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U.S. Is Nowhere Close to Reopening the Economy, Experts Say – The New York Times

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WASHINGTON — How long can we keep this up?

It is still very early in the U.S. effort to snuff a lethal pandemic by shutting down much of the economy. But there is a growing question — from workers, the White House, corporate boardrooms and small businesses on the brink — that hangs over what is essentially a war effort against a virus that has already killed more than 9,000 Americans.

There is no good answer yet, in part because we don’t even have the data needed to formulate one.

Essentially, economists say, there won’t be a fully functioning economy again until people are confident that they can go about their business without a high risk of catching the virus.

“Our ability to reopen the economy ultimately depends on our ability to better understand the spread and risk of the virus,” said Betsey Stevenson, a University of Michigan economist who worked on the White House Council of Economic Advisers under President Barack Obama. “It’s also quite likely that we will need to figure out how to reopen the economy with the virus remaining a threat.”

Public health experts are beginning to make predictions about when coronavirus infection rates will peak. Economists are calculating when the cost of continuing to shutter restaurants, shopping malls and other businesses — a move that has already pushed some 10 million Americans into unemployment, with millions more on the way — will outweigh the savings from further efforts to slow the virus once the infection curve has flattened out.

Government officials are setting competing targets. President Trump has pushed his expected date of reopening the economy to the end of April. “We have to get back to work,” he said in a briefing on Saturday. “We have to open our country again. We don’t want to be doing this for months and months and months. We’re going to open our country again. This country wasn’t meant for this.”

Some governors have set much more conservative targets, like Ralph Northam of Virginia, who canceled the remainder of the school year and imposed a shelter-at-home order through June 10. Other states, like Florida, only recently agreed to shut activity down but have set more aggressive targets — April 30, in the case of the Sunshine State — to restart it.

Those targets are at best mildly informed guesses based on models that contain variables — including how many people have the virus and how effective suppression measures will prove to be. The models cannot yet give us anything close to a precise answer on the big question looming over Americans’ lives and livelihoods.

To determine when to restart activity, said R. Glenn Hubbard, a former top economist under President George W. Bush, “we need more information.”

Interviews with more than a dozen economists, many of whom are veterans of past presidential administrations, reveal broad consensus on the building blocks the economy needs — but does not yet have — to begin the slow process of restoring normalcy in the American economy.

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That includes widespread agreement that the United States desperately needs more testing for the virus in order to give policymakers the first key piece of evidence they need to determine how fast the virus is spreading and when it might be safe for people to return to work.

Without more testing, “there’s no way that you could set a time limit on when you could open up the economy,” said Simon Mongey, a University of Chicago economist who is among the authors of a new study that found that rapid deployment of randomized testing for the virus could reduce its health and economic damage.

“It’s going to have to depend on being able to identify people that have the coronavirus, understanding how readily those people can transmit the disease to others and then kind of appropriately isolating people that are contagious,” Mr. Mongey said.

Policymakers will also need better data on how strained hospitals and entire regional health care systems are likely to be if the infection rate flares up and spreads. Ideally, they would sufficiently control the rate to establish so-called contact tracing in order to track — and avoid — the spread of the virus across the country.

Once such levels of detection are established, it is possible that certain workers could begin returning to the job — for example, in areas where the chance of infection is low. Some experts have talked about quickly bringing back workers who contract the virus but recover with little effect. Testing is the best way to identify such workers, who may have had the virus with few or no symptoms and possibly not realized they were ever infected.

While they wait for the infection rate to fall, policymakers will need to provide more support to workers who have lost jobs or hours and to businesses teetering on the brink of failure. That could mean trillions more in small business loans, unemployment benefits and direct payments to individuals, and it could force the government to get creative in deploying money to avoid bottlenecks.

Lisa D. Cook, a Michigan State University economist who worked in the Obama White House, said lawmakers should consider funneling $1,500 a month to individuals through mobile apps like Zelle in order to reach more people, particularly low-income and nonwhite Americans who disproportionately lack traditional bank accounts. Mobile payments, Ms. Cook said, would also make it “easier and faster to make onward payments to family members and friends in need.”

