Who should be first in line for COVID-19 vaccines?

Credit: University of Pennsylvania – Penn Medicine News
INOCULATION QUEUES FORM

The pandemic has forced governments to answer many tough questions and the virus is currently posing another: Who should be at the front of immunisation lines when vaccines against COVID-19 become available? This vexing decision has come into sharp relief as policymakers grapple with how best to allocate doses for scarce vaccines.

Even if in the coming months some vaccines are declared safe and effective, there will not be enough for everyone who wants a shot right away. While many individuals and groups will argue that they should be at the top of the distribution list, determining who should be given priority access to limited supplies is challenging politicians and epidemiologists.

Bio-ethicists have weighed in on the debate as the mass vaccination of almost eight billion people won’t happen overnight. It is widely believed that a phased-in approach – which must be fair and equitable – will be required. But deciding how to apportion supplies of the first batches of coronavirus vaccines – and who will follow the initial jumpstart phase and in what order – is the subject of ongoing debate.

From a health equity perspective, there will undoubtedly be disagreements over vaccine rationing, regardless of what priority ranking is introduced. Prioritisation decisions will be fraught as players (the young, the old, pregnant women, health care workers, those in front-line jobs, people of colour, individuals with pre-existing conditions, etc.) jockey to be early recipients of the drug. Some will claim that it is a matter of life and death that they receive an early jab while others will refuse immunisation all together.

Of course, for nations to distribute vaccines, they must firstly obtain supplies from vaccine manufacturers. Will manufacturers just sell their product to the highest bidders? Or will they take a global perspective and ensure that supplies are rolled out to all nations – even poorer ones? The correct course of action was outlined in a recent article by Bill Gates.

During a pandemic, vaccines and antivirals can’t simply be sold to the highest bidder. They should be available and affordable for people who are at the heart of the outbreak and in greatest need. Not only is such distribution the right thing to do, it’s also the right strategy for short-circuiting transmission and preventing future pandemics.

Though no final agreement has been reached on a single, global distribution framework for COVID-19 vaccines, two main proposals have emerged. A number of experts have argued that health care workers and high-risk populations (the over 65s) should be immunised first. In contrast, the WHO has suggested that countries receive doses proportional to their populations.

From an ethical perspective, both of these strategies are “seriously flawed” according to Professor Ezekiel J. Emanuel from the University of Pennsylvania. He states:

The idea of distributing vaccines by population appears to be an equitable strategy. But the fact is that normally, we distribute things based on how severe there is suffering in a given place, and, in this case, we argue that the primary measure of suffering ought to be the number of premature deaths that a vaccine would prevent.

Professor Emanuel led an international group of 19 health ethicists from around the world (including Australia) to develop a three-phase plan – the Fair Priority Model – for vaccine distribution. In their proposal, as noted in a news release by Penn Medicine, Emanuel and his co-authors point to three fundamental values that must be considered when distributing a COVID-19 vaccine among countries:

Benefiting people and limiting harm, prioritizing the disadvantaged, and giving equal moral concern for all individuals. The Fair Priority Model addresses these values by focusing on mitigating three types of harms caused by COVID-19: death and permanent organ damage, indirect health consequences, such as health care system strain and stress, as well as economic destruction.

Preventing deaths is seen as the most urgent of all three dimensions and is the focus of Phase 1 of the Fair Priority Model. In Phase 2, two metrics that capture overall economic improvement and the extent to which people would be spared from poverty are proposed. Finally, in Phase 3, countries with higher transmission rates are initially prioritised.

With regard to preventing deaths, the Model begins by calculating the number of years of life that will be added in a given country by the delivery of, for example, a million vaccine doses. Peru, which has experienced high COVID-19 mortality rates and the US, where the virus has killed over 200,000 people, would likely be on the priority list.

“But take New Zealand, giving them a million doses, you’re probably not going to save but one or two people literally. So, they would be low on the priority list,” said Emanuel. The group of 19 rejects the argument that its policies would reward bad management, such as in the US, which leads the world in the number of virus deaths and cases.

“You shouldn’t penalise Americans because Donald Trump can’t seem to manage this pandemic,” he reasoned.

Emanuel and his collaborators – as outlined in the Penn Medicine release – also object to the WHO’s plan, which begins with three per cent of each country’s population receiving vaccines, and continues until every country has vaccinated 20 per cent of its citizens. While that plan may be politically tenable, it “mistakenly assumes that equality requires treating differently-situated countries identically, rather than equitably responding to their different needs,” argues Emanuel.

Health care workers and others most vulnerable are traditionally first in line for a scarce vaccine. But many are calling for geography to play a greater role this time round and to give COVID-19 vaccine priority to people where the outbreak is hitting hardest. Still, the fear remains that many nations will prioritise their own populations first. The resultant uneven scramble may see countries with the greatest need for vaccines being unable to put in place an early and critical ring of protection around their borders.

Another idea that has been floated is to give priority to “super-spreaders”. A trio of US academics believes that after taking care of essential workers, “vaccinations should be given to the biggest transmitters of the virus – mostly the young – and only then to the most vulnerable”.

One of the lessons from past pandemics is that vaccinating likely asymptomatic spreaders early can avert multiple infections with others. The academic trio note that very few of the COVID-19 super-spreaders are elderly. Rather, it is younger people who have a much greater propensity to resume social lives at school and in other venues.

While the strategy of vaccinating the young to protect the old is counterintuitive, there is ample evidence to suggest that this is the right approach. According to UK researchers, immunising those around the elderly may help protect them. It is also instructive to note that a vaccine against COVID-19 may not be as effective in older people who are most at risk of suffering complications and dying from the disease.

Clearly, there is an urgent need for international co-ordination on COVID-19 vaccines to ensure that effective treatments are widely available and appropriately distributed. With many nations likely to adopt a nationalistic approach, there is a high risk that the most vulnerable will not get the life-saving interventions that they need.

Deciding who gets first dibs will be a challenging and contentious task. Most nations are expected to adopt a tiered approach to vaccine distribution. Regardless of the allocation plan adopted, it needs to be transparent and perceived as fair by a majority of the general public.

Of course, fairness – like beauty – is in the eye of the beholder.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why we need a new approach to mental health care

Credit: World Federation for Mental Health
CLASSIC STUDY LEAVES SCAR ON PSYCHIATRY

In 1973, Stanford University professor and psychiatrist, David Rosenhan, arranged for eight mentally healthy people (three women and five men, including himself) to present themselves at mental institutions and declare that they were hearing strange voices. All were certified mad even though their auditory hallucinations were feigned. The eight fake patients were checked in to different psychiatric hospitals and seven were diagnosed as paranoid schizophrenics.

Rosenhan’s subsequent landmark paper, On Being Sane in Insane Places, created a media sensation and a crisis in psychiatry. There was astonishment at the ease with which mental health practitioners had been duped by a made-up symptom. Psychiatrists, it seemed, unlike suspicious fellow patients, could not tell a phoney from a lunatic. Not one of Rosenhan’s “pseudopatients” was unmasked by hospital staff.

The Rosenhan experiment is considered an important and influential criticism of psychiatry. That eight perfectly sane subjects could fool doctors into believing that they were insane called into question the validity of psychiatric diagnosis. There was a “uniform failure to recognize sanity” in any of the pseudopatients, Rosenhan concluded, and not one of them was ever found out by the medical staff despite behaving normally while in hospital.

“It is clear that we cannot distinguish the sane from the insane in psychiatric hospitals,” Rosenhan famously wrote at the outset of his report’s conclusion. He went on to say that the diagnosis of mental health patients was flawed because the classification system used at that time was not valid.

A disturbing aspect of the experiment was the claim by pseudopatients, as reported by one writer, that the staff was dehumanising and often brutal.

