20200401_185359_0000

PSA 1 - Author final

REJ CORTEZ TORRECAMPO
Senior Analyst
PCEDS  COVID-19 Research Group

PCEDS Strategic Analysis: COVID-19 Monitoring                    Issue No.1:  01 April 2020

COVID-19: How We Are All Threatened by an Enemy We Do Not See

By: Rej Cortez Torrecampo, Senior Analyst

Introduction

“[T]he health of all peoples is fundamental to the attainment of peace and security and is dependent upon the fullest co-operation of individuals and States.”

-World Health Organization Constitution

The world is sick. People’s health is threatened by a novel pathogen named the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), also referred to in this text as the COVID-19 virus, while the outbreak leads to serious economic, social, political, and security consequences.  For the Philippines, containing the spread of the virus is a daunting task. With the absence of a vaccine, the government has limited options on their list, and most of the countermeasures instituted so far are non-medical interventions.

The Department of National Defense (DND), as the agency responsible for national risk reduction and management, is a critical player in ensuring the success of the non-medical countermeasures pursued by the national and local governments. The Armed Forces of the Philippines (AFP) is also expected to significantly contribute to humanitarian and crisis response operations and to continue with its territorial defense operations.

The National Defense College of the Philippines-Philippine Center of Excellence in Defense, Development and Security (NDCP-PCEDS) is forming a research team composed of its resident defense analysts to identify urgent problems, gaps, and challenges in the early stage of this public health emergency through a series of articles under the PCEDS Strategic Analysis (PSA) publication. The team looks into the problem from the lens of national security.

While one may argue that the problem is a health concern, the multifaceted implications caused by the spread of the virus is better understood using a national security lens. Since the crisis is still ongoing, these articles to be published do not provide full, detailed, and comprehensive discussions of all aspects of the COVID-19 pandemic. Still, the findings and assessment provided can be used in designing additional interventions and can be used to inform the review of current countermeasures.

The Problem and Its Causes

The COVID-19 is first and foremost a public health problem. The number of confirmed cases and fatalities are increasing day by day (see Fig. 1). As of 10:00 CET 30 March, there are 693, 224 confirmed cases and 33, 106 deaths in 203 countries, areas, and territories. With this, COVID-19 is a global health security concern. Global health security is defined by the World Health Organization (WHO) as “activities required to minimize the danger and impact of acute public health events that endanger the collective health of populations living across geographical regions and international boundaries.”

To achieve this, the WHO revised its International Health Regulations (IHR) to emphasize the relationship between pandemics and security. The IHR identified eight (8) core capacities in the following areas to prevent and contain public health emergencies of international concern:

  1. national legislation
  2. policy and financing
  3. coordination and National Focal Point (NFP) communications
  4. surveillance
  5. response
  6. preparedness
  7. risk communication
  8. human resources and laboratories

Global health security further emphasizes that capacity failure of one state may put other states in danger. In 2019, the Nuclear Threat Initiative (NTI) and the Center for Health Security, John Hopkins Bloomberg School of Public Health released the first comprehensive assessment of global health security capabilities captured in the Global Health Security (GHS) Index, and the results paint a bleak picture of global health. Results show that “no country is fully prepared for epidemics or pandemics” and “international preparedness is weak.” Therefore, in the case of the COVID-19, the problem lies with states that neglected their commitment in building their core capacities for preventing and containing public health emergencies, and with state and non-state actors who have the capacities but fell short in global cooperation.

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Figure 1. COVID-19 Cases by the Date of Report

Source: World Health Organization

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Figure 2. Countries, territories, and areas with reported confirmed cases of COVID-19, 30 March 2020

Source: World Health Organization

Situational Analysis of the Global Environment

203 countries, areas, and territories are now affected by the COVID-19, albeit in varying degrees (see Fig. 2). Most of the cases are now classified as local transmissions[i]. Aside from the Severe Acute Respiratory Syndrome (SARS) and the Middle East Respiratory Syndrome (MERS), COVID-19 is already the third epidemic caused by the coronavirus in the 21st century. Unfortunately, as the COVID-19 virus continues to spread in many parts of the world, it has already surpassed the infected cases of the previous coronavirus diseases. While the mortality rate is said to be much lower than the 10% for SARS and 37% of MERS, there is less certainty at this point as the confirmed cases continue to rise.

Since 28 February, the risk assessment of the WHO at the global level was already very high, which is the highest level of alarm. However, the WHO reiterated that containment is still possible and that the decision to elevate to the highest level of alert and the highest level of risk assessment was not done to alarm or scare people. Instead, this assessment emphasizes further the role of the government and the people to pursue the “all-of-government” and “all-of-society” approach. The WHO is calling governments to “wake up, get ready” and to do their duty to their citizens, and the world by being prepared.