The government’s efforts could prove crucial to maintaining public support for what amounts to a prolonged economic drought. Adam Ozimek, the chief economist at Upwork, said additional money for small business will be crucial throughout the full extent of the crisis — both to prevent a crush of business failures and to keep owners and customers from flouting the national effort to reduce infections.

“I don’t think you can force hundreds of thousands of small business owners to voluntarily shut down and let failure happen to them,” Mr. Ozimek said. “They won’t do it, the public won’t support it, and frankly I don’t think local authorities would stop them.”

Policymakers will also need to give better support and protection to Americans who are putting their own health at risk to keep the essential parts of the economy running, like doctors, nurses, grocery store clerks and package delivery drivers.

Heather Boushey, the president of the Washington Center for Equitable Growth, a think tank focused on inequality, said those workers needed to have paid sick leave, adequate health coverage, access to coronavirus tests and affordable care for their children while they worked in order to stay healthy and to protect consumers from further spread of the virus.

“That is the economy at this point, those workers,” Ms. Boushey said. “And their health and safety is imperative to my safety.”

Policymakers will need patience: Restarting activity too quickly could risk a second spike in infections that could deal more damage than the first because it would shake people’s faith in their ability to engage in even limited amounts of shopping, dining or other commerce.

“It’s important not to lift too early,” said Emil Verner, a Massachusetts Institute of Technology economist who is a co-author of a new study that found that cities that took more aggressive steps to curb the 1918 flu pandemic in the United States emerged with stronger economies than cities that did less. “Because if we lift too early, the pandemic can take hold again. And that itself is very bad for the economy.”

Finally, policymakers will need to level with Americans — and themselves — and concede the possibility that the shutdown and its effects could drag well beyond the end of the month.

Aggressive suppression measures could lead to a gradual resumption of activity that begins in some places as soon as May, several experts said. But business as usual might not come back until a vaccine is developed, which could take more than a year.

“We should certainly be prepared for a meaningful level of deliberate suppression of economic activity for the rest of the year,” said Jason Furman of Harvard University, who was a top economist under Mr. Obama.

The Congressional Budget Office wrote on Thursday that it expected at least a quarter of the current suppression measures to last through year’s end, and that the unemployment rate could still be 9 percent at the end of 2021. Lawmakers need to be ready to keep filling the void, with support to businesses and workers, said Karl Smith, the vice president for federal policy at the Tax Foundation in Washington.

“The possibility of an unofficial quarantine for weeks or months after the official one is lifted is real,” Mr. Smith said. “After that, my guess is that the economy is in major trouble.”

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RBA warns of big hit to the economy from pandemic – MarketWatch

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SYDNEY–The Reserve Bank of Australia left interest rates unchanged Tuesday and affirmed its current targeting of bond yields while warning the economy will be hit hard by the corona pandemic in the second quarter.

The RBA’s official cash rate was left at a record low 0.25%, the bank said. The three-year bond yield target was also kept at 0.25%.

“There is considerable uncertainty about the near-term outlook for the Australian economy…a very large economic contraction is expected to be recorded in the June quarter and the unemployment rate is expected to increase to its highest level for many years,” RBA Governor Philip Lowe said in a statement.

Interest rates are set to remain low for a long period, he added.

“The board is committed to doing what it can to support jobs, incomes and businesses as Australia deals with the coronavirus,” Mr. Lowe said.

“The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2%-3% target band,” he added.

The RBA deployed alternative policy measures in March for the first time as the coronavirus pandemic forced social distancing on the population, shut firms and closed borders to international traffic.

When compared with other major economies, Australia has managed to limit the number of deaths from the coronavirus, but it has been hard hit nonetheless with tourism and education exports flattened while consumer spending has weakened.

Federal and state governments have responded to the pandemic with massive fiscal stimulus but despite the outlays, Australia is set to sink into its first recession since the early 1990s, economists have warned.

Data earlier Tuesday showed job advertisements fell by 10.3% in March, the biggest fall since the global financial crisis.

Still, consumer confidence was up with the ANZ attributing the rise to government measures to support incomes and keep workers on payrolls.

