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English Version,全球疫情应对和经济复苏综合评估报告,执行摘要

发布时间:2020-10-18 10:02编辑:小狐阅读: 311次 手机阅读

Comprehensive Assessment and Ranking Report

on the Response to the Covid-19 Pandemic

and Economic Recovery of 108 Economies

全球疫情应对和经济复苏综合评估报告

Editor: Yang Yanqing

策划:杨燕青

Advisor: Li Wenlong

顾问:李文龙

Data compiling/processing and writing: Lin Chunjie, Ma Shaozhi, LiuXin, Mark Kruger, Shao Yurong, Yan Fangjia, Zhang Shiming, Zhang Guoli.

数据和写作:林纯洁、马绍之、刘昕、柯马克、闫方甲、张世明、张国力。

Contents

1. Methodological Framework

2. Selection of Sample Countries

3. Ranking Results

5. Economic Bailout

6. Economic Reboot and Recovery

7. International Cooperation

Executive Summary

The Covid-19 pandemic and the resulting economic recession have made 2020 a year to remember for the entire world, comparable to the flu pandemic in 1918 and the Great Depression from 1929 to 1933. The situation is likely to continue next year and even for years to come.

The novel coronavirus has posed unprecedented challenges to the global economy. A set of policy mix, including social distancing, quarantine, tracking and contact tracing, etc., have been phased in, although in various degree of strictness in economies that has been hit by Covid-19 to curb the spread of the virus. Policy makers also have implemented massive scale of fiscal and monetary stimulus to bail out the economy as a result of lockdown. Major economies have reopened since May before getting the virus completely under control, which has resulted in a rebound in new cases, a return to record highs and second wave make the global fight against Covid-19 even more complicated.

Covid-19 continues to spread around the world at an even more speedy rate today. Some countries are experiencing a second wave and some have never reached a turning point. Some 38,426,373, people worldwide had been infected as of 10.00 a.m. on Oct. 15(Beijing time) which translates into 51 infections for every 10,000 people.

Global economy suffered the greatest economic recession on record in the second quarter of 2020. According to the latest WEO report of IMF, world output will suffer 4.4% loss in 2020, with advanced economies and emerging market/developing economies shrinking 5.8% and 3.3% respectively. Moreover, Covid-19 has claimed 1,091,245 lives worldwide as of 10.00 a.m. on Oct. 15(Beijing time) which equals to 14 deaths for every 100,000 people. Secondary disasters from the pandemic continue to unfold and Covid-19 is bringing about fundamental changes to the whole world, what the post Covid-19 world will look like depends on the actions and reactions that policy-makers and people have chosen today.

Yicai Research Institute have compiled an assessment and ranking system jointly with Yicai Global and the Pan-Asia Research Institute of Digital Economy, using 23 detailed indicators to evaluate the performance of 108 countries in handling the Covid-19 pandemic and their economic recoveries. It is hoped that this report will shed some light on “best practices” and provide references for policy makers of the whole world in combating the Covid-19 pandemic, fostering economic recovery as well as adapting to the medium- and long-term structural changes.

Methodological Framework

We assessed countries handling of the pandemic and their economic recovery in the Level I Index which looks at the response to Covid-19, economic bailout measures and the degree of international cooperation.

“Response to Covid-19” focuses on countries absolute performance in their response to thepandemic, such as confirmed cases, deaths and growth rate of new cases. Weexamined the situation in each country eight weeks after it reported 100 confirmedCovid-19 cases and deaths to give all the assessed countries the same startingpoint, as the pandemic arrived at different times in different nations. Wefound that, based on the experience in major economies, the virus can bebrought under control within six months if effective measures are quickly putinto place.

Different countrieshave a different set of healthcare and hygiene conditions and their populationdensities are not the same which means that they respond to the pandemicdifferently. For this reason, we have produced a range of indexes to assesstheir handling of Covid-19, such as giving countries scores based on the relativedisparity between two groups of indexes. For example, if the percentage ofconfirmed cases among the total population of a country with less developedmedical care is low, this means the country made greater efforts in response tothe virus than other countries. We also included policy effectiveness and the varietyof new technologies used to combat the virus in our assessment, such as how quicklythey implemented social distancing and quarantine measures, how responsive thepublic was to these measures and the variety of digital technologies used.

