Research Note: Lessons from Abroad: South Korea’s Covid-19 Containment Model

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Leonard Hong with assistance from Joel Hernandez

South Korea’s Covid-19 Containment ModelDownload

As the world struggles to contain Covid-19, many countries are at different stages of containment and mitigation since registering their first 100 cases. Some, like South Korea, are more than a month further ahead compared with New Zealand and could offer a good example of what might be expected as New Zealand transitions out of Alert Level 4 lockdown.

As of April 20, South Korea is 91 days into its Covid-19 response compared to New Zealand’s 52 days. New Zealand appears to be on the same trajectory as South Korea measured by total cumulative cases and cumulative cases per capita. New Zealand has 29 cases per 100,000 people while South Korea has 20 cases per 100,000, showing that both are flattening their epidemiological curves. 

Early in the pandemic, Covid-19 cases in South Korea sharply increased, peaking at 909 new cases after 41 days. But as of April 20, South Korea only has 2385 active cases and 8042 recoveries from a total of 10,674 confirmed cases. It also has a low case fatality rate (CFR) of 0.2% or 236 deaths. Italy, Spain, the US, and New Zealand have CFRs of 13.2%, 10.3%, 5.3% and 0.8%, respectively. 

Although the South Korean government failed to stop the initial transmission of the virus from overseas, it speedily dealt with the first Shincheonji’s clusters in Daegu while maintaining an open economy, effective border controls, high-level diagnostic testing, strict enforcement of Covid-19 rules, efficient contact tracing and government transparency. It even avoided a national lockdown by giving local governments the authority to shut only parts of their districts.

The effectiveness of these policies was boosted by public solidarity, civil compliance, the prominent use of face masks and the widely understood lessons of previous virus outbreaks.

This report outlines seven key examples of South Korea’s pandemic approach and shares the lessons for New Zealand.

The unexpected winner of Covid-19 – China

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9 April, 2020

Two centuries ago, Napoleon Bonaparte called China a sleeping lion and advised to “let her sleep, for when she wakes, she will shake the world.” Bonaparte’s prophecies are relevant again today. The lion is now awake and she is becoming increasingly assertive.

Early in the Covid-19 crisis, there was a view that China would be weakened by it. Some even pondered the downfall of President Xi Jinping and the Chinese Communist Party. With the Hong Kong revolts, the death of Wuhan’s whistle-blower Dr Lee Wenliang, the looming global recession and economic confidence deteriorating within China, those predictions were not surprising.

But the coronavirus may just be a hiccup and Mr Xi’s government appears to have regained its domestic legitimacy. Instead of falling victim to the virus, the party could be deemed the victor in the international system. The losers seem to be the United States and the wider liberal international order. The balance of power has shifted in favour of China.

China covered up the origins of the virus to the World Health Organisation. As a result, Western countries such as the US, Spain, Italy and Germany have far more cases and deaths than China.

China is using the crisis to extend its geopolitical reach. In the last few weeks, it has sent additional masks and medical supplies to help the Italians and French. As President Xi pledges more support to Europe, he is using it to further legitimise his ambitious $1.4 trillion Belt and Road Initiative.

The virus has become useful for Beijing to add an element of soft power, which is necessary to become the so-called benevolent global force. By repairing the serious reputational damage caused to it by the pandemic, China is framing itself as a responsible power.

The United States led the international system since the end of the Second World War, but under President Donald Trump, its diplomatic efforts have changed tack and are now more nationally focused. China, by contrast, appears increasingly determined to fill that global leadership void.

Great power politics is still a ruthless business in the international system, and Covid-19 has resulted in a new phase of security competition between the US and China. Covid-19 unsettled the balance of power in a way few would have predicted just a few months ago.

Research Note: Lessons from Abroad: Singapore’s Covid-19 Containment Model

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Leonard Hong

Singapore’s Covid-19 Containment ModelDownload

Singapore has set a high standard for dealing with Covid-19 and despite its decision to enter a lockdown this week, New Zealand can learn a lot from the country, according to a new report Lessons from abroad: Singapore’s Covid-19 containment model from the New Zealand Initiative.

Although Singapore has enacted a “circuit breaker” lockdown to defend against some new sources of coronavirus, it could make this choice due to its earlier efforts to identify, control and contain the pandemic threatening its territory.

New Zealand Initiative research assistant Leonard Hong said since Singapore reached its 100th confirmed Covid-19 case in March, it now has a similar number of cases per capita to New Zealand.

Neither country is yet through the worst of the pandemic, but speedy government action helps explain both countries’ relatively low case rate.