However, many governments were still not heeding the call. According to WHO, they have been monitoring and assessing the outbreak and they are still “deeply concerned both by the alarming levels of spread and severity and by the alarming levels of inaction.” Considering all these, the WHO declared the COVID-19 as a pandemic on 11 March 2020. With this declaration, COVID-19 becomes the first pandemic caused by a coronavirus. The pandemic declaration signifies that the disease is already crossing international boundaries and is affecting a large number of people across the globe. Apart from the health implications of the new virus, pandemics also have causes serious economic impact and social repercussions (see Fig. 3).

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 Figure 3. Spectrum of disease risk

Source: GHRF Commission by El Turabi and Saynisch, Harvard University

The Neglected Dimension of Global Security: A Framework to Counter Infectious Disease Crises

1. The Toll on the Global Economy

Quantifying the economic effects of the COVID-19 at this point is both a daunting task and one that is full of uncertainties. However, the economic implications that are unraveling together with the spread of the disease require attention for governments to properly balance the health objective with their economic interests in their chosen policy measures. According to UNCTAD, the trade and development arm of the UN, while the crisis is “first and foremost a public health threat, it is also, and increasingly, an economic threat.” They strongly argue that the COVID-19 shock will trigger a recession in some countries and a deceleration of global annual growth to below 2.5% – often taken as the recessionary threshold for the world economy.” They offer two perspectives on the economic consequences of the COVID-19, which may influence and inform policymakers in countries that are already affected.

First, the shock has the potential to disrupt the ongoing global economic recovery that had set in during the second half of 2017. If in this paradigm the pandemic is short-lived, “a familiar mix of accommodative monetary policies and automatic fiscal stabilizers should be sufficient”, however, if it is more long-term, the success of recovery will depend on “more sustained and coordinated liquidity injections by Central banks, more active fiscal policies, and by renewed efforts to bolster free trade and foreign investment.” The second perspective suggests that the economic consequences linked to the COVID-19 are more related to the leadership and coordination required rather than an issue of time and confidence to prevent the “crisis from crashing into an already fragile and highly-financialized world economy.” In this case, macroeconomic measures are inadequate in response to the economic ramifications and reduce the chances of an economic breakdown, instead, “remedial policies and institutional reforms” are critical to “build a robust, sustained, equitable and climate-friendly growth trajectory”. So far, the world is experiencing indicators that suggest the likelihood of the first perspective.

Before the spread of the coronavirus outside China, the global economy has already felt some shocks as many of the global economic activities are driven by the Chinese economy (see Fig. 4). A wider consequence of COVID-19 is its impact on the global economy as “China is integral to nearly every sector of the global economy.” For instance, one response of the Chinese government is to order factories to stay closed or to run at low capacity, which affects its production for exports.

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Figure 4. China’s share in the global economy since 2000.

Notably, OECD warns that the global economy is facing the “gravest threat” since the 2008 financial crisis. The policy measures associated with combatting an epidemic or pandemic (i.e. travel restrictions and bans, city lockdown, etc) usually have serious implications for the movement of people, goods, and services across borders. The OECD Interim Economic Outlook report further discusses the economic effects of COVID-19 in terms of how the containment measures affect the supply and demand. Containment measures usually include quarantines, travel bans and restrictions, and closure of public places, among others. They usually affect the supply side by ordering the closure of factories, cutting back in service provisions, and disrupting the supply chain. On the other hand, demand-side is affected that usually results in loss of confidence, a decrease in business and tourism travels, and the need for alternative education and entertainment services.

Similarly, UNCTAD identified three main channels of economic disruption, namely, demand, supply, and finance. The demand side tells a story of how private spending is negatively affected by the decline in income, the public fear of contagion and the absence of a vaccine. Service sectors that rely on public events, large gatherings and the high volume of people are the most affected. Employees who will be forced to reduce their working hours without proper subsidy and the possible layoffs that may occur are also significant factors in the likely decrease in household spending. Finally, private investment will most likely be delayed due to so much uncertainty. With these, it is generally assumed that the demand effect of the COVID-19 shock is negative in the short-run. The supply side is disrupted as manufacturing activities are halted in areas already affected by the virus. The continuous decrease in commodity inputs that are needed for manufacturing the final goods will force factories even in virus-free areas to close. At the macro level, this means export-import will sharply decline as the number of virus-infected countries increases. The effect on the supply-demand, therefore, could affect the aggregate demand and financial stability. Finally, economic disruption through the financial channel will occur as the COVID-19 shock leads to an increase in risk aversion and the flight to liquid assets amidst the uncertainty, which have already led to a market correction or the decline of a stock index by more than 10%.