Conversations with staff were limited by their frequent absence. When the staff did have time to talk, they were often curt and dismissive. Orderlies would often be both physically and verbally abusive when other workers were absent. The pseudopatients reported they often felt invisible, as the staff would act like they weren’t even there.

There was a second part of Rosenhan’s study which also delivered a minor bombshell. A hospital – which had heard about Rosenhan’s initial test and claimed that similar errors would not occur there – was falsely informed that one or more imposters would attempt to be admitted as psychiatric patients. Staff at the hospital subsequently determined that 41 out of 193 patients were not genuine patients. In reality, Rosenhan had not sent a single imposter to the hospital.

While Rosenhan’s main experiment illustrated a failure to detect sanity, the secondary study demonstrated a failure to detect insanity. He starkly concluded that “one thing is certain: any diagnostic process that lends itself too readily to massive errors of this sort cannot be a very reliable one”.

One of Rosenhan’s key findings was that psychiatric labels tend to stick. Consequently, everything a patient does is interpreted in accordance with the diagnostic label applied. This is why the original diagnosis of schizophrenia biased the staff’s interpretation of patient behaviours. For example, pacing a corridor out of boredom was interpreted as “anxiety” by hospital staff.

Not surprisingly, Rosenhan’s unsettling findings were disputed by other psychiatrists who claimed that his study was flawed. However, the main message he sought to convey was the relative ease with which a person can be misdiagnosed as mentally ill and the significant difficulty in erasing that diagnosis. He argued that psychiatric labels tend to have a longevity that physical medical labels do not.

We have all experienced the extraordinary power of language to motivate and inspire. But words can also stigmatise and – at its core – Rosenhan’s study was about demonstrating the biasing power of psychiatric labels. I have seen this destructive power first-hand.

A member of my broader family suffers from poor mental health and her condition has been assigned numerous diagnostic labels throughout her life. Each of her labels has served as a cue that activates stigma and stereotypes and sometimes results in her being kept at arm’s length. Just as no one diagnosed with dementia wears it as a badge of honour, those diagnosed with a mental disorder equally know that they will likely suffer negative evaluations by others – a case of judging a book by its cover.

Moreover, a psychiatric label can become a self-fulling prophesy as patients act out the label. I have seen this first-hand with my above-mentioned family member who blames her “depression”, “bi-polar”, “melancholy”, or whatever other label is current at the time, for her actions during a depressive episode. “I can’t help my behaviour!” she will exclaim, “as people with my condition do these things”.

A final thing that I have witnessed with mental health patients is the apparent compulsory need for medications to be prescribed by the treating physician. In the Rosenhan experiment, the pseudopatients were administered more than 2,000 pills, including antipsychotics and antidepressants – which they largely discarded. Yet again, I have direct experience of the negative impact of pills on patients. Mental health drugs are powerful and often have side effects.

Many years ago, I provided a listening ear to a friend who was feeling down. During our chat, he revealed that he had been to see a psychiatrist for a heart-to-heart but that the doctor was more interested in pumping him with pills. As my friend rejected the prescribed medicine, the specialist said he could not see him again.

At end of the day, all my friend wanted and needed was a supportive shoulder to cry on and some genuine kindness. As portrayed by Robyn Williams in the movie, Patch Adams, a little kindness goes a long way when someone is under the weather. Following a traditional medical school education, Hunter “Patch” Adams rebelled against the pill-pushing model of medicine and pioneered a more humane approach based on laughter, love and caring as primary forms of medical treatment.

His style of care and disdain for the prevailing methods put him at odds with the norms of the established medical profession. Yet, his approach has merit. I think that every mental health specialist should watch the movie, Patch Adams, which provides a life lesson for psychiatrists. The movie’s underlying message may be a bitter pill for some doctors to swallow. However, when it comes to mental health, life should imitate art, particularly as the mental health effects of the coronavirus crisis have driven a marked rise in anxiety and depression in Australians.

Never again should pseudopatients be allowed to fly over the cuckoo’s nest!

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Why Australia should provide free and universal childcare

Source: Free clipart
MAKE TEMPORARY ASSISTANCE PERMANENT

During the height of the coronavirus pandemic in April, Australian Prime Minister, Scott Morrison, announced that families could access free childcare. This temporary crisis measure was designed to protect livelihoods. “This virus is going to take enough from Australians without putting Australian parents in that position of having to choose between the economic wellbeing of their family or the care and support and education of their children,” Mr Morrison said.

The PM essentially nationalised the childcare system making it an “essential service”, but the relief package only covered the period to 12 July. Many believe that the emergency arrangements should have been made permanent. I join the chorus of voices calling for continued government funding of childcare and believe that it should be considered an essential service, both in good and bad times. Parents rely on dependable childcare so that they can work.

The arguments for early childcare are well-known and universal. Infants and toddlers everywhere are naturally curious and observant and can take in vast amounts of information. Children learn more quickly during their early years than at any other time in their lives. From birth to age six, a child’s brain is like a sponge, continuously absorbing everything around them.

Enrolling a child in a daycare centre or preschool facility enhances this cognitive absorption process. Early education and care exposes children to numbers, letters and shapes. It also helps them develop social and emotional skills such as getting along with other children, sharing and contributing. Early learning settings assist children develop the skills they’ll use for the rest of their lives.

But childcare is not cheap and Australia does not provide free and universal daycare and preschooling and this places a financial burden on working families. Many Aussie households struggle to pay the fees, while for others it is completely out of reach. Childcare affordability and accessibility are significant issues in Australia.

In contrast, Scandinavian nations have the most family-friendly childcare policies in the world. The Swedes and the Danes enjoy heavily subsidised access to daycare facilities regardless of income. The French benefit from similar arrangements with the government providing inexpensive municipal daycare, tax breaks for families employing in-home childcare workers and free universal preschool beginning at age three.

Childcare options in Britain changed in 2017 with the introduction of free and universal early education for children three and four years of age. According to government data, 94 per cent of British parents have taken the government up on its offer of free education. The offer provides a guaranteed 15 hours a week of free childcare or preschool for 38 weeks a year.

More and more nations are discovering that early childhood education is one of the best investments a country can make to prepare children for learning and give them a chance to thrive later in life. It lays the foundation for a child’s future and has long-term impacts on health, education, job prospects and well-being.

Experts agree that supporting early childhood education is a win-win for everyone. One such expert is Nobel prize-winning economist James Heckman, from the University of Chicago. Professor Heckman argues that the best way to reduce deficits and strengthen the economy is to invest in quality early childhood development. This creates better education, health, social and economic outcomes which increase revenue and reduce the need for costly social spending.

He developed the “Heckman Equation” which is based on the notion that spending on education and training has its biggest impact early in life. The science of brain development reveals that the first few years of life play a critical role in shaping future emotional, cognitive and intellectual skills. Kids who get consistent nurturing care are more likely to succeed in school, stay clear of trouble with the law and have productive lives in the workforce.

Another academic who has weighed in on the early education debate is Edward Melhuish. He is a professor at the University of Oxford, a visiting professor at the University College London and a visiting professor at the University of Wollongong’s Early Start Research Institute. In an article Professor Melhuish wrote for The Guardian, he stated:

Those countries that are planning for long-term economic growth are investing in early childhood education and care, because the jobs of the future will be for those with the most skills, and the foundations are laid in early life. China is an example of a country that has greatly increased its investment in this area.

In the same article, Professor Melhuish noted that there is a powerful economic case for state funding:

Using taxpayer money to help parents into work is not necessarily a drain on the treasury, rather it can lead to more revenue. A UK think tank has published a report suggesting that a 5% increase in maternal employment in the UK could be worth £750m (AU$1.6bn) annually in increased tax revenue and reduced benefit spending.