“Singapore’s main point of difference was its early and aggressive border security measures. Its first line of defence restricted travel from countries profoundly affected by the coronavirus, such as China, despite the World Health Organisation not recommending travel restrictions at the time.”

“It has also implemented one of the world’s most restrictive quarantine measures, including digital surveillance tracking systems to monitor those possibly infected with the virus,” Hong said.

While many countries encourage citizens to self-isolate to slow the spread of the virus, they find it tough to enforce those commands, particularly when the rules have not yet become laws.

However, Singapore authorities have already issued hefty fines for some individuals not complying with quarantine rules, and even repealed the work permits and visas of others.

“The Singapore government has taken a ‘no-nonsense’ approach when enforcing its rules by using excellent technological surveillance and harsh penalties,” Hong said.

He added that Singapore is rigorously conducting and boosting its testing regime to be one of the highest per capita rates in the world, although its rate is still slightly below New Zealand’s.

The city-state’s tight border and screening protocols also give the government greater visibility into which people encounter possible Covid-19 cases. It has created 20 dedicated Contract Tracing teams, under the jurisdiction of the police, to locate and monitor at risk individuals.

The teams are using a new, publicly available mobile software app to help warn citizens when they might be in proximity to infected people. The free source code for the app will be opened up for other countries to adopt.

“New Zealand’s government decided to enact a lockdown 26 days after its first case on February 28. By comparison, Singapore took 75 days since its first case on January 23 to enact its ‘circuit breaker’ phase showing that some of its earlier measures for containment were effective,” Hong said.

“Singapore’s early containment policies were a model for the world that the right policy decisions could make significant differences to the problems of Covid-19. New Zealand should keep an eye on what it does next.”

Research Note: Effective Treatment: Public Policy subscription for a pandemic

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Dr. Eric Crampton with assistance from Leonard Hong

Research Note: Effective TreatmentDownload

Unless effective treatment for the novel coronavirus Covid-19 emerges quickly, the world faces not only misery but economic depression. New Zealand will be immune to neither. The normal economic uncertainties of a downturn will be compounded by the uncertainties of a pandemic.

The New Zealand Government’s policy needs to directly boost capabilities in the health sector while providing the kind of appropriate economic support necessary when we’re all taking a lengthy staycation and some industries are put on ice.

Uncertainty about the duration of this crisis makes deciding on the most suitable policy difficult.

So, a combination of policies is warranted. Our latest report, Effective Treatment, explains our approach.

The first priority must be with health.

Increasing the capacity of the health sector to deal with peaks in numbers of Covid cases is important to reduce mortality and morbidity rates. But nobody quite seems to know just where the binding constraints in the health sector are. While credible newspaper articles warn about substantial shortages in equipment and incredible pressure on staff, official statements have been far more sanguine.

If there really will be shortages of critical equipment in four to six weeks, potential suppliers should know that today. Quietly shoulder-tapping likely suppliers may partially solve the problem but won’t provide the necessary scale of response. Suppliers can come from unlikely places. For instance, Italian hospitals are reportedly trialling ventilators reconfigured from scuba diving equipment. Simply announcing a willingness to purchase equipment – and the prices the Government is willing to pay – would allow potential suppliers to identify themselves. Serious companies aren’t likely to re-tool without the certainty of a contract. But they do need to know the demand exists and that they can get essential service status to do the job.

Rapid identification of equipment and skills necessary to boost capability in the medical system, combined with a wide call for assistance, would enable people and businesses to find ways to help. If the health system is not already doing so, it should be offloading less-significant tasks to helpers with limited training, to ease the burden on key medical staff. For instance, thousands of air cabin crew have been trained in first aid and will have plenty of time on their hands. With some rapid training, they may be able to ease some of the burden.

Additionally, the Government has asked retired health workers and health workers furloughed by the current lockdown to assist in Covid-response. It should also consider those foreign-trained medical professionals already in the country who have not yet been able to secure New Zealand medical registration.

Part of the cure for a pandemic is a sharp reduction in economic activities in areas not related either to pandemic response or critical areas like food supply. That’s why support for workers and firms is important. But the Government’s chosen wage subsidy scheme is not working well. Even if it can be extended to larger employers, it provides too little support to keep companies from laying off staff en masse.

The Initiative urges the Government to consider a version of Germany’s Short-Time Work support policy. That scheme allows firms to shift workers to a fraction of their normal hours along with an income top-up from the Government. That way, instead of laying off 80% of staff, a company could keep staff on 20% of their normal hours with little reduction in worker earnings.

