or early August, in large part because of the struggles faced by workers in the country’s huge informal sector under the partial lockdown. This month, Sri Mulyani Indrawati, Indonesia’s finance minister, said the pandemic had put 2m people out of work and removed the gains made in reducing poverty achieved over the past decade.
However, the delayed rollout of social-distancing measures last month could make it hard for Indonesia to recover quickly. “You’ll get more people off sick with the virus, which will affect output and production,” said Gareth Leather, senior Asia economist at Capital Economics.
Mexico
President Andrés Manuel López Obrador, who only reluctantly closed the economy, unveiled a traffic-lights system for a gradual return to a “new normal” from June 1. He said this week that auto companies would be able to resume even before that date, provided they complied with health protocols. Guidelines were amended but remained vague as he promised the process would be “bureaucracy-free” and based on trust.
Under pressure from manufacturers in the neighbouring US to reopen key supply chains, Mexico’s pivotal auto sector — which represents nearly 4 per cent of gross domestic product — was last week designated an essential industry alongside mining and construction, paving the way for a return to work even in areas of the country not yet “green-lighted” to reopen. Initial guidance appeared to suggest they would be allowed to start operating from May 18, when nearly 300 virus-free “hope towns” would be allowed to open up.
But the rules published in the official gazette were speedily withdrawn. Amended guidelines impose tough but vague conditions for the three essential industries. “It’s a real mess if you ask me,” said one auto parts manufacturer.
Brazil
Hard-right president Jair Bolsonaro has branded the pandemic a “neurosis” and has pushed state governors to lift lockdowns he has never supported. On Sunday, as Brazil crossed the threshold of more than 16,000 deaths nationwide, Mr Bolsonaro did push-ups with supporters protesting against lockdowns. Days earlier he signed a decree labelling beauty salons, gyms and barber shops “essential services” that should reopen.
Two health ministers have resigned in under than a month over disagreements with Mr Bolsonaro. Latin America’s largest country has become the virus hotspot of the emerging world, prompting governors to consider imposing fully-fledged lockdowns following low levels of compliance with social isolation recommendations. Mario Marconini, Latin America analyst at consultancy Teneo, said there was a “sense of quarantine fatigue” driven in part by Mr Bolsonaro’s frequent talk of “opening up”. “All this is aggravated by reports coming from Europe and Asia that suggest some kind of ‘normalisation’,” he added.
Russia
Under pressure from the crash in the international oil price, President Vladimir Putin has moved to relax curbs despite having one of the world’s largest confirmed coronavirus caseloads. Last week, as hundreds of thousands of people returned to work for the first time in more than a month, Russia overtook Spain and the UK to become the world’s second most-affected country in terms of infections, after the US. The oil-producing nation’s economy is set to contract by as much as 6 per cent this year, according to central bank forecasts. Unemployment has already doubled since the lockdown was imposed in March, according to Mr Putin. Surveys show fewer than half of Russian households have enough savings to last them a month. The Kremlin’s economic stimulus package to help citizens and businesses survive the crisis — worth about 3 per cent of GDP — is far smaller than those pledged by many European countries.
South Africa
President Cyril Ramaphosa won early plaudits for his swift action in March to lock down Africa’s most industrialised country before a single Covid-19 death. But more than 200 deaths later, the risk of widespread destitution in what was already a stagnant and unequal economy has put him under growing pressure to accelerate a phased exit.
Residents wearing face masks carry food aid received at a distribution centre in Finetown, south of Johannesburg, in South Africa © Waldo Swiegers/Bloomberg As cases begin to rise in areas such as the coastal city of Cape Town while large tracts of the country remain untouched, the next phase of South Africa’s virus strategy might be to keep urban centres of economic activity and supply chain hubs at higher levels of lockdown while easing restrictions elsewhere.
Source: Financial Times