Most of these, if not all, lead to the conclusion of a slowdown in the global economy. At the time of writing of the OECD report, the best-case scenario was the limited outbreaks outside China. Still, in this scenario, “a sharp slowdown in world growth is expected in the first half of 2020 as supply chains and commodities are hit, tourism drops and confidence falters.” The projection shows a decline from the 2.9% global economic growth in 2019 to a 2.4% growth rate for 2020. However, the numbers for the Asia-Pacific region and advanced economies are not that promising. While broader contagion occurs in these parts of the globe, “containment measures and loss of confidence would hit production and spending and drive some countries into recession, including Japan and the euro area.”

In another economic outlook done by Hugo Erken et al, they forecast a global economic growth of 1.6% for 2020, which has been adjusted to consider the result of the outbreak of the COVID-19. From their calculation, in the scenario where the virus spreads further, China’s economic growth drastically falls to 0.2% while the growth of the global economy will only be 0.7%.

2. Social Ramifications

The public health problem brought by the COVID-19 virus also has social ramifications since it may exacerbate existing inequalities. The fight against the new disease greatly depends on the capacities of individual countries, in such cases, other countries will certainly have some leverage in preparing and responding to the pandemic. Therefore, some countries that are now affected by COVID-19 might need “international support due to their weak health systems, lack of resources and diagnostic kits, and poor economic situations.”

Apart from this, there is a serious concern over mis- and disinformation being spread regarding the origin of the virus. Particularly in social media, there is information being circulated as early as January that the new coronavirus may be a bioweapon of the Chinese government. A MilitaryLeak article published on 26 January 2020 featured an Israeli biological warfare expert by the name of Dany Shoham discussing the possibility that the coronavirus is an accidental result of biological weapon research being conducted at the Wuhan Institute of Virology (WIV). Other rumors point to the US as the perpetrator of this new virus. In February, the Japanese Asahi news report claimed that the coronavirus did not originate from China, instead, it came from the US. The authors of this report tried to retrieve the news made by the Japanese TV, but only a related article published in Global Times (China) on 13 February 2020 refers to the said news. Though this information seems preposterous, national leaders in the US and China are still breathing life into this conspiracy theory. What is alarming is how harmful these mis- or disinformation are in times of crisis as it may stir away the attention of policymakers from the core problem and such news may even inform their decisions and policies.

Situational Analysis of the Regional Environment

The total number of confirmed cases in the ASEAN Member States account for 1.15% of the total confirmed globally while the region accounts for 0.70% of the total deaths worldwide. Malaysia currently has the highest number of COVID-19 cases while Indonesia records the highest number of deaths. Notably, Cambodia, Laos, Myanmar, and Vietnam have no COVID-19 related deaths so far while Brunei reported its first death recently (see Table 1).

Table 1. Confirmed Cases and Deaths in the ASEAN Region

Source: World Health Organization

Country Confirmed Cases New Cases Deaths New Deaths
Brunei Darussalam 126 6 1 0
Cambodia 103 1 0 0
Indonesia 1285 130 114 12
Laos  8 2 0 0
Malaysia 2470 150 34 7
Myanmar  8 0 0 0
Philippines 1418 343 71 3
Singapore 844 42 3 1
Thailand 1524 136 9 2
Vietnam 188 9 0 0
TOTAL 7974 819 232 25

 

From the risk assessment of ASEAN, COVID-19 affected countries are categorized into four transmission categories: a) countries reporting fewer than 100 confirmed cases; b) countries reporting an increasing rate of COVID-19 transmission; c) countries reporting a steady or decreasing rates of COVID-19 transmission; and d) countries reporting case counts that do not align with observed international COVID-19 exportation. Brunei and Cambodia are categorized in group A while Malaysia, the Philippines, Thailand, and Vietnam are part of group B. Finally, Singapore and Indonesia are part of group C and D, respectively. (see Table 2).

Table 2. Transmission Category of COVID-19 Affected ASEAN Countries

Source: ASEAN BioDiaspora Regional Virtual Centre

Country Transmission Category (19 March)
Brunei A
Cambodia A
Indonesia D
Malaysia B
Philippines B
Singapore C
Thailand B
Vietnam B

 

The ASEAN Senior Officials Meeting on Health Development (SOMHD) is at the forefront of regional efforts in the whole spectrum of preparedness, detection, mitigation, and response measures. The SOMHD is guided by the ASEAN Post-2015 Health Development Agenda (APHDA) and its Governance and Implementation Mechanism (GIM). At the heart of the ongoing regional efforts is the principle of whole-of-health-system and whole-of-government approach. Currently, it has operationalized the established and existing health mechanisms provided in the APHDA and GIM, particularly for technical exchanges, information sharing, and updates on policy-related measures in responding to the COVID-19. Daily situational updates are also being prepared and provided by the ASEAN Emergency Operations Centre Network for public health emergencies (ASEAN EOC Network), led by Malaysia, and the ASEAN Secretariat in Jakarta. Aside from this, it has also established real-time information sharing through mobile instant messaging within the ASEAN EOC Networking. The ASEAN BioDiaspora Regional Virtual Centre (ABVC), led by the Philippines, is another regional mechanism for sharing information and analyzing the situation. The ABVC uses big data analytics and visualization that complements the national risk assessments, readiness and response planning efforts. Notably, they were at the forefront of producing the report entitled Risk Assessment for International Dissemination of COVID-19 across ASEAN region.