This kind of scheme is better than either relying on benefits or starting up the sometimes-promoted universal basic income (UBI). A speedy reboot of the economy when this is over matters. That is much harder to do when companies must rebuild hard-earned experience and skills from scratch. The Short-Time Work support policy maintains both workers’ incomes and their links to employers. It targets support to those workers whose hours are cut, rather than spreading support broadly to those far less affected. Simply put, it works better.

Some tax provisions can also be eased. Individuals and firms should be allowed to combine the 2020/21 tax years and temporarily suspend their PAYE collection and Kiwisaver contributions. This would immediately provide more cash in hand everyone. Companies staring down provisional tax assessments based on last year’s earnings could instead defer everything to next year.

Simultaneously, the Government could help reduce business’ fixed costs that otherwise might have compelled them to shut down. It could also cover Council rates bills for firms in financial distress, averting a major hit to the local government purse as well. And access to credit can be improved, especially over the longer term as wage support to employers may need to ease.

Finally, a modified version of the New Zealand Student Loan programme should be made available to non-students to help bridge any remaining income gaps. It has the advantage of having already set provisions for income-contingent repayment when the crisis passes.

But financial support is not the only way the Government can and should help.

Regulations that were no real barrier to getting things done in normal times can be insurmountable in a pandemic. For example, some airline pilots require time in simulators to maintain certification, but the necessary simulators are in Australia. In normal times, this just doesn’t much matter – pilots can roster onto an Australia route when and as necessary. This doesn’t work now. But the Government can’t be expected to identify every barrier proactively. It needs to rely on business to highlight the obstacles as they come up using lines of rapid communication with regulators who can suspend or modify them during this crisis.

And this is no time for policy or regulatory changes which are not related to the pandemic. The Reserve Bank and Commerce Commission have already postponed theirs. But Parliament’s Select Committees are still asking for submissions on non-urgent legislation. Doesn’t the Health Select Committee have better things to do than consider the regulatory framework for vaping? Some legislation may be urgent enough to require submissions during the Level 4 alert, but everything else should be quarantined.

Obviously, the Government should borrow the funds it needs to do all this. But this will require maintaining a disciplined approach to any spending lines unrelated to the pandemic. Entrenching new ongoing commitments would complicate a return to prudent debt levels after the crisis and make it harder to borrow the funds necessary for responding to the pandemic.

Hopefully the four weeks of Level 4 lockdown gives the Government enough time both to knock back the pandemic and adjust policy to help us through the coming economic turmoil. We need to adopt more effective treatment.

What I won’t miss in quarantine

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The gloomy headlines say New Zealand just flagged its 28th case of coronavirus. Great.

But as Twitter inevitably explodes again about nation-wide self-isolation policies, I’m starting to think the outdoors isn’t all it’s cracked up to be.

Most of us will miss seeing friends over a weekly Starbucks coffee, walks on the beach, being in the sun and – my personal favourite – golfing. But as the outside temperature drops and the normal flu season kicks in (yes, other types of flu still exist), to be honest, it’s hard to think of anything good about sweaty gyms and crowded coffee shops.

Besides, winter means more rain. I hate the rain. The upside of working from home is that it’s cosy, dry and it’s always the perfect time for hot chocolate. What’s not to like?

Walking to work is also literally a pain in the backside. I certainly won’t miss travelling to and from the city every day, up and down hilly streets with a sweaty back.

And if I’m not in the office, there’s no need to look ‘civilised’ in a suit. I can wear pyjamas from 9 to 5 and it’s not as if the cat will complain to HR. Besides, the best thing about casual clothing is the lack of ironing, giving me more time for Netflix in the evening.

But my advice is to keep a collared shirt and a blazer within arm’s reach if you can’t rule out surprise Skype calls. Just make sure to lock the door: the last thing you want is a toddler bursting in during a video chat with the CEO.

The home office is also way cheaper. No more unnecessary $4 morning coffees or expensive $15 Pad Thai for lunch. And the commute from couch to spare bedroom will cost pennies (depending on the size of the house, of course). Bonus: the lower emissions of trudging across the hallway will also be far cleaner for the environment. Again, depending on what was eaten for dinner last night…

I do expect a lack of vitamin D to boost my immune system. But pulling my laptop closer to a north-facing window will probably solve that problem. Also, we humans are social animals and since no one will be walking the streets then not even a window will help fill that need. That could be an issue.

But it’s only for a few weeks. The outside world will still be there when I get out, right?