Professor Melhuish believes that a high-quality early childhood education and care system should be considered as part of the infrastructure for a country’s long-term economic and social development, to be developed in much the same way as, say, roads. This view is increasingly holding sway among OECD countries. An OECD report, Starting Strong III, begins:

A growing body of research recognises that early childhood education and care (ECEC) brings a wide range of benefits, for example, better child wellbeing and learning outcomes as a foundation for lifelong learning; more equitable child outcomes and reduction of poverty; increased intergenerational social mobility; more female labour market participation; increased fertility rates; and better social and economic development for the society at large.

Professor Melhuish believes that Australia should follow the research and provide free universal childcare and I concur. Early childhood education will improve educational and whole-of-life outcomes for Australian children, as well as increased workforce participation. This provides a double dividend for the Australian government’s investment.

Still, some child-free individuals, together with parents who elect to stay-at-home, will object to their tax dollars being used on childcare for other people’s offspring. Yet these same people are seemingly comfortable with state funding of primary and high schools. This, I believe, is because childcare is viewed as “preschool babysitting” whereas it should be seen as “preschool education”.

By relabelling early childcare, the notion of public money being spent on the very young should be more palatable. State subsidies for childcare facilities are a common good and, in my opinion, are no different from the principle behind free state schools. Childcare provides a healthy return on investment, so undervaluing childcare is a false economy.

All revolutions take time and childcare is no exception. It is my hope that sooner rather than later Australia will have the political appetite for more spending on preschool care and education. The approach by Scandinavian countries to universal childcare is a source of policy inspiration and a sensible policy tool for Australia to adopt. It’s also a smart investment.

Our children deserve the best possible start in life.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How COVID-19 exposed inequality among workers

Source: Twitter: NBC 5 Chicago
UNDERVALUED CORONAVIRUS HEROES

While nations were under lockdown during the depth of the pandemic, millions of people around the world worked remotely from home. At the same time, there was an even bigger cohort of essential workers for whom it was business-as-usual as the coronavirus swept the land.

These unlikely heroes drove the trucks which delivered our goods, stocked the supermarket shelves which provided our groceries and prepared the takeaway meals which kept us fed. Other essential workers – like farmhands, meatpackers, store cashiers and warehouse clerks – also helped keep the economy’s lights on.

When the pandemic hit, jobs previously labelled “low skill” were reclassified as “essential”. As cities enforced quarantines and shoppers squabbled over the last roll of toilet paper on the supermarket shelf, “essential” employees were out and about keeping societies functioning. Their efforts largely went unnoticed even though they were everywhere.

Doctors, nurses and other health professionals bore the brunt of the outbreak and were the most at-risk population. They received an outpouring of gratitude from citizens and governments for their tireless patient care. Non-medical frontline workers, however, were less recognised. Nonetheless, this other layer of critical workers continued to show up on-the-job to help maintain a semblance of normality for others.

The pandemic has shone a light on the stark workplace divide between people who can work from home and those who can’t. Lower paid workers – like factory employees, security guards and supermarket staff – don’t have the option of working remotely. In contrast, highly compensated workers – like managers and other professionals – are able to shelter at home.

Alison Pennington, a senior economist at The Australia Institute’s Centre for Future Work, told ABC News that it was easy to see how the pandemic work regime could compound inequality in Australia.

We estimate people who can work from home are earning around 24 per cent more than those who can’t. They’re also more likely to have paid sick leave benefits — while essential workers who are turning out every day, are more likely to work for lower pay, but also less likely to have sick leave.

Pennington said those differences were creating greater inequality, not only in incomes, but also health outcomes as essential workers faced the higher risk of infection without the income safety net of sick leave. She stated:

… coming through this regime, what we’re going to find is that the pandemic is going to require a universal entitlement to sick leave if we’re going to be able to work through the virus and keep everyone safe.

The Centre for Future Work estimates that only around 15 per cent of Australian workers currently have the option of working remotely full-time. That figure is expected to double as companies quickly adapt to allow more of their employees to stay away from the office. By way of comparison, about a quarter of US workers can easily do their jobs from home.

COVID-19 has revealed how deeply our fates are tied together. It’s not a case of us and them – all workers are in this together. Amid stay-at-home orders, office workers ditched their daily commute while essential workers continued to drive our buses, clean our workplaces, collect our rubbish, cook our food and staff our nursing homes.

Essential workers are just that – essential. They keep communities running, so staying home isn’t an option for them. Risking their wellbeing for the greater good, their sacrifice is a moral calling for all of us. The pandemic added another layer of burden and responsibility to their jobs as they braved the frontlines against an invisible enemy. We owe them our heartfelt thanks.

Thank you to supermarket employees. Often working at minimum wages, they had to deal with epidemic levels of abuse from irate customers. Retail workers are our neighbours and fellow citizens and maybe even the children of your friends. They put themselves in harm’s way to ensure we had access to essential goods – they deserve our highest praise.

Thank you to delivery drivers. While many of us were safely hunkered down at home in isolation, we asked others to drop parcels to our front door. Fulfilling our online orders required the coordinated efforts of workers in warehouses, sorting hubs and courier companies. They provided an indispensable lifeline to the outside world. We are in their debt and salute their wonderful service.

Thank you to transit workers. Buses and trains underpin urban life and during the pandemic they performed the critical task of shuttling workers to and from their jobs. This put transit workers in daily physical contact with members of the public in the confines of a bus or train making social distancing difficult. Three cheers to these quiet achievers for keeping our cities running.

In the war against the novel coronavirus, these and myriad other essential workers were the life support for communities. Yet their work is chronically underpaid and undervalued by society. The explanation for this can be found in economics – or more precisely, the law of supply and demand.

The harsh reality is that lower paid “essential” jobs require few educational credentials. Moreover, the skills necessary to be, say, a cleaner, are easy to pick up as they are non-technical. This means that the pool of eligible workers is large, making it easy for employers to hire and fire.

Around the world, many essential workers just get by, living from pay-to-pay. Yet, during the pandemic, these “low wage workers,” according to Health Policy Watch, continued “to risk exposure to the deadly virus while celebrities and CEOs retreat(ed) to private mansions and islands for self-isolation”. This brought the gap between “have” and have nots” into stark relief.

In an opinion piece in The New York Times on 24 April 2020, Gene Sperling, a former economic adviser to Presidents Bill Clinton and Barack Obama asked: “Will our overdue recognition of the contributions of so many workers lead to only temporary applause and pats on the back, or will it move us toward a true social compact ensuring economic dignity for all?”

Drawing inspiration from legendary human rights activist, Dr Martin Luther King, Mr Sperling wrote:

Fifty-two years ago, when the Rev. Dr. Martin Luther King Jr. famously asserted the dignity of all work, he seemed to foresee this moment when it would become so clear that the labor of everyone – farmworkers, grocers, delivery drivers, caregivers, nursing assistants – was essential to all of our health and well-being.

“One day,” Dr. King told sanitation workers on strike in Memphis in 1968, “our society will come to respect the sanitation worker if it is to survive, for the person who picks up our garbage, in the final analysis, is as significant as the physician, for if he doesn’t do his job, diseases are rampant”.

In the words of Dr King: “All labor has dignity”.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Search for COVID-19 vaccine brings nationalist element to worldwide crisis

Source: The National – Shadi Ghanim
NATIONS ENGAGE IN DANGEROUS HEALTH ARMS RACE

A global competition is underway to defeat the novel coronavirus. More than 140 vaccines are being tested, according to the World Health Organisation. Australian researches are leading several major clinical trials that might help control the spread of the disease.