Write to James Glynn at james.glynn@wsj.com

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Quebec hatches plans to bolster economy as Legault eyes postpandemic world – The Globe and Mail

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Quebec Premier Francois Legault responds to reporters during a news conference on the COVID-19 pandemic, Thursday, April 2, 2020 at the legislature in Quebec City. Mr. Legault’s government on Monday announced a $100-million program that companies can tap to pay workers being trained as well as those training them as they prepare for a return of economic activity.

Jacques Boissinot/The Canadian Press

Quebec is hatching plans to bolster the resiliency of its economy as it eyes a postpandemic world where countries are expected to become more protectionist and the province will need to be more self-sufficient.

Premier François Legault’s government on Monday announced a $100-million program that companies can tap to pay workers being trained as well as those training them as they prepare for a return of economic activity. Companies are eligible to apply for the program until September 30.

“This is the ideal time to do training,” Mr. Legault told reporters in Quebec City, adding many business need to be ready for a significant reorganization of work. “Things will change a lot over coming months.”

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Labour Minister Jean Boulet said companies could develop employee skills while being subsidized for their wages, which would “increase their competitiveness. We want companies to be able to prepare to relaunch and avoid any job losses as much as possible.”

As much of the rest of Canada has focused on immediate responses, Quebec has in recent days been talking more about its future once the health crisis subsides. Mr. Legault’s government says it has begun working on plans to increase the province’s self-sufficiency in health care and food, to make sure it has enough locally made medical equipment, medication and other supplies needed to weather a future crisis.

More broadly, Quebec has begun a detailed analysis of its trade balance in an attempt to prepare for a new economic reality once the peak of the global coronavirus pandemic has passed. The Premier is even evoking the possibility of using the province’s plentiful hydro power to warm indoor greenhouses in the winter and grow fruit and vegetables all year round instead of importing them.

“We want to be able to produce more locally,” Mr. Legault said Friday. “We’ll need to think about the entire food chain to ensure that if there were another crisis that we’d be autonomous.”

Quebec’s determination to cement its defences and boost its future economic prospects has already been likened by some commentators to a similar nationalism effort in the 1960s that ushered in the Quiet Revolution.

Not since that time has former Premier Jean Lesage’s campaign slogan “Maître chez nous” (Masters in our own house) become as pertinent as a societal objective, Quebecor media columnist Michel Girard said.

The government is also thinking about the demand side of the equation, trying to stimulate Quebeckers’ appetite for locally-made products in order to cut their reliance on goods made outside its borders.

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On Sunday Quebec announced a new non-profit project called Le Panier Bleu (blue basket), which is at the moment a website-accessed inventory of thousands of Quebec companies that provide locally-made products and services. The project is being led by several retail-sector veterans, including former Lowe’s Canada chief executive officer Sylvain Prud’homme.

With three million visits in less than 24 since the website went live and 1,170 businesses listed, the initiative is proving the propensity of Quebeckers to support their own, said Charles de Brabant, executive director of McGill University’s Bensadoun School of Retail Management. He compared the effort to the online marketplace created by China’s Alibaba Group, which has proven to be a major employment generator in that country since its launch in 1999.

For weeks, Quebec has led the country in the number of confirmed COVID-19 cases, with 533 people hospitalized and 121 deaths as of Monday. It has also put in place among the continent’s strictest social-distancing measures, extending a shutdown of non-essential businesses to May 4.

About 80 Quebec companies have expressed an ability and willingness to manufacture protective equipment and at least one will be tapped to make masks permanently, said Quebec Economy Minister Pierre Fitzgibbon. The government is also working with pharmaceutical companies in the provinces to make sure Quebeckers’ medication needs can also be met by local producers, he said.

Quebec currently has a $20-billion annual trade deficit, meaning it imports more goods than it exports. The Premier says the gap will probably grow, accelerated by current events, meaning the province has to realign its economy internally.

Quebec’s chief exports by dollar value are aircraft and aircraft engines, aluminum and iron ores. Among its biggest imports are crude oil, light trucks and sport utility vehicles. The United States is by far its biggest trading partner.