Singapore’s Successful containment of Covid-19

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Plenty of first-world countries have been hit with Coronavirus cases and failed to stamp it out effectively. However, Singapore has once again shined as an example of clever public policy.

As of March 17, Singapore has a very low total number of cases with (243) because its government took what World Health Organisation Director-General Tedros Adhanom described as an “all-of-government approach.”

How did it achieve this?

In the initial phase, Singapore focused mainly on border controls to prevent the virus entering. The city-state was one of the first to impose travel restrictions with China, then Iran, South Korea, Italy and now France, Germany and Spain as those places became infected.

It also imposed a mandatory 14-day ‘Stay-Home Notice’ and self-isolation for its citizens, permanent residents and long-term pass holders arriving from countries affected by the pathogen.

In the second phase, it prioritised hard containment by creating strict measures for tracing the virus’ spread, isolating individuals and treating the ill to keeping deaths low as possible. Its vigilant digital ‘Contract Tracing’ system also helped to locate the infected and map out the virus as it spread.

Singapore operates a centralised, top-down government system which makes it easy to compel people. In fact, the Home Affairs Minister deported three Chinese nationals – who were also permanent residents – for not following quarantine protocols and lying to officials.

Third, Singapore pursued economic stimulus packages to support the economy. In February, Deputy Prime Minister Heng Swee Keat announced an $S6.4 billion government programme, of which $S5.6b will assist businesses and consumers, while $S4b is tagged to support businesses with their wage costs.

Singapore achieved all this without enacting a lockdown and remains open to the world.

New Zealand has many similarities to the city-state. Both countries rely on free trade, boast similar population sizes and are advanced market economies. However, while New Zealand’s more liberal approach makes it harder to exert central control, there is plenty to learn from Singapore’s containment policies.

Today, Finance Minister Grant Robertson announced a $12.1b stimulus package to support New Zealanders and businesses. It follows Singapore’s example by including $5.1b in wage subsidies for affected businesses in all sectors and regions.

But there is more to do. Singapore and other South East Asian countries may provide inspiration for us.

Preserving our values amid growing turbulence

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Australia and New Zealand face a geopolitical predicament as a consequence of China’s rise. How do we preserve our Western liberal values in the face of growing concern with our largest trading partner and it’s turbulent relationship with our key ally, the United States?

The 20th century saw the US rise with both economic and strategic dominance, but the 21st century is predicted to become the period of resurgence for China. Henry Kissinger has suggested that we are entering a multipolar world — international power dynamics shifting from West to East. 

Ideological tensions with China were recently highlighted by Australia’s Liberal MP Andrew Hastie and New Zealand’s Canterbury University Professor Anne-Marie Brady. 

After Hastie wrote a critical opinion piece for the Sydney Morning Herald expressing his concern for China’s human rights violations, comparing Xi’s regime to Hitler’s Nazi Germany, he was banned from entering China. 

Meanwhile, in her policy paper, Magic Weapons, Brady wrote of the Chinese Communist Party’s soft power coercion across Western nations, pointing to China influencing our democracies through foreign donations and the establishment of Confucius Institutes. Following this, she’s received threats of violence, her car and office vandalised.  

As Samuel Huntington predicted in his 1993 book ‘The Clash of Civilisations and the Remaking of World Order’, Western liberal democracies like Australia and New Zealand will steadily witness greater civilisational tensions with China’s Confucian authoritarianism. 

And Graham Allison’s Thucydides’s Trap posits with a grim scenario of great power conflict: The rising China threatening the incumbent global power, the United States — Australia and New Zealand could fall victim in an intensive security competition between the United States and China. 

In his forward for Allison’sbook, Destined for War, Andrew Hastie posed the question: “Can the political leadership of both countries overcome the historical structural stresses that have brought other great powers to war?”

The goal for both Australia and New Zealand is to protect our liberal democratic principles but to also avoid becoming the modern ‘Melos’ of the Peloponnesian War — the nation that fell mercilessly to Athens in 416 BC — preventing the ‘Thucydides’s Trap’. 

John Mearsheimer and Hugh White’s debate in Canberra is the beginning of an ongoing discussion concerning our strategy regarding the rise of China. Australians and New Zealanders must wake up to the task of solving this difficult challenge. 

It is imperative for both Australia and New Zealand to find a practical foreign policy solution to the ever-increasing turbulence between the United States and China. 

Leonard Hong is a recent graduate at The University of Auckland and a former research intern at the Centre for Independent Studies.