But in the battle to be the first to find effective protection against COVID-19, nobody wins unless everyone wins. That’s the view of American epidemiologist and CEO of Gavi, The Vaccine Alliance, Dr Seth Berkley. In an opinion piece Dr Berkley wrote for Fortune Online, he expressed concern that the search for a vaccine has morphed into a geopolitical battle.

… regardless of which vaccines succeed, if we don’t take a more global and multilateral approach, one involving unprecedented collaboration, where countries work together with global health agencies toward COVID-19 vaccines and where the rewards are shared, then ultimately we all stand to lose. Because with infectious disease, no one is safe until everyone is safe.

Dr Berkley is not alone in flagging that a lack of international cooperation is driving nations to race against each other and not the real enemy – the virus. Writing in The New York Times, a team of senior correspondents observed:

China, Europe and the United States have all set off at a sprint to become the first to produce a vaccine. But while there is cooperation on many levels – including among companies that are ordinarily fierce competitors – hanging over the effort is the shadow of a nationalistic approach that could give the winner the chance to favor its own population and potentially gain the upper hand in dealing with the economic and geostrategic fallout from the crisis.

Vaccine nationalism and a “my-country-first” approach to vaccine allocation also trouble Thomas J. Bollyky, Director of the Global Health Program at the Council on Foreign Relations. He warns that such behaviour creates the potential for a deadly zero-sum game which will have profound and far-reaching consequences.

Without global coordination, countries may bid against one another, driving up the price of vaccines and related materials. Supplies of proven vaccines will be limited initially even in some rich countries, but the greatest suffering will be in low and middle-income countries. Such places will be forced to watch as their wealthier counterparts deplete supplies and will have to wait months (or longer) for their replenishment. In the interim, health-care workers and billions of elderly and other high-risk inhabitants in poorer countries will go unprotected, which will extend the pandemic, increase its death toll, and imperil already fragile health-care systems and economies.

World powers are working at breakneck speed to secure vaccine stocks and score some reputational kudos. But an excess of national pride and one-upmanship are threatening to overwhelm the common good. The jockeying for position and public posturing by nations was the focus of an article in the July 7 edition of POLITICO Magazine.

In China, where a vaccine victory could turn a country that started the virus’ spread into the savior of the world, the virologist and major general leading the country’s vaccine project has been hailed as a “goddess” on social media….

In June … President Emmanuel Macron announced that (French pharma giant) Sanofi would be dramatically ramping up operations in France to put “Sanofi and France at the heart of excellence in the fight … to find a vaccine.” Invoking the “genius of Louis Pasteur,” Marcon  (sic) hailed France as “a great vaccine country.” …

Meanwhile, across the English Channel, Britain is celebrating the news that its own Oxford scientists are “sprinting fastest” to develop a vaccine, in the words of an April 27 New York Times article – though the news site Irish Central took pains to point out that the lead scientist is Irish, not English….

And then there’s Trump, who stood in the Rose Garden in May and stated definitively that “America is blessed to have the most brilliant, talented doctors and researchers anywhere in the world. And now we’re combining all of these amazing strengths for the most aggressive vaccine project in history. There’s never been a vaccine project anywhere in history like this.”

Of course, governments aren’t chasing the vaccine trophy just for prestige and scientific accolades. Beyond the hubris, it’s about getting first dibs on any breakthrough drug for the benefit of their own people. Many world leaders are driven by nationalist impulses and the demands of their anxious populations to get a jump-start on eliminating the virus and bringing their economies back to life.

While it’s still uncertain which countries will get the first inoculations, what is clear is that there will not be enough vaccine for quite some time, even with the unprecedented efforts to manufacture billions of doses. A report in The Washington Post noted:

… the nationalistic priorities of individual nations could thwart the strategic imperative to tamp down hot spots wherever they are on the planet – including poor countries that cannot afford the vaccine. The United States in particular could be left in the cold if vaccines developed here as part of a go-it-alone approach turn out to be less effective than those produced in China or Europe. The scenario public health experts fear most is a worldwide fight in which manufacturers sell only to the highest bidders, rich countries try to buy up the supplies, and nations where manufacturers are located hoard vaccines for their own citizens.

While richer nations look set to win the battle to find a COVID-19 vaccine, they will lose the war against the spread of the virus if poorer nations remain unprotected. Just immunising a few populations against a universal threat won’t be sufficient for global trade and travel to resume. Yet there remains a high risk that the most vulnerable will not get the lifesaving interventions that they need.

African nations were pushed to the back of the queue in gaining access to an antiretroviral therapy (ART) for HIV and they may well suffer the same injustice regarding COVID-19 vaccine delivery. To help prevent history from repeating itself, the United Nations has declared it a “moral imperative” that everyone has access to a “people’s vaccine”.

A press release issued by UNAIDS in May, cited an open letter signed by “140 world leaders, experts and elders”. The letter demands that all vaccines, treatments and tests be patent-free, mass produced, distributed fairly and available to all people, in all countries free of charge. The letter states:

Now is not the time to allow the interests of the wealthiest corporations and governments to be placed before the universal need to save lives, or to leave this massive and moral task to market forces. Access to vaccines and treatments as global public goods are in the interests of all humanity. We cannot afford for monopolies, crude competition and near-sighted nationalism to stand in the way.

Like climate change, pandemics are transnational issues that no country can solve alone. Both highlight the need for closer international cooperation and coordinated global action. Yet most nations have acted independently from each other during the pandemic rather than in unison. The world needs to heed the words of Pulitzer Prize-winning science writer, Laurie Garett:

“Without equity, pandemic battles will fail.”

PS. To be clear,  there is no certainty that a vaccine will be developed in the near term. The fastest vaccine ever developed was for mumps and that took four years.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How the pandemic has undermined democracies

Authoritarian leaders composite: EPA, Getty, Reuters, AP. Top Row: Donald Trump, Jair Bolsonaro, Benjamin Netanyahu, Narendra Modi. Bottom Row: Recep Tayyip Erdoğan, Rodrigo Duterte, Xi Jinping, Vladimir Putin, Viktor Orbán.
EMERGENCY POWERS ABUSED

The novel coronavirus is the biggest news story in a lifetime. For months, it has dominated the international media and become the most talked about topic on the planet. Front-page and top-of-the-broadcast news stories have focussed on the public health and economic consequences of the outbreak.

What has slipped under the public radar, however, is the danger that COVID-19 poses to democracy. Inadequate attention has been given to the political risks associated with the virus even though ominous warning signs are everywhere. Authoritarian leaders are using the crisis to undermine democracy.

Around the world, citizens accepted previously unthinkable restrictions on their basic freedoms in order to avert countless deaths. The loss of civil liberties – such as no public gatherings – were meant to be temporary. But in some nations, life has not returned to normal.

Unscrupulous leaders, like Hungarian Prime Minister Viktor Orbán, have exploited the virus to impose measures that they have long sought. Orbán has used the health crisis as a pretext to push through legislation which enables him to rule by decree indefinitely, effectively removing any oversight of his government.

In Russia, the assaults on democratic institutions have been even cruder. Foul play is believed to be behind the suspicious deaths of two doctors and the serious injury of another doctor. All three doctors mysteriously fell out of hospital windows. Each had criticised the country’s handling of the crisis and decried the lack of personal protective equipment.

Predictably, US President Donald Trump has also politicised the pandemic. Among other things, he attempted to quash dissent by limiting the press’ access to public health officials critical of his response. Trump also threatened to override the authority of governors to impose stay-at-home orders.

Trump’s disdain for independent institutions and for the separation of powers is shared by Brazil’s far-right leader, Jair Bolsonaro. He has been following the same playbook as Trump, albeit in a more thuggish way. Bolsonaro called for a shutdown of the Supreme Court and Congress which are investigating him.