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“You can imagine that some of our exports will face a bit more protectionism in coming years,” Mr. Legault said. “We’re going to need to figure out how we can help our local entrepreneurs make products that we are currently importing in order to keep our trade balance as even as we can.”

Quebec estimates it has spent $18-billion to fight the pandemic, which includes financial aide for business and the cost of buying medical equipment. The number represents between 4 and 5 per cent of its gross domestic product.

Sign up for the Coronavirus Update newsletter to read the day’s essential coronavirus news, features and explainers written by Globe reporters.

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New technology is transforming Vietnam's economy – CNN

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Since then, its economy has been transformed — largely thanks to a package of economic and political reforms, designed to engineer growth, that was launched by the government in 1986.
More than 45 million people were lifted out of poverty between 2002 and 2018 as the country developed industries that span textiles, agriculture, furniture, plastics, paper, tourism and telecommunications.
Vietnam is now undergoing another transformation — thanks to technology.
Smartphones are changing the way of life in Vietnam.
New infrastructure has given Vietnamese citizens easy access to the internet — and propelled their country across the digital divide.
A 2018 report by Google and Singaporean investment company Temasek described Vietnam’s digital economy — which is growing at more than 40% a year — as “a dragon being unleashed.”
It’s not all plain sailing. Vietnam’s government has been widely criticized for its surveillance of citizens and restrictions on freedom of speech. And like the rest of the world, it’s impossible to predict how the coronavirus will impact the country’s economy.
What’s clear, though, is that technology is reshaping the way people in Vietnam do business, manufacture goods, entertain themselves, shop, organize their finances and communicate. CNN spoke to three business leaders — to take the pulse of a changing nation.

The startup pioneer

Nguyen Thuy Lien, head of corporate development for Appota
Nguyen Thuy Lien.Nguyen Thuy Lien.
One of the country’s most dynamic startups, Appota has hitched its wagon to the growth of Vietnam’s smartphone market.
Appota, which launched in 2011, has around 40 million users on its “digital ecosystem,” says head of corporate development, Nguyen Thuy Lien. The company publishes games licensed from developers in China (martial arts themes are especially popular) and has developed an e-wallet for gaming purchases. Its apps include a wifi password-sharing facility, a book reader, news, movies, comics and other forms of entertainment.
“Vietnamese of all ages love their smartphones” says Nguyen. “Everything Appota does is through mobile.”
A 2019 report by Google and the Mobile Marketing Association identified Vietnam as a “mobile-first market” with “over 51 million smartphones, representing over 80% of the population aged 15-years and older.”
Network coverage is extensive. “People get access to 3G and 4G even in rural and mountainous areas,” says Nguyen, adding that handsets and tariffs are competitively-priced.
Vietnamese beauty brand Skinlosophy fuses tradition with technologyVietnamese beauty brand Skinlosophy fuses tradition with technology
The company also operates a business-to-business advertising arm and is looking to expand its mobile payments operations.
Nguyen is responsible for securing funding for Appota — which has raised $17 million to date. She says that attracting investment is easier now than it was in the past, with the majority of funds coming in from overseas, especially Japan and South Korea. Vietnamese investors, however, tend to lack confidence in tech, she says. “They are more conservative and prefer putting money into real estate.”
Appota’s next foray will be into physical products — which function via smartphones. The company recently launched a “smart lock,” operated by an app, that secures everything from front doors to suitcases. Nguyen says her company’s vision is to fully integrate smartphones into the workplace and the home. “It’s the next step in digital transformation.”

