Gareth Vaughan on tackling COVID-19 which may keep returning, Sicily's tourism plan, Dr Doom's greater depression, a busy airport, underestimating the death toll & buying coffee whilst social distancing

This COVID-19 Top 5 + 2 lockdown special comes from interest.co.nz's Gareth Vaughan.

As always, we welcome your additions in the comments below or via email to david.chaston@interest.co.nz. And if you're interested in contributing the occasional Top 5 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 5s here.

So how has Alert Level 3 been for you so far? Around my way there has certainty been more traffic on the roads and noise from the nearby resumption of roadworks. And venturing into interest.co.nz's office on Wednesday morning, there was a reasonable volume of traffic on the motorway and construction has resumed on the building site over the road. 

1) Using science and technology to solve the problem of COVID-19.

Long time interest.co.nz readers and viewers may remember Michael Parker. An ex-pat Kiwi, he's managing director, strategist, and director of research at Bernstein in Hong Kong. Here's a video interview I did with him in 2011 about his book The Pinetree Paradox where he argued New Zealand needed to create an innovation cycle centred around a great research university.

In a research note Parker tackles the question of why equity markets have been rising this month when globalisation is under attack and a long recession is predicted thanks to "a viral enemy that will take years to defeat." He probes the developments in commercial air travel since the 1970s, and argues the dynamic consistently left out in the current gloomy prognosis is incremental improvement through technology.

The failure of our institutions and our capital allocation model to address the risks highlighted by SARs in 2003, H1N1 in 2009 and MERS in 2015 has justified – in part – this skepticism. Even so, over the last 70 years, science and technology have consistently solved problems like Coronavirus - or plane crashes – by increments, once incentives align to do so. Humanity's inability to correctly size long-term, collective risk is evident to any climate activist. This is not that. Covid-19 is an immediate, tangible and highly personal problem. As a species we are wired for exactly these kinds of risks. And, due to advances in medical sciences and communications, we have never been better at addressing a problem like Covid-19 than right now.

And:

Coronavirus – like air travel – is a risk susceptible to manipulation by science and technology. The good news for us is that – unlike air travelers in 1970 - we are not going to have to wait 50 years. We are going to have to wait until May (fingers crossed) for Gilead's remdesivir clinical trial results; or August (fingers crossed) for the results from neutralizing antibody clinical trials; or the results of a thousand other initiatives that are underway currently but that will never attract any attention unless they show promise (like nicotine patches suppressing Covid infection in Parisian hospitals). The one big solution – vaccines - may take years. But a thousand small improvements to mitigate risk are also in process.

And, once we reach "normal", whether this autumn, or 2021, or 2022, we are all going to return to all the frivolousness (including air travel) that we lost three months ago… and we will probably return with a vengeance. All that is likely to happen long better the vaccine arrives. That's great news for society, economic integration and markets. And maybe it sounds naively confident. But the opposite view requires a dismissal of science and technology… and of modernity in general. That's why markets are up. Surely, I cannot be serious? I am serious. And don't call me Shirley.

2) Virus may keep returning.

For a significantly more downbeat perspective than Parkér's, Bloomberg reports that, according to some Chinese scientists, it's unlikely the new virus will disappear like SARS did 17 years ago because it infects some people without causing obvious symptoms such as fever.

This group of so-called asymptomatic carriers makes it hard to fully contain transmission as they can spread the virus undetected, a group of Chinese viral and medical researchers told reporters in Beijing at a briefing Monday.

With SARS, those infected became seriously ill. Once they were quarantined from others, the virus stopped spreading. In contrast, China is still finding dozens of asymptomatic cases of the coronavirus every day despite bringing its epidemic under control.

“This is very likely to be an epidemic that co-exists with humans for a long time, becomes seasonal and is sustained within human bodies,” said Jin Qi, director of the Institute of Pathogen Biology at China’s top medial research institute, the Chinese Academy of Medical Sciences.

This map shows the current position of oil tankers, also called tankers, mostly filled with oil. They are “stranded” around the world because there is no way to unload, since onshore warehouses are full, pipelines are full, and without flow, due to the low demand for oil. pic.twitter.com/k0Lak5VmLo

— Stocks Analyst (@flyingcalls) April 28, 2020

3) Pay them and they will come?

London's Evening Standard says Sicily plans to cover some of visitors' costs in order to reboot tourism post-coronavirus. The timing for when they might be able to actually implement such a scheme is, of course, up in the air. But doubtless other tourist-dependent economies will be having similar thoughts.

The Italian island has said it will cover half of flight costs and a third of hotel expenses for travellers wishing to visit, as well as free tickets to many of its museums and archaeological sites. 

