Daily Times

Recently, an exponential increase in the spread of coronavirus in Pakistan, after the lockdown was 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 the WHO, is too high at around 24 per cent as of this week.

Thus, in the background of this very dynamic and evolving pandemic, looking at countries, which have successfully able to control the spread while minimising 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 to 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 several benefits. Firstly, it reduces the possibility of overloading hospitals and negative externalities from COVID, for example, 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 can over-shoot the herd immunity threshold, which is around 60 per cent of the population. For example, in the most popularly used epidemiologist modelling in economic research, the SIR model with an infection rate R0 of 2.6 and infectious period of 5.5 days and 0.0013 per cent of population infected at the start of the simulation. Uncontrolled, this would lead to 75 per cent of the population being infected with a peak of 13 per cent with 99.99 per cent of infections to occur in 200 days. On the other hand, if control methods are put to control peak at 1 per cent, only 56 per cent population will be affected and 99.99 per cent of them will be infected in 330 days.

To develop policy, the policymakers need to work backwards from the end

Working Backwards to Develop Policy

To develop policy, the policymakers 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. The optimal policy would involve a 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. For example, antiviral treatment, use of N95 masks effective 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 waiting 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 can over-shoot the herd immunity threshold. Nevertheless, this alone cannot mitigate COVID 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 an intermittent lockdown in the periods of a high rate of infection spread and easing of lockdown during the low rates. Provided that the transactions costs of opening and closing the businesses are not too high. Furthermore, the 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 reoccurrence and cyclical peaks of COVID. For example, during the Spanish flu of 1918, the second wave was more deadly than the first.

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