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Walking the Coronavirus Containment Tightrope: How Countries Balance Saving Lives and the Economy – The Wall Street Journal

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As the world relaxes its lockdowns against the coronavirus pandemic, the early results range from fragile success to worsening crisis.

Much of East Asia and Europe has suppressed the pandemic’s first wave and is fighting to keep infections down to a manageable level. But contagion is still spreading strongly in the U.S., Latin America and India, among other places, leaving countries with a choice between the economic pain of renewed restrictions on daily life or accepting the human toll of mass infections.

The divergent experiences of reopening show some of the main lessons learned so far from fighting the coronavirus, say epidemiologists and other scientists studying the pandemic. Strict lockdowns slammed the brakes on exponentially growing virus outbreaks. Countries that locked down quickly suffered fewer deaths than countries that acted late. Timing is also proving crucial in lifting lockdowns: Infections are accelerating in countries that reopened before they had suppressed the first wave.

Above all, some countries used the weeks of lockdown better than others to develop less drastic, more sophisticated ways to fight the virus.

Grave diggers in Manaus, Brazil.



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Tommaso Protti for The Wall Street Journal

“Lockdowns work, in the sense that extreme social-distancing measures stop transmission. But they’re a short-term tactic. What you’re doing is buying yourself time,” says John Lessler, epidemiologist at Johns Hopkins Bloomberg School of Public Health. “When you reopen your economy, you have to have a strategy in place.”

Most public-health experts agree over what the strategy should look like: boost the capacity to test, trace and isolate virus carriers, and find a sweet spot for social-distancing rules in daily life that keeps infection risks low but also let the economy breathe. Nearly all governments talk in such terms, but some countries have made considerable progress, while others, including the U.S., are struggling to coordinate their efforts.

“A lot of what you see in the shape of infection curves is how well countries used the time of their lockdowns,” says Solomon Hsiang, director of the Global Policy Laboratory at the University of California, Berkeley. European countries that suppressed the first wave and have so far reopened with only limited upticks in infections “used the time to set up systems for testing and contact-tracing that can bear the weight after lockdowns,” he says. “In the U.S., we didn’t do that. We wasted the time.”

Italy, the first country outside Asia to be hit badly by the virus, reacted late and had the world’s deadliest outbreak until the U.S. overtook its death toll. But since Italy reopened in May, infections have continued to decline, to around 200 a day currently. Many of those are asymptomatic cases discovered via large-scale blood testing—detection capabilities that Italy didn’t have before.

Italy remains nervous about the danger of the virus bouncing back if people relax too much or too many cases evade its new test-and-trace systems. Several European countries have grappled with clusters of fresh infections since reopening, including Germany, Spain and Poland. The numbers remain much lower than in March and April, however.

Keeping new infections low is proving hard work everywhere. Even East Asian countries widely lauded for their robust virus-fighting capabilities, such as South Korea and Singapore, have grappled with new clusters of cases. Israel, which suppressed the first wave with a rapid lockdown, shows how quickly progress can evaporate: Suddenly resurgent infections have prompted the government to partially reverse the reopening of the economy.

Asian countries such as South Korea are widely lauded for their robust virus-fighting capabilities.



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Jean Chung for The Wall Street Journal

The slow return of international travel poses another challenge to countries that have kept domestic contagion low. Greece locked down quickly after discovering its first coronavirus cases, a reaction typical of countries that feared they lacked the health-care resources to cope with a large outbreak. Now, Greece is detecting infections among tourists, and trying to balance the health risks with the needs of its tourism-dependent economy.

Only painful options remain for countries with surging infections that have already been through economically costly lockdowns. Shutting down the economy a second time could test societies’ cohesion and financial reserves to breaking point. Developing countries that lack the social-benefit systems of West European nations already struggled to support their idled workers during the first lockdown.

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From poorer countries such as India to the rich U.S., economic pressure on households was one of the main factors that led authorities to lift restrictions despite still-high contagion.

“The best strategy for poorer countries is to make sure that the population are taking precautions, wearing masks and doing social distancing, in order to gain time to ramp up surveillance, testing and contact-tracing capabilities,” says Swapnil Mishra, a public-health researcher at Imperial College, London.

Social-distancing circles in a park in Milan. Since Italy reopened in May, infections have continued to decline.



Photo:

Francesca Volpi for The Wall Street Journal

Mr. Mishra co-wrote one of the first peer-reviewed studies of lockdowns’ impact on contagion, using data on coronavirus deaths in 11 European countries to infer how business closures, stay-at-home orders and other measures affected the spread of the virus. The study found lockdowns sharply slowed infection rates and saved around 3.1 million lives in Europe compared with unfettered exponential outbreaks in the continent.

Mr. Hsiang’s team at Berkeley published another major peer-reviewed study on lockdowns, using econometric methods to estimate the impact on infection rates of specific social-distancing policies in the U.S. and selected European and Asian countries. The study found that infections were doubling roughly every two days, an explosive pace that was curbed by draconian policy efforts and the cooperation of ordinary people.

The problem now is how to maintain such coordinated action, says Mr. Hsiang. “It’s an endurance challenge against an invisible adversary.”

A third recent paper, a survey of data from 84 countries by researchers at the MIT Sloan School of Management, argues that societies’ motivation to maintain social distancing is the key to the next phase—and that the worst of the pandemic still lies ahead next winter. The second wave, warns the MIT study, could be concentrated in a few large countries including India and the U.S.

“The outlook for the epidemic remains grim, with most nations settling into a steady state of cases and deaths that, while below their peaks, are troublingly large,” the MIT researchers warn.

Related Video

As the coronavirus continues to spread around the globe, companies and academic labs are racing to develop a vaccine that would help society get back to normal. But there could also be costs to moving too quickly. WSJ’s Daniela Hernandez explains. Photo illustration: Laura Kammermann

Write to Marcus Walker at marcus.walker@wsj.com

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B.C.’s debt and deficit forecast to rise as the provincial election nears

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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.

Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.

Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”

The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.

Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.

“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”

Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.

Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.

Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.

B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.

The election is expected to be called on Sept. 21, with the vote set for Oct. 19.

“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”

Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.

Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.

The premier said that now is not the time to reduce supports and services for people.

Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.

Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.

This report by The Canadian Press was first published Sept. 10, 2024.

Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.

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Mark Carney mum on carbon-tax advice, future in politics at Liberal retreat

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NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.

But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.

He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.

Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.

Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.

Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.

This report by The Canadian Press was first published Sept. 10, 2024.

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Nova Scotia bill would kick-start offshore wind industry without approval from Ottawa

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HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.

Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.

The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.

Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”

Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.

Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.

This report by The Canadian Press was first published Sept. 10, 2024.

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