SA needs to ease the corona lockdown as decisively as it imposed it

Policymakers must not give way to emotional diatribes built on pseudoscience, from both inside and outside of government.  Seldom have so many people with no prior love of mathematics – who battle to spell “statistics” – presented so much conclusive evidence to confirm their world views.

The South African government moved decisively on COVID-19, for which it received much praise and initial support from the public.  Whether that turns out to be the right policy or a disaster has to do with what happens next.  To harvest the highest return from the cost of locking SA down, we need clear objectives, which requires some agreement on how this plays out.

The highly accredited Professor Salim Abdool Karim (chair of the government’s advisory committee on COVID-19) says the following, “From their assessment, the original peak of the pandemic was going to be around July, the lockdown moved that to August and the extended lockdown has moved it to around September. This gives us more time to get prepared and get us to a level where we are ready to take on the full burden of the pandemic”.

But Minister of Corporate Governance, Nkosazana Dlamini-Zuma had the following to say, “If the numbers go up, we go back to level 5. So, it’s all in our hands South Africans, whether we stick to what we do, so we must make the choice ourselves.”

These differences are incompatible

Minister Dlamini-Zuma’s views, we believe, are misguided and potentially catastrophic.  They imply extended lockdown until “this thing” goes away.  Dr Karim’s views are realistic and suggest actionable policies that can be optimised to meet multiple goals.

Edge case arguments seldom yield sensible plans.  The world entered this crisis with little data and responded as events unfolded.  What is the real infection rate, how deadly is it, who is most vulnerable, how long until we develop medical countermeasures, what is the impact of mitigating action, what are the trade-offs? But the main question is, what is our objective?

Even hindsight is not perfect science.  The consequences of actions you take are clear, while those you “could’ve/should’ve” taken are speculation.  What is happening in other territories provide clues, but Italy is not China, the US is not Sweden and SA is none of them.  We need to progress in real time using knowledge, data, logic, and evolving evidence.

Binary choices are seldom good

Minimising mortality or containing infection without weighing economic costs is not sound.  “Cost” extends to the full social impact of an economic collapse.  The depth, breadth and duration of a global depression could have a trans-generational impact while destabilising and radicalising political systems with unknown consequences.

Any policy that ignores containing the spread of corona is equally unsound.  These postulate a binary trade-off between saving lives and saving the economy.  This is an academic exercise that is at best speculative.  A chaotic assault in the healthcare system, social panic and misinformation, reactive policies from government and an unprepared social support infrastructure would be like playing Russian Roulette – SA is not Sweden.  The US and the UK show us the unnecessary costs of tardy and incoherent “policy”.

Navigating this crisis involves a sequence of measures.  Contact tracing can work when infection numbers are small in an area.  An initial hard lockdown flattens the curve and critically buys the time and the space for planning.  We expand our health care response and put in place social and business support infrastructure.  Citizens and businesses acquire knowledge and information and gear themselves for a sustainable return to work.  Then you need to ease restrictions, smoothly and effectively, and manage the spread of the virus through the population as best as you can.

What do we know?

Focussing on our current knowledge:

• There is a decreasing daily marginal return on hard mitigation measures as we become more prepared.
• There is an exponentially increasing daily marginal economic and social cost.
• At the current rate of spread, the best-case timing for a vaccine comfortably exceeds most projected infection peaks. It is inconceivable that the economy can wait for a vaccine.
• Actual cases are materially higher than the confirmed cases, implying that infection rates are higher and mortality rates significantly lower than reported (under-reported deaths in SA are probably not a big factor at this stage).
• There is little confirmation yet of people who have had the disease developing serious symptoms again in the short-term, or that people who have fully recovered remaining infectious.
• In the absence of a vaccine or drug, spread can only be contained through herd immunity or continued mitigation measures.
• It is not clear that the best intensive care will materially impact the final death toll. According to the Washington Post, 88% of patients in New York’s largest health system who required ventilators perished.
• Every day that we avoid unnecessary infections and push out the peak, we increase the option value on lives from increased information.

What do we want to achieve?

Any clear-headed trade-off that involves balancing human lives may seem callous.  But it is not if you have the right goals and correctly account for human cost.  It is also how terrible wars have been won at the least human cost.  Based on the “what we know”, our objectives can be simplified to:

• Minimise the short, medium, and long-term economic and social impact
• Avoid actions that risk a return to lockdown
• Minimise unnecessary death and suffering
• Maximise the option value of new information
• Achieve a sustainable corona defence strategy in the absence of a vaccine

An optimisation problem

If we assume that, (a) an effective vaccine is still some time away AND (b) we CANNOT AFFORD to sustain the cost of harsh mitigation, AND, (c) easing mitigation levels WILL increase the infection rate, then pure logic (and common sense) dictates you have a simple optimisation problem to solve.

• Reach herd immunity as quickly as possible
• Without unnecessarily overwhelming the health care system
• At the lowest economic cost
• Without materially affecting end-game mortality

This theoretical solution means:

• Expand the sustainable capacity of our health care system within budgetary constraints
• Maximise the level of economic activity that utilises the sustainable capacity of the health care system.

Policy implications

This means getting people back to work and re-opening businesses while taking all practical measures to mitigate infection rates.  In this framework, persistent empty hospital beds are a cost; it means that economic activity is unnecessarily suppressed, and we are moving towards herd immunity too slowly.  It suggests we are stretching out economic costs without reducing the ultimate number of deaths.

Maximising economic output within these constraints means treating each person hospitalised because of economic activity as a cost.  The capacity of the health care system is our budget and the aim is to maximise economic activity within this budget.  Hence, it is in the economic interests of society to minimise unnecessary infections as we get back to work.

Government also needs to be cognisant of the choices and trade-offs they make in keeping the economy on life support.  The Economist warns of the “90% economy”, one where “Zombie” firms never really recover or fail at ruinous cost to the fiscus.  Better to let firms find their own feet as quickly as possible with targeted support.

Reasonable precautions are logical

Doing away with all mitigation measures is not sensible – not even Sweden is suggesting that.  The banshee fringe of “end the lock down” campaigns need to be resisted.  What does make sense is a material and rapid easing of restrictions to kick-start the economy.  It also means that some social distancing measures should remain in place, but government needs to be sensitive to the public mood.  Restrictions that make no sense must be the first to go.

This framework encourages us to adopt precautions that improve the economic cost-benefit trade-off.  Infections from a failure to take inexpensive measures in the work place undermine our economic cause.  Some precautions are not worth taking because costs outweigh the benefits.  Other precautions may seem very draconian (such as travel restrictions) but may nevertheless be worth it in terms of the size of benefits received.

Conclusion: we need to move quickly and carefully

There is an optimal level of preparedness for combating COVID-19, beyond which the costs of further delays exceed the benefits.  Like a rugby game, you can only train for so long before you must take to the field, but knowing you have a full 80 minutes to play.

Our focus needs to be on mitigating risks in the workplace and our public spaces, not keeping people away from work.  Individuals and businesses need to fundamentally change their behaviour because avoidable risks are too expensive and counterproductive.  Protocols and discipline are important, and the Wild West is not the answer.  Interaction that carries little economic benefit should be kept limited for now, as does keeping our most vulnerable isolated and protected.

We must celebrate and take advantage of our lockdown successes but not forget the price at which it was achieved.