The sustainability trailblazer

Hans Barkell-Schmitz, assistant to the chairman, Royal Spirit Group
Hans Barkell-Schmitz at the DBW factory. Hans Barkell-Schmitz at the DBW factory.
A manufacturing powerhouse, Vietnam is the world’s third largest exporter of textiles and garments (after China and Bangladesh).
But the global textile industry is highly polluting, churning through more than 90 billion cubic meters of water a year, and contributing around 10 percent of global carbon emissions.
Hong Kong-based garment manufacturer Royal Spirit Group opened the Deutsche BekleidungsWerke factory (its name reflects the company’s German heritage) on the outskirts of Ho Chi Minh City, in 2016. “We decided to position ourselves at the forefront of sustainability,” says Hans Barkell-Schmitz, who conceived and led the project.
DBW from the air. The roof is fitted out with solar panels and a garden, and is painted with light-reflecting paint. DBW from the air. The roof is fitted out with solar panels and a garden, and is painted with light-reflecting paint.
Known as DBW, the $20-million facility is designed to sustain both the environment and the 1,000-strong workforce. The chairs were designed locally to fit the average Vietnamese body size, says Barkell-Schmitz. Throughout the factory, LED lights glow at the optimal level to reduce eye strain and headaches, and complex calculations were used to set the ventilation and air conditioning systems at the right temperatures. “Our ethos is — if we have a happy workforce, we’ll have more efficiency and it’s a win-win” says Barkell-Schmitz.
Cutting energy consumption was key. The factory runs on renewable energy sources, including hydroelectric power, biofuel and solar, says Barkell-Schmitz. His team chose equipment with “great care,” he says, comparing the energy use of different options. They selected German sewing machines that automatically switch off when not stitching, and machines that make and apply pockets with minimal waste and electricity consumption.
DBW's ironing and sewing machines use much less electricity than conventional machines. DBW's ironing and sewing machines use much less electricity than conventional machines.
The factory is equipped with “highly technical dyeing machines that use less dye and water,” says Barkell-Schmitz. The building itself acts as a giant funnel, channeling rainwater into tanks — which is then filtered and used to wash textiles. The factory also incorporates a “gray water system” in which handwashing and dishwashing water is filtered and re-used to nourish a rooftop garden that produces fruit and vegetables for the factory cafeteria.
According to Barkell-Schmitz, the single biggest challenge was the paperwork. By planning and documenting all aspects of the project according to stringent requirements, DBW earned top level awards from both LEED, the US green building certification system, and Lotus, its counterpart in Vietnam.
Barkell-Schmitz hopes that DBW will inspire other manufacturers. “It’s a win for the planet, for the companies which invest, and for the consumers.”

The e-commerce entrepreneur

Tran Ngoc Thai Son, founder and CEO, Tiki
Tran Ngoc Thai Son.Tran Ngoc Thai Son.
In 2010 Tran Ngoc Thai Son launched his company, Tiki, in his bedroom at his parents’ house in Ho Chi Minh City. An online bookseller specializing in English-language titles, he used the family garage as a warehouse. “It was a tiny store, but my dream was very big,” says Tran.
Ten years later, Tiki is the one of the top e-commerce platforms in Vietnam, says Tran. It sells a vast array of consumer goods with an average of 17 million customer visits, and around 4.5 million items shipped, per month.
Tiki’s expansion has tracked explosive growth in Vietnam’s e-commerce market, which was worth $6.2 billion in 2019.
Why the world is waking up to Vietnamese coffee Why the world is waking up to Vietnamese coffee
This boom reflects, in part, the youthfulness and increasing affluence of Vietnam’s population, says Tran. The Vietnamese embrace new technology and feel optimistic about the future, “which drives them to go online and buy stuff,” he says.
Additionally, smartphones and internet access are extremely affordable, says Tran, while fierce competition between international conglomerates and local startups “drives innovation and consumer benefits.”
Tiki’s top-sellers are consumer electronics, although sales in lifestyle products and fashion have grown tremendously over the last year, he says.
Tiki's top sellers are consumer electronics. Tiki's top sellers are consumer electronics.
Efficient logistics are key to the company’s success. Tiki has 33 warehouses in 13 cities and prides itself on a two-hour delivery option, says Tran. However, although Vietnam is urbanizing, almost two-thirds of its population still live in rural areas. Delivery to remote areas typically takes longer and costs more.
Tran says that over half of purchases are still paid for with cash on delivery. He is keen to see digital payments become more widely adopted. “Sellers get paid earlier, and it speeds up the whole process,” he says. With use of e-wallets expanding at 28 percent a year in Vietnam, the number of digital transactions will only grow.

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