Unintended Consequences of Globalisation

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In the past 30 years we’ve witnessed the end of the Soviet Union, the third wave of democratisation and extensive levels of globalisation. Mass flows of capital and mobility have become the norm. Francis Fukuyama predicted the ‘End of History’ with liberal democracies spreading around the planet and market capitalism enriching everyone.

To some extent this became a reality. Steven Pinker’s Enlightenment Now shows empirical studies of great benefits brought to the world by globalisation. We live in a richer, healthier and more peaceful era than ever before.

However, drastic changes to the global economy and mass migration resulted in a backlash against cosmopolitanism. 9/11, the global financial crisis of 2008, the Euro crisis of 2011, the failures of the Iraq War and the refugee crisis of 2015 cumulatively left Western liberal democracies politically precarious. The rise in domestic inequality, offshoring of low skilled work, and declining trust in political and financial institutions led to worsening social cohesion.

These unexpected circumstances of events led us to a world of increasing populist sentiment evidenced by Brexit and President Trump’s election — the revival of nationalism.

John Mearsheimer stated that “nationalism is the most powerful ideology on the planet”. Humans are tribal and we are social animals to the core. This explains the zealous dedication people exert towards national causes which seek to advance identity-based policies.

Contemporary populism is a symptom of the problem and not necessarily the solution. We have to defend the liberal world order, but future policy-makers should consider dealing with the side effects of globalisation.

To sustain an interconnected and a peaceful modern world, we must understand the causes of populism and continue to build towards a society where we embrace liberal democratic principles.

Only fiscal discipline will protect us

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Former Australian Treasurer Wayne Swan’s valedictory speech hailed the legacy of his stimulus package (but not the subsequent — and growing — government debt).

As everybody knows, debt and recession are often linked — and many speculate that another recession may be around the corner.

It’s been 11 years since the 2008 Global Financial Crisis. In the aftermath, many Western governments, including Australia, pushed for fiscal stimuli to expand aggregate demand and boost the economy.

Since then, we have had a higher debt-to-GDP ratio as a result of continuous government spending and deficits by both Labor and the Coalition. On top of this, Australia’s economic performance in the last decade has been ‘lacklustre’ at best, on an average GDP per capita growth of 1.25%.

Although fiscal balance and economic performance aren’t closely related, low government debt provides countries with an optimal position and a better chance of having low interest rates.

Despite the growing debt, in contrast to other countries like Greece, Australia has a moderate debt to GDP ratio of 41.9%, and the Coalition is expected to record a first budget surplus after eleven consecutive budget deficits.

However, it is unlikely that the Australian government will continue to maintain fiscal discipline. The IMF’s Christine Lagarde warns of a global downturn, and it is possible that either side would push for a fiscal stimulus again if such a scenario happens. This leads to increased government deficit and debt.

This would put upward pressure on interest rates and the exchange rate, and crowd out private investment, both of which lead to lower wages and slower economic growth. Australians know that eventually, public debt needs to be paid back by either tax increases or cuts to essential public utilities.

For the Australian economy to prepare for an economic downturn and long term economic stability, we must have fiscal discipline that will make the economy more resilient against shocks.

Take responsibility for your life

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Prominent intellectual and speaker Jordan Peterson’s current Australian tour could well be the first time many millennials have heard a message of personal responsibility.

For most of their lives, millennials have been coddled by the narrative of having rights without responsibility. For many millennials, individual accountability was obsolete in western culture, until people like Peterson revived the discussion in a new way for a new generation.

As an unintended consequence of the cultural change in the 1960s, there has been an overemphasis on group identity and intersectionality in our culture.

The most important aspect about an individual has become their group identity — characteristics such as race, gender, cultural background, and sexuality, take primacy over the individual.

This has led to people being classified as belonging to either an oppressor or a victim group. Being a white person meant that you had to forever reimburse the sins of western imperialism and slavery. Because you share the characteristics of those who did wrong in the past, you must pay in the present.

Meanwhile, being a minority victim group meant that you can ‘never be guilty’ or be responsible for any suffering in your own life. If you belong to a victim group, your problems were caused by the oppressors.

Peterson’s message directly counters this narrative. For the first time, many young people are being told they have control over their life. You are not responsible for the sins of your ancestors. Nor are you a victim because of the trials of your ancestors.

Take control of what you can. Start small, slowly build competence, and your life will drastically improve. This is how you build a meaningful life.

As Peterson says in his book, 12 Rules for Life, “We must each adopt as much responsibility as possible for individual life, society and the world”.   

We must bring personal responsibility back onto the table.

Leonard Hong is a student at the University of Auckland and a research intern at The Centre for Independent Studies.