Like Trump, Bolsonaro displays utter contempt for his country’s system of checks and balances. Bolsonaro admires Trump and Trump, in turn, is a staunch ally of Bolsonaro. The nonchalance of both men in the face of a global pandemic is part of their shared political disposition.

Both leaders view the coronavirus threat with skepticism – Bolsonaro called it a “little flu” and Trump labelled it the “kung flu”. Bolsonaro sacked one health minister and provoked another to resign while Trump continues to squabble with his scientific advisers.

The Indian government, under Prime Minister Narendra Modi, has used the virus to advance its anti-Muslim agenda. Hindu nationalists within the government have agitated against the Muslim minority, scapegoating them for causing the virus. This has led to physical and verbal warfare being waged against Muslims, pushing further their ostracisation in Indian society.

Iran, a government obsessed with tight control, has used the epidemic to deploy security forces to clear the streets. It has also used disinformation and cover-ups to keep the infection rate low so that – like all authoritarian governments – it can look competent and effective.

Across the world, public health officials are brushing up against ideologically-minded national leaders hell-bent on using COVID-19 as a cover for repressive, discriminatory or unconstitutional measures. Borzou Daragahi, an international correspondent for The Independent writes:

Months-long anti-government protests in Iraq, Algeria, and Lebanon that have been a severe thorn in the side of the elites have been suspended. In Turkey, the conservative Islamist-rooted government has ordered bars, nightclubs and libraries to close over coronavirus fears, but is allowing shopping malls, stores and restaurants to remain open. … Leaders facing critical leadership challenges such as Benjamin Netanyahu in Israel and Romania’s prime minister Ludovic Orban found their political problems vanishing, at least temporarily.

The Romanian parliament reluctantly gave the embattled premier full powers. Meanwhile, Netanyahu was temporarily spared the indignity of appearing in court on three corruption cases after his hearings were postponed for two months due to coronavirus restrictions on large gatherings.

The pandemic has also highlighted how voting systems cannot handle disruption. As noted in one report:

Local and national elections around the world are being suspended – the logistics are too overbearing and costly in the midst of a crisis, and social distancing impossible during polling. These delays will undoubtedly erode trust in the system as leaders without a credible mandate bungle their way through an unprecedented crisis.

There is also concern over contact tracing apps. The governments of Singapore and Israel have used the crisis to track people through their mobile phones. Other countries have also loosened their restrictions on privacy by allowing surveillance apps that in normal times would be outrageous.

Guy Verhofstadt, a former Belgian Prime Minister, believes that the mass adoption of contact tracing apps is a slippery slope. He writes:

Before long, Europeans, Americans or others could find themselves living more like the Chinese, with every move monitored, every violation – even of unwritten rules – punished, and a “personal rating” dictating one’s access to travel and public services. This may seem far-fetched, but one need only consider the latest developments in Hungary or Poland to see just how vulnerable democratic institutions can be. If we are not careful, the biggest casualty of COVID-19 could be democracy.

It’s clear from what is happening across the globe that civil liberties have been severely weakened. Despots everywhere have tightened their grip on power to run roughshod over democracy and human rights. A recent article posted on the University of Melbourne’s multi-media platform, Pursuit, reported that:

An unprecedented number of countries have partially suspended their commitments under international human rights treaties and simultaneously established a state of emergency. … More than 50 countries have postponed elections, often with little certainty as to when and how they will be held. Concerns run high.

In a survey of 142 countries’ exposure to ‘pandemic backsliding’, the Varieties of Democracy Institute, which investigates the concept of democracy as a system of government, found emergency measures posed little threat to democracy in only 47 countries, including Australia. It also found that 82 countries are at high (48) or medium (34) risk, with the pandemic response accelerating or emphasising established trends of democratic decay, including some of the world’s largest democracies – the USA, Brazil, India, and Indonesia.

The alarming uptick in authoritarian behaviours by governments around the world is concerning. The global assault on liberal democracy is real with emergency powers being used to arrest protesters and sidestep democratic norms.

Let’s hope that temporary restrictions don’t outlive the crisis.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

Where is the pandemic stimulus money coming from?

The Economist / Otto Dettmer
CREATING MONEY OUT OF NOTHING

Governments around the world are spending up a storm. They have loosened their purse strings and are shovelling truckloads of cash into their respective economies. Collectively, it represents the biggest relief package in history – in excess of US$10 trillion globally. For most nations, every penny of their mind-boggling spendathon is borrowed.

In doing “whatever it takes” to combat the COVID-19 pandemic, governments have shown that they can sustain levels of debt far greater than previously thought. Consequently, the coronavirus has challenged orthodox economics in just a few weeks. The belief in balanced budgets has been thrown out the window. Public debt is no longer seen as a drag on economies but a critical lifeline.

Proponents of an unconventional economic framework – Modern Monetary Theory (MMT) – welcome the ramp-up in government spending. MMT posits that countries which issue their own currencies can’t go bankrupt as they can never run out of money in the way businesses and households can. That’s because governments with their own sovereign currency are able to “print” (or more precisely “create” with a few keystrokes) as much money as they need to pay creditors.

Not surprisingly, traditional economic thinking warns that such spending is fiscally irresponsible as the debt balloons and inflation skyrockets. Critics of MMT cite Hungary in the 1940’s, Brazil in the 80’s and Mexico in the 90’s as examples where easy money policies (governments creating piles of cash) led not just to inflation but hyperinflation.

But this has not deterred MMT advocates who argue that increased government spending will not generate inflation as long as there is unused economic capacity or unemployed labour. It is only when an economy hits physical or natural constraints on its productivity that inflation happens, because that is when supply fails to meet demand, jacking up prices.

This is what occurred in Zimbabwe in the late 1990s and mid-2000s. The economy collapsed, but not because Robert Mugabe printed ever-more Zimbabwean dollars. Rather, the economy nosedived when farming production plummeted by 60 per cent as Mugabe forced experienced white farmers off their land and gave it to inexperienced soldiers to farm.

The resultant decline in output caused a shortage of goods. At the same time, demand rose as Zimbabweans had more paper money. The combination of more money chasing fewer goods – the classic definition of inflation – caused a supersonic rise in prices. Wallets were replaced with wheelbarrows as hyperinflation peaked in the African nation in November 2008 at an estimated 89.7 sextillion per cent – an eye-watering number with 21 zeros after it.

Of course, Robert Mugabe’s gross economic mismanagement of Zimbabwe cannot be compared to Shinzo Abe’s savvy stewardship of the Japanese economy. A basket full of groceries in Japan in 2020 does not cost a bucket full of money as it did in Zimbabwe in 2008. That’s because Japan’s expansionary monetary policy has not been inflationary – spending has not exceeded the economy’s capacity to produce.

Despite having the highest public debt in the developed world, Japan has not experienced runaway inflation (in fact, it has been battling deflation for two decades!) and remains an economic powerhouse. Supporters of MMT cite Japan’s success as proof that their unorthodox ideas work. But critics – including world renowned economist and Nobel laureate, Paul Krugman – strongly disagree.

Both sides of this debate were outlined in a 2019 article published in The New York TimesModern Monetary Theory’s Reluctant Poster Child: Japan. Notwithstanding Japan’s hesitance to be labelled an MMT practitioner, proponents of the theory insist that Japan has been a testing ground. As explained in the article:

The country (Japan) is their (MMT’s) equivalent of Charles Darwin’s Galápagos Islands: a natural experiment that reveals a fundamental truth about the way the world really works. Since the country’s boom ended in the early 1990s, Japan has borrowed deeply. Currently, its debt level is approaching 250 percent of its annual economic output. Critics say it is an economic basket case. Despite all that, Japanese inflation and lending rates remain low. In fact, some bond rates are negative, meaning Japan can profit when it borrows money. Its standard of living remains competitive with those of the United States and other developed countries.

