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Our progress on Covid-19 in perspective

Gareth Morgan believes if current trends continue, the Government could "open the jail" in another week

Each week we’re locked up imparts irreparable harm to the economy, people’s livelihoods and not least our health. We all know why it’s been necessary and the Government is to be congratulated for moving to lockdown early. However in a week’s time the rate of increase in cases should be down to 5 percent a day. Currently it is 10 percent.

At that rate, given continued application of distancing and sanitary measures it should be safe for New Zealanders to get back to work. Achieving a 0-1 percent per day rate of increase (where China and South Korea currently sit) would take a second week. A controlled release would be preferable.

Based on the daily data from worldometers.info, what follows is a synopsis of where New Zealand sits in its campaign against Covid19. The inferences made can only be as good as the data input and as we know not all countries have the same  methodology for recording their case numbers – which makes comparisons limited.

With that in mind the four graphs of the data suggest the following:

Severity

In terms of fatalities as a proportion of cases, at 0.1 New Zealand sits well below the global average of 5.4. Italy is worst at 12.3 while the US at 2.8 is also below the global average. China is just below, while Sweden is just above.

Even if New Zealand’s death toll rose to 10 from our current number of cases, we would still be the 5th least severe of the 18 countries in this selection.

Incidence of Covid-19

The next question is how widespread is the virus in New Zealand compared to elsewhere?

At 216 cases per million people we sit above the global average of 154, Australia is similarly placed – as is South Korea, another country arguably well through this virus crisis now. Indeed, of this selection of countries, incidence in all but three exceeds the global average – China, which arguably is through the worst, is lower while Russia and South Africa are both in the early stages are as well. Highest incidence is on the European continent, while the US is above Iran’s 664 per million now and the UK sits just below.

How fast is Covid-19 spreading?

We know the virus spreads rapidly once it takes hold and then supposedly slows down once countries get on top of it using the techniques of distancing, isolation and improved sanitation. But is this a uniform pattern or are the results on this quite variable?

At the moment (to April 5th) the global average of growth in cases per day is 8 percent, so it takes just nine days for the number of cases to double worldwide. And at 154 cases per million population, most of the countries in this sample exceed that extent of infection. So if the pattern of abatement is similar across countries, one would expect most of these countries to be slowing now – for the growth in cases to be falling below the 9 percent per day world average.

As the graph illustrates, this is not the case. It is in the most infected countries – Italy, Spain and Switzerland – but France, the US, UK and Canada are still steaming ahead at 13-14 percent growth in cases per day – even though they’re already above the global average on incidence.

At an incidence level just above the global average, at 10 percent per day New Zealand’s case count is rising just above the global average, while similarly infected Australia has slowed its rate of increase to just 4 percent per day.

The best performers on this measure as you would expect are China and South Korea – both well along the Covid-19 pathway, with low incidence rates and negligible growth in numbers nowadays.

The Dynamic

All the data above is based on reported cases and deaths per country on April 5th. But the trend in each country’s incidence also can tells us something about what to expect from here. The following graph illustrates for a few of those in the sample.

Just nine days ago the reported global incidence was rising at 15 percent per day. It is now down to 8 percent per day. New Zealand, which has an incidence pretty close to the global average, has dropped its per day growth rate of cases more sharply to around 10 percent per day for the last five days. Australia is more impressive still with five days of sub-9 percent growth.

Spare a thought for the UK and US however, both with higher incidence and struggling to get their daily rates of increase below 15 percent - a rate where the number of cases doubles every five days, rather than the eight days we’re down to so far.

The future

The question is: when will it be “safe” to let people out and get the economy going again?

The longer we take, the more income, jobs and futures of people will be ruined. We know the economic recovery will be slow – significant swathes of our economy will be laid to waste while border controls remain, for example. As well, people have been scared – those with little reserves ie; not much to go on, will have realised just how vulnerable they are to such events – or to a rekindling of this particular virus. They will be conservative, tend to hoard their wealth for the next rainy day, knowing they’ve dodged a bullet. Remember not all people with few reserves are poor – many of the supposedly well-off run on the smell of an oily rag, gear up their lifestyles so in effect they live hand-to-mouth. Such is the pressure of keeping up with the Joneses.

The Government can expect to see a much-chastened household sector, frequented by those who have either lost their jobs, their income or both. And these numbers soar every single week the Government keeps us locked up. No amount of “free debt” will prove to be an antidote for the extreme ‘liquidity preference’ many households will have - not to mention still being sufficiently petrified of another outbreak to curb their desire for cappuccinos in cuddly cafes.

So when will the Government open the jail? Looking at it from a statistical perspective, my guess is that the rate of daily increase will need to get down to 3-4 percent.

This is not a competition to come out of this with the world’s lowest death rate, the inescapable reality is a point will come where the call is made that the cure is indeed worse than the disease, and we will switch to a new set of restrictions.

The reason I say that is because letting businesses go bust, laying off thousands of people permanently and facing a “post-Covid normal” wherein spending by households and firms will be severely restricted for who knows how long – will impart its own human tragedy of illness (mental and physical) and even death.

The last graph gives some suggestion of how long it will take from here to get to a tolerable reduction of restrictions. The graph looks at the daily rate of increase for those countries that have now got it down to 5 percent or less. You can see that Germany and Italy for example were running at rates well in excess of our current 10 percent per day, just nine days ago; Iran was running at 10 percent per day just a week ago, Italy 10 days ago, while South Korea and China have been travelling at 0-1 percent per day for the whole 12 days. As recently as one month ago South Korea was increasing 10 percent per day, and for China that was two months ago.

So my guess is New Zealand can get to 5 percent per day in another week, and to 1 percent per day in as soon as two weeks.

At either of those points the Government needs to ease off and allow the population to breathe life back into our livelihoods.

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