Lockdown: How SA flattened its economy instead of the curve – Johannes Wessels

South Africa has been in lockdown for over 130 days and counting. Ask any man or woman in the street and they will have an opinion on whether or not the lockdown has helped to curb the spread of the virus. What cannot be debated is the fact that the extended lockdown has crippled the economy. The reinstated alcohol ban and the banning of cigarette sales have also meant more job losses and millions lost in taxes – all while the black market flourishes. In this extract, Johannes Wessels, director at EOSA, shows how South Africa’s infection rate has surpassed other countries, despite harsh and unconstitutional regulations. – Claire Badenhorst

Lockdown is international ‘worst practice

By Johannes Wessels* 

This is an extract of an article that is available here.

Johannes Wessels

Day 132 after registering the first 100 Covid infections in SA made it clear how unsuccessful the harsh lockdown has been: South Africa’s number of Covid infections/10 000 of the population despite the world’s harshest lockdown with a curfew, mandatory face masks and an alcohol ban passed that of a country that has never implemented lockdown, never made face masks mandatory and would have continued to buy South African wines were it not for the SA government that had banned the transport (and therefore export) of wine. (Figure 1)

Like that legendary village in Gaul, home of Asterix and Obelix, held out against the might of Caesar’s Rome to maintain local culture, Sweden kept the constitutionally protected rights of its citizens intact (freedom to move, associate and work) whilst most of the world capitulated with lockdown measures before the might of fear brought about by flawed modelling of the Covid threat.

lockdown

South Africa’s government early on sacrificed these rights, transforming its citizens to subjects, all to ensure that the infection curve would be flattened to get ready for the Covid storm. Figure 1 clearly shows how the curve was flattened, but today we know that it was not utilised to ensure Covid-ready hospitals with well-motivated staff.

The BBC had shown the world that the ‘flattening of the curve’ was not used for that, at least not in the Eastern Cape. The Minister of Health, Zweli Mkhize, however disputed the BBC findings, stating that, apart from the fact that the EC hospitals:

  • had to be cleaned;
  • should follow medical waste protocols;
  • require more beds;
  • needed more nursing staff;
  • had to procure more ventilators, and
  • should get rid of the rats,

the province was ready for the Covid crisis.

Read also: Map shows how world sees SA: Covid-19 lockdown is a huge failure

Easier to exterminate hospital rats than tender rats?

Mkhize made no mention that these problems were probably linked to the government’s continued feeding of the tender rats.

Covid contracts in the Free State also proved that, in the case of the sons of Magashule, rotten apples don’t fall far from the tree.

The recent solemn presidential newsletter promising action against greedy perpetrators had triggered a trickle of hope and an avalanche of disbelief: South Africans increasingly experience the 2017 ANC elective conference merely changed the era of the Father of Duduzane (who talked against corruption) to the era of the Father of Andile (who also talks against corruption).

As EOSA stated a year ago, the Ramaphorian air spray can no longer conceal the ANC stench.

Ninety One director reckons ‘bricks-under-bed’ the best practice against Covid

Despite the fact that lockdown has flattened the economy immensely more than the rate of infections or casualties, vast segments of business and the media continue with messages supportive of lockdown.

Quicker than a minibus taxi can skip a traffic light, FNB rushed to sponsor Andile Ramaphosa of Bosasa fame to install, for R6m, Perspex shields and sanitise equipment in Gauteng taxis. He claims he is not personally benefiting from the contract awarded to SDI Force (an NGO).

Jeremy Gardiner, director of Ninety One, in a webinar of Brenthurst Wealth (August 6) described lockdown ‘as international best practice: everyone else is doing it’. He was also very upbeat on the rand, predicting an exchange rate to the dollar of R16.50 by December and R15.50 end of 2021.

Hopefully for investors, Ninety One will read investment risks better than national policies and its effect on the economy.

Captains of business and industry should rather take note of the negative impact of lockdown not only on economic growth, but on liberty to trade. They should stand up to government’s irrational interferences in the inner workings of enterprises (whether they could trade, what they may trade and produce), rather than bending the knee for small mercies or helping government maintain the fear of Covid.

Research findings less important than irrational fear

The initial claim of ‘listening to science’ for guiding government’s lockdown strategy has worn thin. Serious academic research initiatives recently concluded lockdown measures have no impact on mortality: especially considering that ‘death by Covid’ internationally constitutes a mere 2.04% of deaths, far lower than natural deaths due to old age. Three examples suffice.