Bill Mitchell is a professor of economics at the University of Newcastle in Australia and one of the founders of Modern Monetary Theory. He has been closely studying Japan since the 1990s. “It is my laboratory,” he explains, calling the country “a really good demonstration of why mainstream macroeconomics is wrong”. He argues that Japan has established “the principles of MMT and the consequences of different fiscal and monetary policy initiatives”.

Japan has blurred the lines that traditionally divide fiscal and monetary policy. Other nations, including Australia, are currently doing likewise with their pandemic stimulus packages. Historically, governments have raised money to fund spending by issuing bonds which are bought by a range of investors. But some nations are now self-funding their stimulus packages by issuing and then buying their own bonds, thereby creating money out of thin air.

This funding mechanism bypasses the need to pay interest to investors on newly issued money and is at the heart of MMT – the fusion of fiscal and monetary policy. MMT links fiscal policy to monetary policy by using the central bank to buy the debt (bonds) issued by its government. If all of that sounds double Dutch, then let me share with you another explanation.

In a recent article in the Sydney Morning Herald, Don’t add government debt to your list of things to worry about, economics writer, Jessica Irvine, quite rightly points out that the Reserve Bank of Australia (our central bank which is responsible for monetary policy) has exhausted its traditional method of stimulating our economy (lowering interest rates). So, the RBA is helping the federal government (which has responsibility for fiscal policy) stimulate the economy by buying Australian government bonds.

In answering the question: Where does the stimulus money come from?, Irvine writes:

A large part of (it) … will come from the Reserve Bank. Weird, you might be thinking. Does that mean that one arm of government – albeit a statutory independent agency – is now lending to another arm of government, the executive branch? To whom, in such a situation, do taxpayers ultimately owe the money? Themselves? The answer is: well, yes. … And if we only owe the money to ourselves, what’s to stop us spending as much as we like? Another very good question, and one to keep in mind in the strange debates to come.

Irvine underscores that MMTers would prefer that the government simply print the money, rather than borrow it from the private sector in a money-go-round they decry as “corporate welfare”. According to MMT, government issued bonds aren’t strictly necessary. Instead of issuing $1 in bonds for every $1 in deficit spending, the Australian government could just create the money directly without issuing bonds.

The belief that governments do not need to issue public debt is supported by Dr Steve Hail, a lecturer in economics at the University of Adelaide and an MMT proponent. He sees no need to match public deficits with debt issuance for a currency issuing government. Such governments should gain the necessary political approval for additional spending and then be able to do it. “Spending is self-financing,” he asserts and “does not have to be funded”.

In a recent article Dr Hail wrote for the news and opinion website, Independent Australia, he stated:

… central governments like those of Australia, New Zealand, the USA, the UK and Japan face no purely financial constraints at all. Never mind a “money tree”, they have a money computer. They can create limitless amounts of their currencies when they need to do so. They are not dependent on the goodwill of the bond market, or of credit ratings agencies. They are monetary sovereign currency issuers.

It’s clear that MMT is a controversial idea that has detractors and admirers worldwide. The coronavirus pandemic has moved MMT from the fringes of economic debate to centre stage. It is receiving unprecedented attention now that policymakers are (knowingly or unknowingly) implementing some of its basic tenets. This is MMT’s moment in the sun and only time will tell if it works as advertised.

For the record, I do not believe that government deficits are inherently bad. Nor do I believe that government budgets, like household budgets, should always be in the black. So, my belief is that MMT should not be dismissed out-of-hand nor should it be approached with a pre-existing economic ideological bias.

Remember, the economics profession (it is jokingly said) is the only field where two people can win a Nobel prize for saying the exact opposite thing!

PS. Professor Stephanie Kelton is the public face of MMT and its foremost evangelist. Her recently released book, The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy, provides a comprehensive and lucid explanation of MMT.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How will the world pay for COVID-19 stimulus packages?

Newsday.com: Cartoonist Gary Varvel
DEFICIT SPENDING ON A GIGANTIC SCALE

The economic damage caused by the coronavirus is mounting across the globe. In a frantic scramble to cushion economies, governments launched massive stimulus programs. These unprecedented fiscal and monetary interventions come with a staggering price tag. Sovereign debt is set to soar with governments around the world embarking on one of the greatest peacetime borrowing binges in history.

Most governments run annual deficits as they spend more than they collect. Few have spare surplus funds sitting around that can be redirected to support struggling households and businesses. So, countries are piling on more debt to fund emergency spending to help citizens cope with the economic ravages of the pandemic. Many people understandably worry whether the world can afford this avalanche of new borrowing.

The good news is that debt is incredibly cheap at the moment. Prior to the pandemic, the world was awash with savings which pushed interest rates very low. As global interest rates are now even lower, it has never been cheaper for governments to borrow. Governments are collectively borrowing trillions of dollars to enable them to spend trillions of dollars in a synchronised shock-and-awe response to the pandemic.

A classic way for nations to “print” emergency money is to borrow it by selling government bonds. This increases national public debt and is how governments have historically dealt with economic shocks such as recessions, financial dislocations and wars. During such crises, investors prefer the safety of government bonds in lieu of putting their money into the stock market, corporate bonds or real estate.

In Australia, the federal government is expected to fork out in excess of $200 billion to keep the economy afloat during the pandemic-induced downturn. The first federal response cost $17 billion, the second round cost an additional $66 billion and the third cash splash rang the bell at $130* billion. All up, Australia’s coronavirus stimulus packages are equivalent to nearly 10 per cent of the size of our economy.

As explained by ABC business reporter, Gareth Hutchens:

Essentially, the Government will pay for the stimulus package by creating the money and racking it up as debt. Officially, it will raise the money via the Australian Office of Financial Management (AOFM), which borrows money on behalf of the Government by selling Australian Government bonds.

Institutional investors (e.g. local and overseas banks, superfunds and foreign countries) will be buyers of the bonds. However, as noted by Gareth Hutchens:

The ultimate buyer of the Government bonds could be the Reserve Bank, because at the moment, the RBA is stepping into the market regularly to purchase as many Australian Government bonds as necessary to keep the interest rate, the “yield”, on three-year Government bonds around 0.25 per cent.

The yield on Australian government bonds is the interest rate we pay on our nation’s debt. Given that the current rate of inflation in Australia is around 1.8 per cent and is expected to decline further, we are effectively borrowing for free. This is good news for Australia, yet many Aussies are fearful of our level of sovereign debt.

A recently released paper by think tank, The Australia Institute, “The Budget Surplus Objective: An example of how economics is broken” highlights the folly of this fear of government debt. Citing the report, economics writer, Greg Jericho, states:

… given Australia’s nominal GDP is expected to grow at around 4.5%, if government borrowing pays lower than that (as is currently the case) debt levels will fall over time. This is because the economy is growing much faster than is the interest on the debt. … It means to quote Larry Summers, the former chief economist of the World Bank, that “public investment is essentially costless – the classic free lunch”.

One of Australia’s foremost economic commentators, Chris Richardson, from Deloitte Access Economics, has gone public to ameliorate fears that the government has saddled our children with massive debt. According to Richardson, the budgetary impact of the fight against the coronavirus will have a much smaller impact on Australia than many expect.

Notwithstanding the “jaw-dropping” size of Australia’s stimulus package, Richardson stressed that we have not sentenced younger Australians to a lifetime of higher taxes and sub-standard services.

Although the dollars are unprecedented, what’s even more unprecedented are the interest rates we’ll be paying on this new debt. Never in the two thousand years of recorded history of interest rates has it been cheaper for governments to borrow. Never. And markets aren’t fazed in the slightest: they reacted to the latest package by dropping the rate on 10-year Commonwealth borrowing substantially further.