Since the island closed its doors on March 10, it has lost upwards of €1 billion (£873 million) in tourism-related revenue and while the proposed scheme would cost the island €50 million (£43 million), it hopes to make this back as tourists flock in once lockdown laws ease. 

Having been there on holiday years ago. I'd certainly recommend Sicily...

4) Death toll may be much higher than reported.

I'm quite interested in the differences between the ways countries are reporting COVID-19 cases and deaths. Here in New Zealand the authorities are reporting confirmed and probable cases. Not everywhere is doing that. And some countries with higher fatality rates are only reporting the deaths of COVID-19 victims when they occur in hospital. 

On this moribund note, the Financial Times (not paywalled) estimates the COVID-19 death toll could be nearly 60% higher than reported in official counts.

To calculate excess deaths, the FT has compared deaths from all causes in the weeks of a location’s outbreak in March and April 2020 to the average for the same period between 2015 and 2019. The total of 122,000 amounts to a 50 per cent rise in overall mortality relative to the historical average for the locations studied.

In all the countries analysed except Denmark, excess deaths far outnumbered the official coronavirus death tolls. The accuracy of official death statistics from the virus is limited by how effectively a country is testing people to confirm cases. Some countries, including China, have retrospectively revised up their death tolls from the disease. 

5)  A surprisingly busy airport.

The tweet below caught my eye this week. It's another sign of the impact COVID-19 is having on the world, in this case especially where air travel is concerned. 

On Saturday, ANC was the world’s busiest airport for aircraft operations. This points to how significantly the global aviation system has changed and highlights the significance of our role in the global economy and fight against the COVID-19 pandemic. pic.twitter.com/z34ZmjoaKL

— Anchorage Airport (@ANCairport) April 28, 2020

With passenger flights all but grounded, this CAPA report from August last year foreshadows the significance of  Anchorage Airport during this pandemic.

Anchorage is mostly recognised today as a major air cargo hub, owing again to its strategic location on the shortest routing between many points in North American and Asia.

This is of particular importance to cargo carriers because of the lower range capabilities of most cargo aircraft. FedEx and UPS are major operators at Anchorage, along with over 30 other international cargo airlines. Anchorage remains an important fuel stop for these airlines to ensure maximum payload capability.

‘Air crossroads of the cargo world’ is a name that still fits.

The report notes logistics company Panalpina has forecast the airport will become a major e-commerce hub.

Returning to Panalpina’s forecast, to back its claim that e-commerce will drive the airport’s next round of expansion, it gives the following reasons:

• The airport is located less than 10 hours by air from 95% of major global markets;
• Amazon has recently launched daily services to the airport;
• Approximately 80% of all trans Pacific cargo services make a technical stop at the airport;
• When making fuel stops at the airport, aircraft are able to carry significantly more revenue-generating cargo and less fuel than they would have needed for a nonstop service (a reiteration of what is already known);
• The airport possesses liberalised cargo transfer rights granted by the US Department of Transportation, making it one of the few airports in the world where foreign cargo can be transferred without being subject to customs and other trade regulations;
• The airport is investing USD85 million in 2019 to support expansion projects such as its north-south runway and a new airline gate;
• Infrastructure investments to match booming trade, especially in e-commerce.

6) Dr Doom's 10 reasons why a 'Greater Depression' is inevitable.

Dr Doom, aka professor of economics at New York University’s Stern School of Business Nouriel Roubini, says even if there's a "lacklustre U-shaped recovery" this year, an L-shaped “Greater Depression" is coming later in the decade. And Roubini gives 10 reasons why.

These 10 risks, already looming large before Covid-19 struck, now threaten to fuel a perfect storm that sweeps the entire global economy into a decade of despair.

Debt, unemployment, technology and tension between the US and China feature. And his second reason, I think, highlights one of many significant challenges ahead.

A second factor is the demographic timebomb in advanced economies. The Covid-19 crisis shows that much more public spending must be allocated to health systems, and that universal healthcare and other relevant public goods are necessities, not luxuries. Yet, because most developed countries have ageing societies, funding such outlays in the future will make the implicit debts from today’s unfunded healthcare and social security systems even larger.

7) Kiwi coffee ingenuity tackles the social distancing problem.

This week's move to the more lenient alert level 3 from level 4 shows we New Zealanders really missed takeaways and coffee from our favourite cafes. And as the two tweets below demonstrate, some of our enterprising cafes aren't going to let strict social distancing requirements prevent them from serving coffee to their customers.

Love the Kiwi ingenuity!! pic.twitter.com/zBXao8nud9

— Stephanie Whyte (@pinkstephness) April 27, 2020

And:

From the land of #innovation @ianbremmer FYI https://t.co/c9tkNFNNIS

— Sunil Kaushal (@nzindmgt) April 29, 2020