Economic bailout looks at the pandemic’s absolute impact on a country’s economy,including international organizations’ estimate of changes in its economicgrowth before and after the outbreak, the manufacturing Purchasing ManagersIndex and employment confidence index based on Big Data. We also looked atcountries’ economic bailout and recovery plans including the scale of theirbailouts and their communications with the market. The latter is vital totackle a crisis.

“International cooperation” focuses on how countries helpedother countries to fight the pandemic, such as by providing financialassistance or imposing restrictions on exporting medical supplies. It must benoted that financial assistance only refers to governments’ donation to theWorld Health Organization’s Covid-19Solidarity Response Fund because of data availability.

The above three Level I Indexes plus the Level II, Level III and Level IV Indexes constitute our assessment system. The weight of each index is decided based on the absolute results of studying pandemic control measures and respecting the data. The detailed indexes and their weights are listed in the following table. The pandemic and public economic data are as of Aug. 31.

Table 1: Indexes of the Comprehensive Assessment of the Worlds Response to Covid-19, Economic Recovery and Weights

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图1)

Notes: *Scored based on subjective opinions according to MIT surveydata

** Scored based on subjective opinions according to a variety ofdigital technologies used in pandemic control

*** The relative level indicates governments’ response to the pandemicthrough the difference between the sub-indexes and the absolute level’sindexes. For example, a high proportion of confirmed cases among the totalpopulation of a country with good medical care and low population density meansthe country’s government did not do enough to curb the virus’ spread.

Sources: YicaiResearch Institute, Pan-Asia Research Institute of Digital Economy

Selection of Sample Countries

Taking intoaccount that the pandemic started in different countries at different times, wechose those countries with over 100 confirmed cases and more than 10 deaths asof June 30 to ensure data availability and to assess as many countries aspossible.

Ranking Results

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图2)

Note: The highera country scores, the better its performance amid the pandemic

Sources: YicaiResearch Institute, Pan-Asia Research Institute of Digital Economy

Using thesecriteria, we selected 108 countries covering the majority of the world’sregions and population to assess their response to the virus and their economicrecovery. Figure1 shows the performance of major countries and regions, andTable 2 specifies the rankings and scores of each country. Not surprisingly,Asia-Pacific countries performed particularly well. China topped the list.South Korea ranked fourth despite the recent new outbreaks of the epidemic. SriLanka, Myanmar, Thailand, Vietnam and Cambodia as well as Australia and New Zealandall ranked among the top 10. The best performers in Europe were Denmark andGermany in 21st and 23rd place respectively. Austria, Greece and Switzerlandalso performed well. Unsurprisingly, the US and Brazil, both countrieswith leaders who initially downplayed the problem and with a lack of publicsupport for the government’s policies, came 98th and 89th respectively. Sweden,one of the very few countries to opt for the controversial tactic of herdimmunity, ranked 90th.

Table 2: Comprehensive Assessment ofMajor Countries Response to Covid-19 and Their Economic Recovery

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图3)

Source: Yicai Research Institute

The Yicai Research Institute used the SEIRepidemiological model, as well as our self-developed “social network-basedvirus transmission model “to predict the state of the pandemic in differentnations. The SEIR model, classing people as either Susceptible, Exposed,Infectious or Removed, which assumes that asymptomatic cases arealways present and bases its calculations on earlier disease trajectories, showed that countries with strictepidemic prion policies, such as China, South Korea and Italy, all had thepandemic under control and logged R0 (Basic Reproduction Number )lower than 1 in July.The socialnetwork-based model, which assumes that the regional increase of Covid-19 casesconstitutes a new outbreak of the pandemic, showed that those countries that had the outbreakunder control in its early stages and then saw new clusters emerge that resultsto R0 bigger than 1 in July, indicating that consistent epidemic prion andcontrol measures are essential.

Table 3: R0 inMajor Nations

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图4)

Source: YicaiResearch Institute

Public healthinfrastructure, population density and population mobility vary from country tocountry which means each country faces a different set of challenges in itsfight against the pandemic. We used the aircraft passenger database compiled bythe International Air Transport Association to make the evaluations resultsmore rational and to take population mobility as a gauge. This databaseincludes all air travel statistics (both between and within countries)throughout 2018. We used it as a baseline to compare with the collective numberof confirmed Covid-19 cases in various nations that the World HealthOrganization made public (as of Aug. 31).

We calculatedthe proportion of global air passenger volume to the overall number ofconfirmed Covid-19 cases in each nation. The correlation coefficient of thesetwo figures was 0.66, which means the proportion of a country’s global airpassenger volume accounts for about two-thirds of its total confirmed cases.For instance, Italy’s proportion of global air passenger volume reached 0.67percent, and the number of its confirmed Covid-19 cases was 1.09 percent as ofAug. 31.

Figure 2: Proportion of ConfirmedCovid-19 Cases and Global Air Passenger Volumes

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图5)

Notes: The horizontal axis refers to the proportion of global airpassenger volume and the vertical axis is the proportion of confirmed Covid-19cases.

Source: YicaiResearch Institute, World Bank

Nations’ effortsin the fight against Covid-19 can be compared once the baseline for measuringthe novel coronavirus infection is determined. The method we adopted was to‘calculate Covid-19 gaps,’ which is the proportion of global air passengervolume in 2018 minus the corresponding proportion of confirmed Covid-19 cases.A ‘positive’ gap means the country performed better than the benchmark level inthe prion and control of Covid-19. Brazil had the largest negative gap atminus 13.14 percent, indicating that the disease’s infection rate exceeded theprojection we could make using air passenger data. China boasted the biggestpositive gap at 14.46 percent, showing that we did achieve some successregarding the prion of the virus’ spread, and the ranking correspondedwith the evaluation’s results.

Strict andall-encompassing social distancing and quarantine measures can quicklyeliminate the virus transmission routes. The possibility of adopting suchmeasures worldwide, however, is very small. Under pressure, some nationsrestarted their economy in May before the Covid-19 pandemic was completelyunder control. The aim should be to pr repeated, large-scale outbreaks ofthe disease while enabling a stable economic recovery. This should pr theoccurrence of secondary disasters including bank runs for medical resources.Effective testing, tracking and tracing are also needed so as to reboot theeconomy in an orderly way.

Table 4:Economic Performance of Major Countries

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图6)

Table 5: Top 30 Nations with Highest Economic Bailout Scores

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图7)

Note: Statistics as of Aug. 31.

Source: YicaiResearch Institute

Myanmar scoredthe most points in terms of economic bailouts, while China, Australia, Korea,Germany, Japan and Canada were all in the top 15 places. Asian countries ingeneral performed well.

The purchasingmanagers indexes of major economies already began to expand in September,according to the latest economic data. China and Korea, which were able to getthe pandemic under control at an early stage, had a smaller economic decline inthe first half. The economic performance of major nations shows that curbingthe spread of Covid-19 is the key to economic recovery.

Figure 3: Manufacturing PMI for Major Countries

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图8)

Source: Wind

The measuresthat mankind has taken to deal with Covid-19 are identical to those used duringprevious epidemics. Controlling population mobility and pring crossinfection remain the most effective means to curb the further spread of thedisease.

Lockdowns, Social Distancing and Quarantine

Figure 4: Rigorousness Index of Lockdowns

March 1 (first picture)

March 15 (middle picture)

April 1 (last picture)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图9)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图10)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图11)

Note: The darker the colors, the stricter the lockdowns

Source: FT

Most countrieshave implemented Suppression measures in the hope of pring the virusspread by restricting activities and encouraging social distancing andquarantine. However, the specific measures and the timing and degree of theirimplementation have varied.

China was thefirst country to conduct curbing measures, according to the rigorousness indexof lockdowns compiled by the UKs Financial Times. Other Asian nations,including South Korea and Vietnam, also carried out large-scale prionmeasures. European, North American and African nations were rather late inbringing in strict suppression measures and some of their policies were notcarried out in full. For instance, only some states in the US conductedlockdowns and the US had looser restrictions on social distancing andquarantine on April 1, compared with those applied in major developed nationsin Western Europe which were also encountering a Covid-19 outbreak.

Many countries succumbedto economic pressure and kickstarted their economy when the pandemic was notyet under control and the number of new cases was still peaking. New Covid-19cases have been on the rise since the global economic restart in early May. Thenumber of new cases per week reached round 1.8 million people as of the end ofAugust, more than triple that of the 550,000 per week at the beginning of May.

The results ofour evaluation show that Covid-19 infection rates (or the proportion ofconfirmed cases among the whole population) of the countries that gained higherscores in terms of pandemic prion work are generally very low, includingChina and South Korea, despite the rapid spread of Covid-19 across the world.

Asia, as awhole, achieved a noticeably good performance in the fight against Covid-19.Eight of the top 10-ranked countries were on the continent, with China andSouth Korea in 1st and 8th place respectively. Another major economy that didwell in terms of pandemic prion was Australia, which ranked 25th.

The lowinfection rate has to some degree flattened the curve of the pandemic andlowered the peak number of cases in order to enable healthcare systems totrade time for space. This allows hospitals and clinics to get ready toreceive critically-ill patients to avoid bank runs on healthcare resourcesand pr the tragedy of death should a great number of patients not be ableto receive treatment in time. Such bank runs happened during the early stagesof the Covid-19 outbreak in Italy. A huge number of medical staffers wereinfected due to inadequate medical supplies, which intensified the lack ofmedical resources, ng the death rate in Italy rise far above the globalaverage. The lives that were lost are an irretrievable loss to human society.This is also the absolute cost that the worlds nations have to pay amid theirfight against Covid-19. Reducing the peak, or flattening the sombrero, caneffectively lower the death rate.

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图12)

Note: Data as ofAug. 31.

Source: YicaiResearch Institute

Figure 5: Strong Negative Correlationbetween Epidemic Prion Scores and Proportion of Confirmed Cases amongTotal Population

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图13)

Note: Thehorizontal axis is the epidemic prion score, while the vertical axis is theproportion of confirmed cases among the total population

Sources: YicaiResearch Institute, IMF

Policy Timingand Public Cooperation

Our assessmentshows that the timely introduction of epidemic prion policies bygovernments, together with a good degree of cooperation from the public, is keyto quickly stopping the spread of the disease.

Once more than100 cases have been confirmed, it becomes a critical point in the epidemicstransmission. The sooner the government imposes social distancing measures, theeasier it is to control the outbreak. However, if citizens are unwilling tocooperate or even distrust the government, then even the swift introduction ofsocial distancing measures cannot achieve good results. To take Brazil as anexample, it implemented social distancing measures as early as March 12, at thesame time as some major European countries. But Brazil had a much higherproportion of confirmed cases than these European countries by the end ofAugust. The president refused to wear a mask outside and epidemic controlmeasures were significantly impacted by disagreements between the central andlocal governments. If a country performs poorly in these two aspects, with thelate announcement of social distancing measures and the limited implementationof epidemic control measures (such as people refusing to wear masks) thespread of the disease can be even worse than in countries with “herd immunity”such as Sweden. This is the situation that the US finds itself in.

Figure 6: Timing of Implementation ofSocial Distancing Measures and Proportion of Confirmed Cases among TotalPopulation

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图14)

Note: Thehorizontal axis is the time it took to implement social distancing measures(number of days after/before confirmed cases topped 100) while the verticalaxis is the proportion of confirmed cases among the total population

Sources: YicaiResearch Institute, IMF

Figure 7: Degree of Public Cooperationand Proportion of Confirmed Cases among Total Population

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图15)

Note: Thehorizontal axis is the degree of public cooperation, and the vertical axis isthe proportion of confirmed cases among the total population

Sources: YicaiResearch Institute, IMF

Figure 8: Is There Enough PublicCooperation to Deal with the Epidemic? (Survey by Massachusetts Institute ofTechnology)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图16)

DigitalTechnologies

More governmentsare beginning to actively explore the use of digital technology in the fightagainst the epidemic. In the early stages, some countries used digitaltechnology to fight the epidemic and achieved positive results. For example,China uses a so-called “QR health code” and South Korea uses a mobile app toremind quarantined people not to leave designated areas. If operators detectsomeone crossing the line, a text message will be sent to inform the person andhe/she will be reported to the relevant department. It can be said that precisesocial distancing based on digital technology is an important part of bothChinas and the South Korean fight against the epidemic.

Personal location data can be highly sensitive. People worry about theabuse of personal privacy data. Tracking apps“ frequent use of personal privacydata blurs the line between privacy protection and ensuring public healthsecurity. The European Commission released the ”Guidance on Apps Supporting theFight Against the Covid-19 Pandemic in Relation to Data Protection“ in April toensure that citizens” personal data is adequately protected when they use theapps, so as to increase public trust in innovative applications and ensuremaximum participation by citizens.

Western vs Eastern

Our assessmentshows that developed countries in the West that had a higher rank on the globalhealth security index generally lagged behind East Asian and some SoutheastAsian countries on their epidemic control score. Considering the densepopulations in Asia, it is very important to analyze the reasons behind thisphenomenon. Based on our framework, the following five aspects are the mainfactors contributing to East Asian countries successful fight against theepidemic. They are: swift response and timely warning, the establishment ofnational-level special institutions to coordinate epidemic prion andcontrol efforts, the implementation of complete quarantine measures to cut offthe source of infection, ensuring the supply of medical supplies and improvingtesting capacity and treatment levels as well as providing prompt, accurate andtransparent disclosure of information.

Figure 9: Global Health Security IndexRanking and Proportion of Confirmed Cases among Total Population

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图17)

Note: Thehorizontal axis is the proportion of confirmed cases among the totalpopulation, and the vertical axis is the global health security index ranking(the higher the ranking, the better the pandemic prion ability)

Sources: YicaiResearch Institute, IMF

Global VaccineCompetition

Vaccines are thekey to overcoming the epidemic, and drug companies have stepped up research anddevelopment of these vaccines. As of early September, 33 out of 321 Covid-19vaccines in development had started clinical trials. Of them, the most advancedones have entered phase Ⅲ clinical trials and are expected topublish their results by the end of the year. It took several decades toresearch and develop vaccines for the hepatitis B virus, yet it has only takena few months to do the same for Covid-19. This is because it has become acontest of strength among the worlds scientific and technological powerhouses.

Figure 10: Vaccine R&D Progress (as of Aug. 10)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图18)

Sources: Milken Institute, Wellcome Institute, FT

Governments have spent tens of billions of US dollars on Covid-19vaccines and reserved some four billion doses with an uncertain delivery date.Goldman Sachs estimates that emerging markets can only cover less than a thirdof their citizens on average. Vaccine producers project that it will not bepossible to inoculate everyone in developing countries until 2024.

Economic Bailout

The novelcoronavirus had been detected in 215 countries and regions worldwide as of Aug.31. The global economy will contract by 4.9 percent, a level comparable to theGreat Depression in the early 20th century, according to an IMF estimate inJune. In a previous severe global financial crisis in 2009, the worlds economyshrank by only 1.7 percent.

Economicactivities have stagnated due to epidemic prion policies, with theconsumption and export-oriented sectors hit particularly hard. Forced orvoluntary social distancing, economic blockades, declining incomes and weakconsumer confidence have led to a significant decline in consumption andservice sector output, a synchronized recession that resonates globally throughtrade.

Countries havelaunched unprecedented economic rescue packages to pr economic collapseand subsequent humanitarian disasters. These measures include not onlyassistance to individuals (such as health insurance support, payments tolow-income people and unemployment benefits) but also economic assistanceprograms for commercial enterprises (such as corporate credit support).Referring to the IMFs classification method, we have identified three bailoutmeasures.

A. Government Spending

Governmentsmaintain the financial condition and liquidity of households and businesses byincreasing public investments, providing industrial support funds and expandingunemployment benefits. The specific methods include:

Income subsidiesand cash transfer schemes for workers and businesses, as well as paid sickleave and family leave for infected staff members who need to self-isolate andthose who have to stay home to care for their children during school closures(France, Japan, South Korea, Singapore, Spain, the United Kingdom).

Cash transferschemes targeting low-income households and the temporary extension of careeror unemployment benefits (Germany, Japan, UK, the US).

Supportingbusinesses to avoid layoffs by cutting working hours during an epidemic. TheGerman government subsidizes companies and pays social security contributionsfor the number of working hours cut. The Japanese government subsidizescompanies that can avoid lay-offs during the downturn. Italys government hasexpanded the beneficiaries of its income-subsidy fund to include theunemployed. The governments of South Korea, Singapore and the US are providingtemporary direct subsidies to hard-hit companies, including individualbusinesses.

The publicspending plan the Chinese government prepared at an early stage was put inplace ahead of schedule and focused in particular on supporting the publichealth sector and providing unemployment benefits and a broader social safetynet.

B. GovernmentIncome

Governments areslashing social security contributions, deferring payments and reducingvalue-added taxes to ensure that households and businesses have adequateliquidity. Specific measures include:

Extending therules on the carrying forward of loans to alleviate difficulties, so as tosupport the cash flow needs of enterprises; providing temporary tax cuts andexemptions to individuals and companies most impacted by the pandemic.

Deferring thedeadlines to pay social premiums and lowering the amount of prepaid taxes.

Governmentscould also consider granting special investment allowances for projects carriedout over a period of time, such as manufacturing when medical equipment is inshort supply, or temporarily lowering VAT rates to deal with supply restrictionand to support demand. The Chinese government eased tax burdens on players inthe most vulnerable sectors, including transportation, tourism and hospitality.The UK government exempted small firms in hard-hit industries from propertytaxes for one year.

Some governmentsallow cash-strapped firms to defer staff salaries and VAT payments (China,Italy, Japan and Vietnam) or to defer VAT payments due the next quarter to theend of the fiscal year (Italy and South Korea). China has opened up VAT rebatesand temporarily reduced social security payment rates for some companies.

C. LiquiditySupport

Many individualsand companies around the world face a drop in income, unemployment or bankruptcybecause of liquidity problems. In response, governments are providing cash flowsupport to companies and individuals through loans, guarantees and other formsof support. Specific measures include:

The governments of South Korea, Thailandand the United Kingdom have provided temporary loans to businesses andhouseholds affected by the outbreak.

The Australian government has subscribedto 50 percent of the AUD40 billion USD28.1 billion in unsecured loans thatlocal banks have offered to small and medium enterprises, in which the holdershave the right to share interest a single subion is capped at AUD250,000USD175,683.

So far, global liquidity supportincluding loans provided by governments, capital injections and securedcommercial loans (sometimes provided by state-owned financial institutions orstate-owned enterprises) is expected to come to as much as USD4.5 trillion, fargreater the size of government spending and revenue. Among the countriesproving huge liquidity support are France, Germany, Italy, Japan, UK and theUS.

Of the majorcountries, emerging markets are spending less on the three above bailout plansthan developed countries. China is less dependent on bailout policies thanks toits early containment of the epidemic and a lower level of economic recession.

Figure 11: Major Economies Degree ofDependency on Bailout Policies

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图19)

Source: IMF

These reliefpolicies will greatly worsen the financial situation of many countries. Forthose countries (mostly developed ones) whose public sector debt accounted formore than 100% of GDP before the epidemic, the pandemic relief measures willfurther restrict room for maneuver for future fiscal policies.

The fiscaldeficit of all countries in the world this year will account for 9.9 percent ofGDP, according to the IMF. The fiscal deficit rate of advanced economies willreach 10.7 percent. The deficit rates of the US, the Eurozone and Japan will be15.4 percent, 7.5 percent and 7.1 percent respectively. The fiscal deficit rateof emerging market economies will reach 9.1 percent while China and India willeach have deficit rates of 11.2 percent and 7.4 percent.

Table 7: FiscalBalance as a Percentage of Gross Domestic Products in US Dollars

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图20)

Source: IMF

D. Quantitative Easing During the Novel Coronavirus Pandemic

As the globaleconomy and financial markets have been seriously impacted by the pandemic,central banks in many countries have adopted unprecedented easing policies. Fordeveloped countries, quantitative easing has become a common monetary policytool since the last global financial crisis. Central banks, including the USFederal Reserve and the Bank of Japan, have even introduced an “unlimitedquantitative easing” policy that does not have an upper limit on the scaleof quantitative easing. For emerging markets, many economies have adoptedquantitative easing measures for the first time. On the day of announcingquantitative easing measures, the risk-free interest rates of emerging marketeconomies fell even more than developed economies. The central bank balancesheet of the Group of Ten has reached a historic USD22 trillion, according tothe IMF.

Figure 12: Changes in the Central Bank Balance Sheet of the Group ofTen

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图21)

Source: IMF

Table 8: Quantitative Easing Policies Announced by Major Central Banksduring the Pandemic

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图22)

Source: IMF

Pandemic controland economic relief are two sides of the fight against Covid-19. The goal is tohelp society get through this public health crisis more smoothly. Some believethat economic losses are the cost of fighting the epidemic, because strictsocial distancing policies will affect the economy from both the supply anddemand sides. However, our studies do not support this view. The relationshipbetween the two is not always the same. Countries with high epidemic prionscores will suffer relatively less economic impact according to our assessment.If a country can quickly pr the epidemic from spreading, it will reducethe lockdown period and thus reduce the impact on consumer confidence andlessen the economic fallout.

If we take Chinaand South Korea as examples, both countries implemented strict epidemicprion measures in the early stages of the outbreak and used advanceddigital technology to carry out epidemic prion policies. Both countrieshad the disease basically under control by March. The two countries thengradually got back to work and resumed production. The IMF expects the GDP ofthe two countries to only contract slightly this year. According tosecond-quarter economic data, Chinas economy has already resumed growth.

Figure 13: Pandemic Control Score and GDPContraction in 2020 (%)

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图23)

Note: Thehorizontal axis is the pandemic control index, and the vertical axis is thepredicted contraction of each countrys GDP in percentages based on October2019 data and the latest world economic outlook.

Source: YicaiResearch Institute, IMF

Economic Rebooting and Recovery

Governmentspolicy focus and framework need to change as the goal shifts from pandemiccontrol to rebooting the economy. For example, during the health crisis, thefocus is to suppress the virus at all costs and dispense rapid economicassistance to companies and individuals. The main policy measures include taxrelief, payments and other liquidity measures. In the economic recovery phase,as businesses get back to work and production gradually resumes, the focus ison how to manage virus transmission and provide structural support to specificindustries. Specific measures include short-term stimulus policies, increasedpublic investment and more structural measures to promote employment.

Table 9: Shiftof Policy Focus

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图24)

Source: AMRO

Public healthinvestment is very important considering the future state of the epidemic. Thelow-interest-rate environment provides an opportunity to implement proactivefiscal policies to support short-term demand, ng public health investmentprofitable. One purpose of boosting investment in the public health sector isto ensure that public health resources are abundant, which will affect thereturn on investment in certain fields. In addition to increasing financialsupport for public health, the government can also use preferential policies toensure that the private sector is willing to invest. The public health systemfocused on medical care rather than disease control in the past. This alsoneeds to be changed. If we take China as an example, the number of medicalworkers jumped by 84.2 percent nationwide from 2008 to 2018, while those in theChinese Center for Disease Control and Prion fell by 5.4 percent over thesame period.

Figure 14:Chinese Medical Workers and CDC workers

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图25)

Source: Wind

International Cooperation

The pandemic hasmade international cooperation vital. Global problems including the pandemiccan only be solved with effective and strong international cooperation. Manycountries chose to tighten export controls during the epidemic. However, due tothe high scarcity of epidemic control supplies amid the rapid spread ofpandemic, this led to the suspension and disruption of global supply chains.Our study examined the performance of countries assisting others in fightingthe epidemic, including providing financial assistance and restricting exportsof medical supplies. China has performed well in this area due to its strongmanufacturing capabilities and early control of the epidemic.

Figure 15: Major Countries InternationalCooperation Ratings

English Version,全球疫情应对和经济复苏综合评估报告,执行摘要(图26)

Source: YicaiResearch Institute

Our assessmentreviewed countries donations to the World Health Organizations COVID-19Solidarity Response Fund, which shows how active countries are in internationalcooperation. From this perspective, most countries performance is basically inline with their economic scale. The only exception is the United States, whichhas quite a low score in this area. The US notified the United Nations on July6 of its intention to formally withdraw from the WHO and end its 72-year membership.

Internationalcooperation amid the Covid-19 pandemic also includes the following fields:

Global debtreduction. At the G20 meeting held during the pandemic it was agreed to suspendthe debts of over 75 least-developed countries. The Executive Board approvedrelief on debt service for 25 member countries that are eligible for supportfrom the Catastrophe Containment and Relief Trust, with a further fourcountries expected to request such relief in the future. The approval enablesthe disbursement of grants from the CCRT for repayment of debts due to the IMFover the next six months, with potential extensions, up to a maximum of twoyears. China is also participating in the G20s multilateral debt mechanism.These are all positive measures given the sharp rising debt levels oflow-income countries amid the global recession. However, internationalcooperation still has a long way to go.

New SpecialDrawing Rights issuance and distribution. In April, manypoliticians and economists around the world proposed that the IMF should issueSpecial Drawing Rights during this special period to strengthen aid to theglobal financial safety net and resources, and give more to poor andleast-developed countries via optimized processes to improve aid efficiency. Amore aggressive plan is to issue USD1 trillion more SDRs (according to formerBritish Prime Minister Gordon Brown and former US Treasury Secretary LawrenceSummers). The SDR issuance and quota allocation have not made any progress yetdue to clear opposition from the United States.

Currency swap. Emerging marketcountries have seen the largest capital outflow in history since the beginningof this year, and many underdeveloped countries have or will face a US dollarcrisis. The Federal Reserve has taken action to integrate several central banksof emerging markets into its currency swap system. Economists suggest includingmore central banks and the IMF into the Federal Reserves currency swap systemand to suppress excessive exchange rate fluctuations (or excessive appreciationof the US dollar) when necessary to avoid severe debt and currency crises inemerging markets.

Food security. Some major grainexporting countries have imposed restrictions on grain exports during thepandemic, which may disrupt the worlds grain market and be detrimental toglobal political stability. International cooperation needs to ensure worldfood security and remove food export controls through consultation and policycoordination. The G20 should publicly commit to intervention if food prices onthe global markets rise.

Governancereform of global multilateral institutions. The governanceof the WHO has attracted much attention during the epidemic. Meanwhile, theWorld Trade Organization may encounter a breakthrough in governance reform whenselecting a new director-general. Though the reform of the Bretton Woodsinstitutions including the IMF, the World Bank and the WTO is difficult, it isthe only way to rebuild effective global governance in the post-epidemic era.

Digital taxesto address global issues. All parties paid great attention toglobal digital platform giants during the pandemic, with monopolies,competition policies, taxation and data protection being the focus. Collectinga digital tax on the worlds largest digital platforms to fund globalchallenges, such as climate change, WHO financing and new WTO mechanisms, is aninnovative measure that the G20 may consider.

In brief, theCovid-19 pandemic will coexist with mankind before effective vaccines can bewidely put into use. Effective governance that responds quickly usingtechnological means and which can depend on public support is an effectivestrategy to deal with the pandemic. Covid-19 will ually pass, but moreepidemics will follow. Large-scale investment in public health is the only wayto respond to and pr future epidemics. Meanwhile, global policymakers haveintroduced economic and financial policies of unprecedented intensity and scaledue to the economic fallout and the great recession caused by the epidemic,which will profoundly affect the future. National and public governancecapabilities, economic growth momentum and resource mobilization capacity arekey to determining the future strength of nations.

-The End-

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