There is no doubt that the coronavirus is causing enormous disruption to society and to the economy world-wide. However, if anyone can tell you what will happen in the next few weeks and months they are either just guessing or lying. President Trump is probably going to make America sick again. But the authorities in most countries are probably not telling the whole story. Based on serious academic study in countries like Canada the situation in Iran is probably being under reported by two orders of magnitude. I suspect a similar story holds in China.I wish the media would refer to 'reported cases', not just 'cases'.
The reason why Spanish flu is so-called is that the Spanish authorities who had not participated in the First World War reported accurately what was happening. Their numbers were therefore proportionately larger than countries like the USA, the UK, Germany and France who were still fighting the war and were concerned about the effect on morale. In fact, the first case was reported in Kansas and President Wilson himself contracted the disease.
So it is easy to be critical of the authorities and nervous or even scared. But let’s try and look on the positive side. What might happen as a result of this pandemic?
Many businesses will be badly affected and President Macron’s statement that no business in France will go bankrupt is utter baloney. But many businesses will do well. It may not be very edifying to watch lunatics panic buying toilet rolls but it’s good for the manufacturers who are mainly in the UK and the supermarkets and even corner shops will do well as the nation stocks up. Other businesses could do well if they can switch quickly to manufacturing the equipment that the National Health Service needs: testing equipment, ventilators, personal protection equipment, medication and so on. Soap manufacturers are doing well as the majority of people are washing their hands more often than ever before. If we’re not eating and drinking in pubs and restaurants then we’re eating and drinking more at home. There will be winners as well as losers.
As people are being asked to work from home they will need the tools to do so. One of these is the video conferencing software from Zoom. Its stock fell sharply this week, possibly on Trump’s ludicrous announcement that business would be back to normal by Easter. If true, and pigs might fly, then there would be less demand for this software but even with this week’s fall its stock is up about 30% in the last five weeks, while the Dow is down roughly 24% this year.
There is a massive need to reorder the supply chains in many industries. For decades now developed countries have been outsourcing their supply chains to China. That has been driven entirely by economic arguments with little thought of labour conditions, human rights and so on. This is the fourth outbreak of flu to originate in China in less than 20 years; SARS, swine flu, bird flu and now this coronavirus. Our car manufacturers have had to close their operations largely because they rely on Chinese suppliers for some components. With some models it may just be one key component where they have foolishly given all the business to one low cost Chinese supplier. Or it may be that a tier one supplier based in Europe sources from China some components for a sub-structure. I would hope that all these businesses are reconsidering how they might source more locally, preferably here in the UK.
This is also true of food. We still import over 40% of our food. Some imports are inevitable, for example, fruits that can’t be grown economically here. But I was disappointed that the government didn’t class farmers and their employees as key workers. If it is recognised that we must be allowed to leave our homes to buy food and therefore food retailers must stay open, surely the same applies to food producers, both farmers and processors. One muppet close to the government recently suggested that we didn’t need our farmers at all. I would think we should prioritise reducing imports of food to below 20%.
We also import a great deal of our medicines. We have some fine drug companies but the crisis shows that we should invest in more, particularly those that make drugs that are no longer under patent. The crisis has also showed that we have not maintained sufficient capacity in the NHS for hospital critical care beds. Germany has one of the lowest rates of mortality with the coronavirus and one of the highest numbers of hospital beds per head of population, over four times as many as the UK. Just as we have a reserve force in the armed forces we should do the same in the health service. Instead of asking retired doctors and nurses to return to work, and amazingly thousands are doing so, we should be able to call on a reserve force of hundreds of thousands. In the UK the regular armed forces number 146,500 while the reserves are 36,430, 24%. The plan is to increase that proportion. The NHS is one of the largest employers in the world, and is the biggest in Europe, with over 1.3 million staff. If we applied this idea to the NHS then the number of reserve staff could be targeted at 312,000.
As more and more people work from home it may turn out that this is more efficient and economical for firms. If that is the case then both business costs and personal costs may reduce. Businesses would not need to maintain such large offices while individuals may not need their expensive season tickets. With fewer commuters and less pressure on the trains maybe we don’t need HS2 after all which was originally justified on capacity grounds. Once we are past the pandemic, individuals would be free to travel and employers would still call face to face meetings as needed but a lot of cost and stress could be reduced.
This would have an impact on the environment. During the outbreak in China levels of pollution dropped and air quality improved. Now that the restrictions are being lifted, already the pollution is going back up. China is probably one of the most polluted countries in the world but with a quarter of the world’s population now under lockdown there will be environmental benefits.
Our children both now live in Spain and we have trips planned there next week and in July. Next week’s trip is obviously off though EasyJet are still trying to get us just to change dates. We are extremely disappointed and will miss some family birthdays. Once things are back to normal in both countries we will be back on a plane. But many may reconsider. Perhaps as many as a million UK residents are stuck overseas with not much money and no flights back. Some airlines will go to the wall and there may be reduced capacity when this is all over. In that event prices will rise and there will be less flying. Greta will have got her way.
Many liken this situation to the World Wars and some comparisons are valid. Only war before has caused cancellation or delay of big sporting events. But the government is trying to call for community action and there are signs of a positive response. We have all to be responsible to beat this thing. We have to pull together even if we cannot meet to do it. In my Livery Company I am planning to organise a conference call of all the members I admitted in my year as Master in 2016. I am going to ask everyone how the crisis is affecting their work and I am hoping that in the process we will learn from each other.
And when my grandchildren ask me what I did in the War against the coronaviris what will I tell them? Well, I hope I can say that in the absence of travel I kept in touch with family and friends through any virtual means available even if that means I have to learn how to use the wretched What’s App. I have the time now to spring clean in a serious way dumping, shredding, donating, recycling, giving or throwing away something each and every day. My friend Professor Malcolm McDonald has asked me to co-author a book with him. Malcolm has published 50 books, one of which sold half a million copies, so, though this is somewhat daunting, I now have the time. And I’ll certainly carry on writing these blogs.