Daily Times

Recently an exponential increase in the spread of Coronavirus in Pakistan after the lockdown has been lifted has been a serious source of concern for many. The WHO has issued a letter suggesting to re-impose a strict, intermittent lockdown targeting localities with high coronavirus spread. The infection rate of Coronavirus positive cases in Pakistan, according to WHO is too high at around 24 percent as of this week.

Thus, in the background of this very dynamic and evolving pandemic, looking at countries those have successfully been able to control the spread while minimizing the economic losses, suggests that doing nothing does not remain a public policy choice.

Importance of Public Policy and “Flattening the Curve”

To understand the importance of public policy intervention one needs to know the answer of the following questions: What does the lockdown or Social distancing do? How does flattening the curve help combat the situation? To make things clear flattening the curve or social distancing is no panacea. However, it does provide a number of benefits. Firstly, it reduces the possibility of overloading hospitals and negative externalities from COVID-19, e.g. people with serious illness not getting access to doctors or medical facilities due to being overloaded. Secondly, it buys time for more effective treatments to be developed. Thirdly, it reduces the extent to which the disease is able to overshoot the herd immunity threshold, which is around 60% of the population. For example, in the most popularly used epidemiologist modeling in economic research, the SIR model with an infection rate R0 of 2.6 and infectious period of 5.5 days & 0.0013% of population infected at the start of simulation. Uncontrolled this would lead to a 75% population being infected with a peak of 13% with 99.99% of infections to occur in 200 days. On the other hand, if control methods are put to control peaks at 1% then only 56% of the population will be affected and 99.99% of them will be infected in 330 days.

The second policy, which is more suitable for Pakistan, would be to pursue some set of social distancing measures

Working Backwards to Develop Policy

To develop a policy, policy makers need to work backwards from the end. In the long run, we may reach one of the three endgames: 1) Hold infections to a moderate level until whenever an effective vaccine becomes available, perhaps in 12 to 24 months. Optimal policy would involve trade-off between controlling infection rates vs the loss from holding economic activities. 2) Get some good news that leads us to choose to allow the infection to spread at a more rapid, but controlled, rate. Eg antiviral treatment, use of N95 masks effectively or virus is less harmful. 3) Do not adopt preventive policies and reach herd immunity level, currently seen in Pakistan. However, current simulations in economic research suggest very bad health and economic consequences of reaching this endpoint rapidly.

Two Types of Policies Available

Given the above information, Avery et al (2020) suggest there are two types of policies that any government can pursue while awaiting for an effective vaccine. One, pursue an aggressive policy of testing and contact tracing, as seen in South Korea and Japan. However, it requires a capacity for testing and public health outreach, which is far beyond what can be implemented in Pakistan today due to limited resources and being a developing country. If possible this would help reduce the extent to which the disease is able to over-shoot the herd immunity threshold. Nevertheless, this alone cannot mitigate COVID-19 and once strong social distancing is adopted the incremental benefit from this is limited. This method could work if Pakistan manages to decrease R0 less than 1 and would require geo-location data and overall is beyond the current capacity of Pakistan or any developing Nation.

The second policy, which is more suitable for Pakistan, would be to pursue some set of social distancing measures. Individual restrictions can be seen as lying on a continuum in terms of the ratio of economic costs incurred per unit of virus-slowing. This could mean rapidly adaptive policy with intermittent lock down in the periods of high rate of infection spread and easing of lockdown during the low rates. Provided that the transaction costs of opening and closing the businesses are not too high. Furthermore, universal wearing of high-grade face masks and gloves could also help keep the spread in check.

However, absent successful contact tracing reduction in social distancing would likely keep R0 greater than 1 and could lead to recurrence and cyclical peaks of COVID-19 as during the Spanish flu of 1918, the second wave was deadlier than the first one.

Therefore, it is of utmost importance to keep the spread of the virus in check at this stage, before the health and economic infrastructure collapses and the negative externalities extend to those patients with other illness who will not be able to get treatment in time to save their lives.

The writer is an economist, and former lecturer of economics in the UAE. She will shortly pursue a PhD in Economics