Richardson went on to say:

Australia’s economy will grow again on the other side of this (COVID-19) war. So, here’s a simple suggestion: Let’s just let our debts from this new war simply become a smaller share of our growing economy over time. That’s what we did with the war-time debts of the past. And it’s probably the smart play this time too. Self-imposed flagellation rarely makes sense. The same policies that were sensible ahead of this crisis will remain just as sensible after it too.

As counter-intuitive as it sounds, government deficits can be very helpful to an economy. Nobel prize-winning economist, Joseph Stiglitz, has long argued that deficit spending can be a major stimulus to economic growth and can actually lower long-term government debt. When economic growth is restored and unemployment falls, tax revenues increase which eventually lessens the need for a government to borrow.

Another world-renowned economist and Nobel Laureate, Paul Krugman, has often observed that government finances are not like personal finances. While consumers on a spending spree ultimately have to pay the piper, a government’s borrowing strategy directly affects economic growth and this delivers social benefits.

All of this means that increased national debt from COVID-19 is not our enemy – it will not leave a deep scar on our economy nor will it result in a day of reckoning. This will be hard for many Aussies to accept as they have been conditioned to believe that debt is bad and that any political leader who does not pledge to lower Australia’s national debt is not worthy of their vote.

Even though Australia has long had one of the world’s lowest debt-to-GDP ratios, we Aussies display an irrational and emotive attitude to government debt. Hopefully, the pandemic will challenge some long-standing economic theories, including the idea that responsible government means having no national debt.

The notion that governments can sustain levels of debt far greater than previously thought is the centrepiece of an economic model called Modern Monetary Theory (MMT). It proposes that governments can spend freely as they can always create more money to pay off debts in their own currency. Orthodox economists see MMT as a fringe economic movement with some labelling it as “voodoo economics”. But it is worth exploring which I do in my next blog post.

For now, please do not be spooked by the debt bogeyman.

*It has since transpired that the government’s $130 billion JobKeeper program will cost only $70 billion.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How COVID-19 illuminated the flaws in Australia’s system of government

Source: ABC News – Premiers sling barbs at each other
DITCH THE MIDDLE MAN – NO MORE STATES

Around the world, millions of people have been medically tested for COVID-19, and we have been tested in other ways as well. National economies, political leadership and individual resilience have also been tested. Additionally, the pandemic has tested the integration and coordination of Australia’s three-tier system of federal, state and local governments.

While Australia’s multi-level law-making structure looks like a neatly layered cake, there are hidden overlaps which cause blurred lines of separation. History shows that whenever there is a crisis or issue in Australia which transcends state borders, the inherent weaknesses in our governance structure are laid bare. The latest example of this is the novel coronavirus outbreak.

During the height of the pandemic, it was not possible to secure a nationally consistent approach to schooling. Federal and state governments expressed differing viewpoints, leaving parents confused. The PM was blindingly clear in wanting kids to continue attending classrooms. However, the states undermined him by encouraging parents to home school their children.

While education is a state government responsibility, helping Australians weather the economic consequences of the pandemic falls largely to the federal government. That’s why Scott Morrison asked premiers to keep schools open so that parents could continue to work and “put food on the table”.

With no clear chain of command on this issue, simmering tensions between the prime minister and state premiers were exposed. It was impossible for the PM to get the premiers to fall into line. Rebellious states – led by NSW Premier Gladys Berejiklian and Victorian Premier Daniel Andrews – rushed to introduce remote learning so that parents could keep their kids home.

The conflicting messages from the states and the federal government about whether it was safe to send kids to class was seized upon by the media which had a field day reporting the jostling for power. NSW, Victoria and the ACT broke ranks by making unilateral announcements about schooling arrangements which put them at odds with their federal counterparts.

Gladys Berejiklian was also involved in another political football match – the Ruby Princess fiasco. Australians were treated to the unedifying spectacle of political finger pointing over who was responsible for allowing the ill-fated ship to dock in Sydney and for passengers to disembark unchecked.

Authorities passed the buck with NSW officials claiming that they were given permission by the Australian Border Force (ABF) to let passengers off the ship. The ABF returned serve by laying the blame at the feet of NSW Health. A Special Commission of Inquiry is underway to establish which authority ultimately gave the green light to passenger disembarkation.

Another area where Australian governments were not on the same page was lockdown rules. The nationwide lockdown announced by the PM was, quite rightly, accompanied by a warning that police would charge citizens who flouted the rules. But the raft of restrictions on activities varied, depending on where you live.

Individual state and territory governments decided the specifics of the lockdown in their jurisdiction. Each introduced differing measures to restrict movement and this caused confusion among the populace regarding the do’s and don’ts of going outside. For example, Victoria closed golf courses while NSW left them open.

There was a crackdown by police around the nation on “non-essential travel”. Drivers were told that they were required to have a “reasonable excuse” for leaving home. It was clear that popping out to buy groceries and medical supplies constituted essential travel. However, other reasonable excuses for taking to the roads varied from state-to-state.

The legality of driving lessons turned out to be a hot-button issue. In Victoria, a hefty fine of $1,652 was issued to a 17-year-old learner driver as her driving lesson was classified as non-essential travel. The fine made headlines around Australia and, following public backlash, it was withdrawn.

NSW Police took to Facebook to assure citizens of New South Wales that driving lessons were regarded as a “reasonable excuse” to leave home. Police in Tasmania also stated that driving lessons were permitted. South Australian authorities similarly gave the green light to driving lessons provided that they were supervised by a household member.

We also had to contend with state border closures which left Australia’s federal model in strange territory. While the prime minister closed our national borders to foreign travellers, many premiers took the unprecedented step of shutting their domestic state borders to segregate themselves from the rest of the nation. The premier of WA, Mark McGowan, summed it up this way: “In effect, we’ll be turning Western Australia into an island within an island – our own country”.

Of course, Australian states and territories are not independent sovereign nations but part of a single Commonwealth of Australia. This view is supported by George Williams, the dean of law at the University of NSW who opined that there is a constructional issue in closing a state border.

We have section 92 of the Australian constitution and it says trade, commerce and intercourse amongst the States shall be absolutely free. The idea is that we are one country, and a person should be entitled to travel around Australia as they wish.

While closing state borders caused ructions, re-opening them has created even more political drama. NSW Premier, Gladys Berejiklian, claimed that those states keeping their borders closed were “hindering” the nation’s economic recovery. WA Premier, Mark McGowan, hit back saying that he would not be “bullied” by a state (NSW) which allowed the Ruby Princess disaster to unfold.

The Queensland Premier, Annastacia Palaszczuk, was more diplomatic in her response to NSW saying that Queensland would be “seeing southerners return to our glorious sunshine state” towards the end of the year.

It is instructive to note that there was never national advice issued by the federal government recommending that states should close their borders.

In many parts of the world, the catch-cry for coronavirus is “we’re all in this together”. Yet, when it comes to Australia, each state and territory stands somewhat alone. This is the result of parochial decision making at a state level and the power struggle between different levels of government.

I acknowledge that the political actors involved in this life and death drama have worked tirelessly to stop the spread of the pandemic and are to be thanked. While mistakes have been made, my biggest criticism is aimed squarely at the stage upon which Australia’s politicians had to perform – a three-tier system of government which pitted authorities against each other.

There has long been debate in Australia about whether to abolish the states. Former PM, Bob Hawke, is one of many prominent Australians to have called for a federation overhaul. The complex nature of contemporary issues facing Australia – like climate change and now a global pandemic – is beyond the current three-tier structure as there is no express head of power for “the environment” or “pandemics”.

The inconsistencies between the states have long frustrated me. I once worked for an organisation which spent over a decade lobbying government for uniform credit legislation throughout Australia. I watched with anticipation John Howard’s efforts to secure uniform gun legislation following the Port Arthur massacre. And I’ve listened to upwardly mobile Australian executives with children complain about the lack of uniformity in school curricula around the country.

