As the National Treasury warned last week, South Africa’s economy could contract by 16% in 2020 and more than 7 million jobs could well be lost if the Covid-19 pandemic takes a long time to recede and attempts at recovery are spread over many years.
Even if the pandemic is quickly contained and the economy bounces back, GDP will shrink by 5.5% this year while almost 3 million people are likely to lose their jobs, the Treasury adds.
Business For South Africa (B4SA) has even worse projections, for it sees GDP contracting by 10% this year (if we move to Level 2 in June) and by 17% (if level 5 returns in the winter months from June to August). At the same time, the South African Revenue Service (SARS) warns that revenue collection could shrink by R285bn this year.
Despite these dire warnings, the government seems determined to maintain the lockdown for another six to eight months, as Dr Nkosazana Dlamini-Zuma said last week. This is irrational and unreasonable when the lockdown cannot protect the millions living in overcrowded areas or having to queue in close proximity for social grants and food parcels. It also ignores a growing body of local and international research questioning the benefits of general lockdowns.
Many more deaths
Within South Africa, a new model developed by a group of local actuaries and other experts calling themselves Panda (Pandemic ~ Data Analysis) points out that a prolonged lockdown will result in many more deaths – and hence in many more ‘years of lives lost’ – than the pandemic itself.
Panda has urged President Cyril Ramaphosa to lift the lockdown with immediate effect. The country, it says, should be ‘cushioning the old and infirm’, but it should also be ‘doing everything possible to allow businesses to operate’. It should no longer ‘incarcerate the masses in their homes’ and must stop ‘decimating the economic system that furnishes their livelihoods’.
Also relevant are two separate studies (in Israel and the United States) which show that the exponential growth in SARS-CoV-2 infections so often evident does not continue unchecked, as most models of likely fatalities assume. Instead, that exponential growth soon begins to tail off, both in countries with lockdowns and in those without.
The authors of these studies (Professor Isaac Ben-Israel of Tel Aviv University and Professor Michael Levitt of the Stanford School of Medicine) strongly advise against the general lockdown strategy. This is not only based on faulty assumptions, but also increases poverty and triggers many more deaths from other causes. ‘When we come to look back on this,’ says Professor Levitt, ‘the damage done by lockdown will exceed any saving of lives by a huge factor’.
If lockdowns are not the explanation, why then does the exponential growth in infections soon fall away? A new study from the Liverpool School of Tropical Medicine suggests that the answer could lie in a lower threshold for ‘herd’ immunity – at 10% to 20% of the population – rather than the 60% earlier assumed.
For the past six weeks it has been widely accepted that herd immunity will not arise until 60% of the population has been infected. However, this conclusion is based on the assumption that all people are equally susceptible to the virus, when this is not so. In general, about 10% to 20% are easily susceptible: either because they are frail or because (as ICU nurses, for example) they are frequently exposed to the virus.
The impact of this insight could be considerable, as The Spectator reports: ‘As the epidemic progresses the pool of easily-infected individuals dries up and the virus has to search out new victims who are less-easily infected.’ On this basis, herd immunity could develop once 10% to 20% of the population has been infected.
Also important is new research from Sweden showing that the virus’s reproduction rate (the ‘R’ metric) there has fallen to 0.85, significantly below the crucial level of 1. (If every infected individual infects less than one other person, the virus will stop spreading.) Sweden’s low R number has been achieved without resorting to a lockdown. It is also much the same as the current R number (0.8) in the UK, which has endured many weeks of lockdown.
Voluntary social isolation
Sweden’s R number is also very different from what the UK’s Imperial College model had earlier predicted. This model took the view that voluntary social isolation would never work and that lockdowns would therefore have to be imposed.
Sweden’s refusal to go into lockdown, said the Imperial model, would leave the virus rampaging through the country, with every infected individual transmitting the disease to another three or four more people. An R number of between 3 and 4 would lead to 40 000 Covid-19 deaths by 1 May and almost 100 000 by June.
The latest figures for Sweden show a total of some 2 680 deaths by early in May. Deaths have also been falling for the past two weeks, perhaps because an estimated third of people in Stockholm have been infected and herd immunity might be close at hand.
Sweden’s refusal to lock down has been criticised by many in the media, who seem to suggest that the only deaths that matter are Covid-19 deaths – and that a general lockdown is the sole acceptable response.
Sweden’s prime minister counters that the country has instead relied on the ‘Folkvett’ or common sense of ordinary people. The government has treated them like adults and trusted them to take the necessary steps – and they have responded accordingly.
Significant too are seven recent ‘seroprevalence’ studies, aimed at testing how many people in different parts of the US and Europe have developed antibodies to the virus. These studies show significant percentages of prior (or existing) infection. They also indicate that infection fatality rates are far lower than earlier models by Imperial College and others had predicted.
In South Africa, however, the ANC/SACP alliance seems intent on ignoring this mounting body of research. It also seems determined to maintain an inordinately strict lockdown for another six months or more.
This stance points to a profound contempt for Treasury and other warnings about the potentially catastrophic economic damage that lies ahead. It also disregards the fact that even the strictest lockdown cannot prevent the transmission of the virus in the over-crowded townships and informal settlements where millions of the poorest people live.
Why is the alliance so willing to shutter – and thereby shatter – so much of the economy? Why is it simultaneously so indifferent to the increased destitution, disease, and death a prolonged lockdown is sure to generate?
The reason lies in the ANC’s determination to use the Covid-19 crisis to press ahead with the Soviet-inspired national democratic revolution (NDR) to which it has been committed since at least the 1960s.
Weaken the private sector
The ANC wants to use the crisis to weaken the private sector, build dependency on the government, introduce prescribed assets for pension funds and other financial institutions, induce the Reserve Bank to print the money needed to maintain state spending, overcome resistance to the NHI, and open the way to increased land and other nationalisations.
With so many major NDR gains now on the table, the last thing the ANC wants to admit is that much of the local and international research contradicts its chosen strategy. A strict lockdown for many more months is not the best way to counter the pandemic. However, it will help push the country further down the path to socialism – and that, in the ANC’s perspective, is all that matters.