Bjornskov: Lockdowns have been counter-productive

On August 2, the Social Science Research Network published a paper by Christian Bjornskov of the University of Aarhus, Denmark.

Comparing the weekly mortality rates of 24 European countries in the first half of 2020 with the average weekly mortality rates of 2017-2019, Bjornskov states the average European country had negative excess mortality in the first ten weeks of the year with the 24 countries suffering 200 fewer deaths per million inhabitants (8.7%) compared to the previous 3 years. From week 11 to 22, the 24 countries experienced an excess mortality of 248 deaths per million inhabitants (10.7%).

Applying the lockdown stringency data of the Blavatnik School of Governance (Oxford) with the weekly mortality rates, the 12 countries in the ‘hard lockdown’ group experienced 372 additional deaths per million while the other 12 only experienced a mortality excess of 123: three times lower. “This simple pattern may indicate that lockdowns have been directly counter-productive.” (Figure 2)

lockdown

Read also: SA economy stagnates while government tweaks lockdown – Dwaine van Vuuren

Acemoglu: Targeted interventions outperform uniform lock-downs

In a paper published in July by Economic Research Southern Africa (ESRA), Daron Acemoglu and other researchers from MIT concluded that:

  • Policy differentiation that targets risk by age groups significantly outperform optimal uniform policies like a national lockdown.
  • Most of the gains can be realized by having stricter safety strategies for the oldest group.
  • A strict and long lockdown for the most vulnerable group enables much less strict lockdowns for the lower-risk groups.
  • If policy-makers go for safety-focus and try to limit the mortality rate in the adult population to less than 0.2%, they have to factor in economic losses amounting to 37.3% of one year’s GDP.
  • If they prioritize the economy and attempt to limit economic losses to be less than 24.8% of one year’s GDP, then society could suffer a mortality rate as high as 1.05%.

(EOSA reckons the 0.2% Covid casualty target, not to mention the 1.05%, is far too high.  Worldwide the Covid-fatalities now is 0.00935% and in Belgium with the highest fatality rate the percentage is 0.085% – far below the 0.2% that strict and long lock-downs would achieve.)

Wieland: Decline in Germany not due to lockdown

In one of Elsevier’s academic journals, Thomas Wieland concludes that the decline in the infection rate in Germany was triggered by small voluntary behaviour changes and the cancellation of mass gatherings. The German lockdown measures came after the decline in infections was well under way.

lockdown

But then, why follow science if one can, by invoking fear, subdue the nation, trampling their rights and restructuring the economy in accordance with ideological and racial preferences?

Covid is the excuse: The rationale is gaining arbitrary powers

The French for ‘rationale’ (‘Quelle est la raison d’être’) simply conveys the essence so much stronger: the source or the fountain of the purpose.

Whilst the government still clings to a projected death toll of 48,000 by year-end (recall that 350,000 brandied about in March?) one of the reasons could possibly be that any lower number of casualties will be in future paraded as the successful outcome of the lockdown strategy. At the beginning of lockdown, the models were already pointed out as flawed. PANDA continues pointing out that the government is overestimating deaths.

And there is sufficient well researched evidence disclaiming lockdown strategies as the saviour.

The ‘Quelle est la raison d’être for lockdowns is already assessed and the following quote (from another paper by Bjornskov) explains it clearly:

“It seems safe to conclude that this time is not different. As under previous natural disasters, democratic and autocratic governments alike have behaved like power-maximizers during the corona pandemic. We find that the discretionary power they gain during emergencies is the main determinant of whether they declared a state of emergency, while the severity of the epidemic is irrelevant.

“We also observe that the same governments are likely to misuse these powers against journalists and the media. The danger, as under previous disasters, is that some of the measures now implemented are likely to outlast the current pandemic and weaken the rule of law and democracies for many years to come.

“In fact, in many countries the ultimate victim of the corona virus may be the separation of powers and freedom of expression.”  https://ideas.repec.org/p/zbw/ilewps/36.html

  • Johannes Wessels is a director at EOSA (Enterprise Observatory of South Africa). EOSA has developed an Enterprise Friendly Index for South Africa. Based on a range of data sets one can assess which areas are therefore business oriented: and the metropolitan areas aren’t necessarily the leading areas…https://eosa.org.za/our-methodology/enterprise-friendly-index/
(Visited 3,783 times, 1 visits today)