Let’s be honest – the only reason we have three levels of government is due to the burden of history (or path dependency). Australia started out as six independent colonies. The joining of these colonies into a federation of six states to form the Commonwealth of Australia was a good idea in 1901. Today, I humbly submit that the federal/state structure of government has passed its use-by date.

The Founding Fathers of our great nation would not have envisaged the buck passing, endless bickering and unnecessary duplication that have come to characterise federal/state relations. Blaming Canberra first is the default modus operandi for the states and my sense is that many Australians are sick of politicians playing the blame game. No system of democracy is perfect – but surely, we can do better than what we currently have in place.

It’s time to scrap the states.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting

How world leaders have responded to the coronavirus crisis

Credit: Forbes online
LEADERSHIP IN A TIME OF CONTAGION

The need for effective political leadership heightens during a national crisis. Citizens expect their governments to rise to the challenge and make wise choices. This puts the political judgments of presidents and prime ministers under the spotlight. The populace expects them to provide concrete solutions to serious threats.

The once-in-a-century COVID-19 pandemic has forced leaders to make diabolical choices, creating a watershed moment in politics. According to one academic, not since the height of the Cold War have the stakes been higher. Governments are making finely-balanced decisions which represent stark trade-offs between life, death and the economy.

This burden weighs heavily on political leaders and, for many, it represents their ultimate leadership challenge. Decisions need to be made rapidly and if you get it wrong, you will negatively impact the lives and livelihoods of millions of your fellow citizens. The COVID-19 mega-crisis has tested the mettle of all world leaders and some have failed abysmally.

Every drama needs at least one villain and four political strongmen stand out for special condemnation. The autocratic leaders of Brazil, Belarus, Nicaragua and Turkmenistan denied the threat that the coronavirus posed to their nations. This resulted in them being dubbed the “Ostrich Alliance” by a Brazilian professor of international relations due to their head-in-the-sand attitude.

As the dreaded COVID-19 ripped across the world, these shameful presidents showed disdain for coronavirus science and failed to take defensive measures against the pandemic. The coronavirus crisis has laid bare their collective incompetence with their flawed responses unnecessarily killing many of their respective citizens.

Standing above these four ostrich leaders is our archvillain, Donald Trump, who has also refused to take the pandemic seriously. He was castigated for his dismissive early response to the health warnings about an imminent threat. Trump’s contempt for science is no secret and his failure to implement a nationwide mitigation strategy has cost his nation dearly.

The US has the ignominious honour of having the world’s highest COVID-19 infection rate with over two million confirmed cases. As of this writing, over 114,000 Americans have died from COVID-19 and the death toll is expected to rise. These tragic figures are the direct result of Trump underestimating the virus’ contagion and deadliness.

While no one expected inspired leadership from the president, his disastrous handling of the crisis has put him in a league of his own. His presidency has turned deadly with many of his citizens dying needlessly due to his breathtaking denial and delay. Trump’s irresponsibility is almost criminal with his erratic behaviour proving that he is clearly out of his depth.

Three other heads of government have not covered themselves in glory in response to the threat. Mexico’s President, Andrés Manuel López Obrador, urged Mexicans to “live life as normal”. In Indonesia, President Joko Widodo peddled nonsense about “herbal remedies”. Meanwhile, Philippines’ President, Rodrigo Duterte, issued orders to kill (“shoot them dead”) quarantine violators.

Not surprisingly, the lack of transparency displayed by China has generated much disquiet. The Chinese government is accused of acting too slowly during the early stages of the outbreak. China was subsequently praised by authorities for implementing unprecedented measures including quarantining the entire city of Wuhan to slow the spread of the coronavirus.

European leaders do not escape criticism. In the grimmest of league tables, Britain has the second highest rate of COVID-19 deaths in the world while Italy comes in fourth. Boris Johnson and Giuseppe Conte both botched their initial responses. Johnson gave the virus insufficient attention as he was focussed on Brexit while Conte underestimated the potential spread of the virus.

It is instructive to note that many of the world’s inept leaders are populist politicians. According to two Australian academics, populist leaders – such as Donald Trump in America, Jair Bolsonaro in Brazil and Joko Widodo in Indonesia – have an incentive to mobilise fake news and information as:

… they are not capable of adopting evidence-based deliberation as a strategy. Their ignorance of science reaches a point where truth and lies have no clear boundaries. In catastrophes, the use of such ambiguity to promote a political agenda is magnified. … Populist governments are infamous for “silencing” science. This is because evidence-based policy is not compatible with their approach to public policy.

With regard to Sweden, its unique response to the novel coronavirus has been greeted with mixed reactions. Under the leadership of prime minister, Stefan Löfven, the Swedish government has taken a hands-off approach to managing the pandemic. Rather than declare a lockdown, Sweden asked its citizens to practice social distancing on a mostly voluntary basis while keeping schools, restaurants and most businesses open.

Swedish authorities have not officially declared that herd immunity (when more than 60 per cent of the population has had the virus) is their underlying goal. But many believe that augmenting immunity is part of the government’s strategy. With one of the highest COVID-19 mortality rates in the world, Sweden has been accused of playing Russian-roulette with citizens’ lives.

While the pandemic brought out the worst in some leaders, it provided a stage for many others to shine. This is particularly the case for the Global First Movers Group. This elite club consists of an eclectic group of countries – Australia, New Zealand, Austria, Denmark, Norway, Greece, the Czech Republic, Israel and Singapore – that adopted a “go hard and go early” strategy to limit the spread of COVID-19.

The club is led by Austria and all members have done exceptionally well in suppressing the coronavirus outbreak. Austria is one of the standout countries in dealing with the virus. Singapore too won plaudits for its aggressive testing and tracing campaign. The efforts of Australia and New Zealand have also been hailed with both nations recording a case-fatality rate below 1.5 per cent.

Another way to look at the effectiveness of political leadership during the pandemic is through the lens of gender. It is claimed that female leaders around the world rose to the occasion by acting boldly and swiftly in making the unpopular call to shut down life as we knew it. A Forbes article titled – What Do Countries With The Best Coronavirus Responses Have in Common? Women Leaders – provides a precis of how women have managed the crisis with aplomb. Forbes noted:

Angela Merkel, the Chancellor of Germany, stood up early and calmly told her countrymen that this was a serious bug that would infect up to 70% of the population. …

Among the first and the fastest responses was from Tsai Ing-wen in Taiwan. …

Jacinda Ardern in New Zealand was early to lockdown and crystal clear on the maximum level of alert she was putting the country under – and why. …

Iceland, under the leadership of Prime Minister Katrín Jakobsdóttir, is offering free coronavirus testing to all its citizens, and will become a key case study in the true spread and fatality rates of COVID-19. …

Sanna Marin became the world’s youngest head of state when she was elected last December in Finland. It took a millennial leader to spearhead using social media influencers as key agents in battling the coronavirus crisis. …

Norway’s Prime Minister, Erna Solberg, had the innovative idea of using television to talk directly to her country’s children.

Around 10 per cent of countries are led by women who preside over just four per cent of the global population. While the performance of countries with a female head of state is a very small category, it can be safely suggested that their performance has been quite positive. In the words of The Guardian, “Plenty of countries with male leaders have done well. But few with female leaders have done badly”.

It is axiomatic that not all heads of state have passed the COVID-19 crisis management test. The pandemic has exposed feeble leadership among world leaders with the US paying the highest price for its gross negligence. A combination of slow starts and mixed messages have seen many leaders erode trust and unleash unrest.

No wonder the coronavirus leadership test has come back negative for some.

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting