COVID-19 — new hotspots amidst continued growing number of confirmed cases

05/25/2020

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Terence P. Stewart | Current Thoughts on Trade

On May 25th, there is continued global growth in the number of COVID-19 cases despite apparent control of the virus in its origin, China, and in a number of Asian countries that had early case loads. There also has been a sharp contraction in western Europe which had been a major hot spot for March and April and some decline in the United States, the country with the largest number of cases. Despite the positive news from some parts of the world, there have been sharp upticks in South America, in Russia, in various countries in the Middle East and in parts of Asia. While the numbers remain relatively low in Africa, there are also countries in Africa going through significant growth in the number of cases.

The European Centre for Disease Prevention and Control puts out a daily compilation of the global situation and includes epidemiological curves for the world broken by continents (as they have characterized countries and continents). The link to today’s issue is here and shows the bulk of the volume of new confirmed cases continuing to be from the Americas, with increasing volumes of new cases also coming from Asia. The data show reduced volumes of new cases from Europe and growing volumes of new cases (though still quite small) from Africa. https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases.

In South America, Brazil’s case load is skyrocketing, and the country now has the second most cases after the United States. Peru, Chile, Colombia, Argentina, and Bolivia are other countries in South America going through rapid growth rates in the number of new COVID-19 cases in the last two weeks.

In North America, Mexico’s cases are increasing rapidly, and the U.S., while having apparently peaked and started a decline, still shows the largest number of new cases of any country in the last two weeks.

In Europe, Russia, while appearing to have peaked, still has very large numbers of new cases and has the third largest number of cases of any country.

In the Middle East, a number of countries have large increases in the number of new cases, including Saudi Arabia, Kuwait, Qatar and the UAE.

In Asia, India and Pakistan are seeing large increases in the number of new cases.

In Africa, just two countries have as many as 10,000 confirmed cases — South Africa with 21,343 cases and Egypt with 16,613. Both countries have seen large increases in the last two weeks.

So the bottom line is that five months since data started to be collected on COVID-19 cases, the world is seeing continued growth in the number of new cases reported daily with a significant shift in the number of cases from China, Western Europe and parts of Asia to new hot spots in Russia, South America, the Middle East, certain large countries in Asia and in Africa.

Looking at twenty-two countries who were either early countries with COVID-19 confirmed cases or countries who have seen large increases in the first five months, there are other take-aways. The table in the embedded document below was compiled from the ECDC data base through May 24 (with updates for the U.K. and Spain for 5/24 since the 5-24 publication stopped at 5-23 for those two countries). The table has eleven columns of fourteen day periods from Jan. 6, 2020 through May 24, 2020 and a twelfth column showing data for the six day period Dec. 31, 2019 – January 5. The twenty-two countries shown accounted for 4,289,037 confirmed cases of the 5,273,572 global total cases shown in the May 24th publication (81.33% of all cases). Yet despite the presence of China, Japan, South Korea, Singapore, Taiwan, France, Germany, Italy and Spain among the 22 (all of whom show sharp declines in new cases in the last month or so), the number of new cases from the 22 countries collectively continues to increase each two weeks.

Countries who have dealt with COVID-19 most successfully had relatively short periods of peak numbers of new cases and sharp contractions of new cases within a month of the peak. The United States has had a relatively longer-term plateau of high infection rates and more limited reductions after the peak. Some of the new hot spots are still growing and so haven’t even peaked. If their internal efforts to control the spread of COVID are not more successful than the experience of the United States, the world is likely to continue in a period of upward growth of global cases which will keep extreme pressure on the global supply of medical goods needed by first responders and the public more generally. New hot spots will also necessarily mean a shifting of where health care systems are overwhelmed by rising numbers of cases.

In a prior post, I reviewed the recent G20 Trade and Investment Ministers statement and agreed program to support keeping trade flowing during the COVID-19 pandemic and addressing longer term needs, including increased capacity for medical goods. See G20 Trade and Investment Ministerial Meeting – Meaningful Help for COVID-19 Response and WTO Reform? https://currentthoughtsontrade.com/2020/05/17/g20-trade-and-investment-ministerial-meeting-meaningful-help-for-covid-19-response-and-wto-reform/.

There have been various articles reviewing some of the increased production occurring in China, in the EU and in the United States, among other countries. Such increased production provides the hope that the gap between supply and demand has been reduced or eliminated for some products. Declining number of new cases for many countries also means that their internal needs have decreased, which should permit redirecting supplies to countries in need.

For example, with the expansion of U.S. production of ventilators and the peaking of new cases about a month ago in the U.S., the U.S. has shifted from searching the world for ventilators to indicating it will export ventilators to countries in need (including the recent export of 50 U.S.-made ventilators to the Russian Federation). The level of increased production in the United States, an increase of more than 100,000 units, should significantly reduce any global supply deficiency for ventilators going forward. See https://www.npr.org/sections/coronavirus-live-updates/2020/05/21/860143691/u-s-sends-ventilators-to-russia-in-5-6-million-coronavirus-aid-package; https://www.politico.com/news/2020/04/21/trump-ventilators-africa-aid-199006.

One risk that remains is whether any increased production will be maintained over time or permitted to atrophy once the pandemic’s first phase has run its course.

Another risk goes to whether countries will address whatever barriers or disincentives exist to develop the needed capacity, increase the reliability of supply chains (with the possibility of some reshoring or building in greater redundancies in supply chain capabilities), or develop the inventories of medical supplies needed for addressing a phase 2 or some subsequent pandemic.

Finally, dozens of countries have imposed export restraints on medical goods to address domestic demand needs as the number of cases were increasing in the individual country. While the WTO provides flexibilities for countries to impose such restraints, the flexibilities are intended to be used only for temporary purposes. Many of the restraints imposed have not been removed by countries even if their current situation should permit the reduction or elimination of the restrictions. Hopefully the WTO review process and agreements by G20 and other groups will facilitate a rapid elimination of such restraints when no longer needed or justified.

Conclusion

Most of the developed world has come through the first phase of the COVID-19 pandemic in terms of controlling the spread and reducing the number of new confirmed cases. Countries who have gotten past their peak infection rates are now starting to reopen their economies to reduce the economic damage that has already been extraordinary for many countries.

Unfortunately, other countries, who have not been the hot spots for COVID-19, see increases in cases that surpass the declines in those who have gotten through the peaks of infections in their countries. Thus, total new cases continue to increase even after five months since data were first collected.

The growing number of confirmed cases make collective efforts to keep markets open and any export restraints imposed temporary in fact, to expand production of medical supplies, to share best practices, to ensure adequate financial resources for the world’s poorest countries and to expedite development of vaccines and therapeutics critical if the extent of the economic and human damage from this pandemic is to be capped and reduced going forward in the second half of 2020.

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