The region is also affected economically. At the height of the US-China trade war, ASEAN has overtaken the US as China’s second-largest trading partner. Since the coronavirus outbreak in China, the supply chains in the region were disrupted leading to some economic slowdown. ASEAN governments have taken up monetary and fiscal policies to address the slowdown and to prevent the situation from worsening (see Table 3).

Table 3. Monetary and Fiscal Policies to Address the Economic Consequences of the COVID-19 pandemic 

Source: ASEAN Briefing, 20 March 2020

Country Monetary and Fiscal Policies
Cambodia

The government regulates to support enterprises affected by COVID-19 and from the partial withdrawal of “Everything but Arms” (EBA) status by the European Union (EU) (Feb 2020).

  • Tax exemption for hotels and guesthouses from February to May 2020.
  • General Department of Customs and Excise (GDCE) will ease in facilitating the import of raw materials, parts, and accessories, used for textile and garment production.
  • Tax holiday of six (6) to one (1) year for companies severely affected by the disruption caused by the COVID-19.
  • Suspension of 4% stamp duty tax on the transfer of residential properties from February 2020 to January 2021
  • Low-interest loans allocated for SMEs in the agriculture sector.
Indonesia
  • The government released two (2) stimulus packages
  • First Package – US$ 725 million released in Feb 2020

o US$ 6 million for local airlines and travel agencies;

o US$ 10 million for marketing and promotion activities for Indonesian tourism destinations;

o US$ 27 million for discounts to domestic tourists visiting one of the 10 tourist destinations promoted by the Indonesian government;

o US$ 324 million for the government’s Affordable Food Program to support 15 million low-income households purchase staple food at discounted prices

o US$ 104 million for a subsidized housing program to finance 175,000 new homes

o Taxes are waived for hotels and restaurants located on the 10 destinations.

  • Second Package – US$ 8 billion in March 2020

o Corporate income tax was reduced by 30% for enterprises in 19 selected manufacturing industries for the next six (6) months.

o Enterprises in the 19 sectors are eligible for deferral on import tax payments for the next six (6) months.

o Employees in the 19 sectors who earn an annual income below the determined threshold will be exempted from paying income tax for six (6) months.

o Simplification of import and export activities.

o The government shall assist businesses that are considered “reputable trader’.

o SMEs with good credit history are eligible for loans up to US$ 655,000.

 

Malaysia
  • Stimulus package worth US$ 4.8 billion (Feb 2020)
  • Banks to restructure and reschedule loans.
  • The tourism sector (i.e. hotels, airlines, and travel agencies) will be given a deferment of their monthly tax installments for six (6) months starting 01 April 2020.
  • Travel discount vouchers for domestic tourism amounting to US$ 113 million.

 

Assessment

“Global health security is a global public good – making each of us safer depends on making all of us safer; holes in one community’s defenses are holes in all of our defenses. Global leaders must, therefore, commit to creating and resourcing a comprehensive global framework to counter infectious disease crises. We cannot afford to continue to neglect this risk to global security.” 

-The Neglected Dimension of Global Security: A Framework to Counter Infectious Disease Crises, 2016 

1. The Irony of the Information Age

What started as a public health concern in the city of Wuhan has gained traction in a few months that it is now a legitimate global security problem. Global supply chains have been disrupted, trade that fuels most of the economies of the world have slowed down, and tourism that contributes to the national economy of many emerging markets were limited. This raises the negative implications of an integrated world, that is, an event in a remote area can send shock waves thousands of miles away from its shores. In this case, it is easy to eye globalization as an enabler of the spread of the disease; however, a closer examination suggests that it is the weak integration in terms of information that may have enabled it. While some may claim that the news surrounding the decision of the Chinese government to suppress information about the coronavirus in December is tainted with biases of the Western media, this does not invalidate the argument that information, especially on unknown viruses and diseases, is important to be shared to the medical and scientific community. In cases of possible human-to-human transmission, time and information are critical. Thus, while the global economy is very much integrated, global information is still far behind. This is quite ironic in an era where information has been a key element of growth and development.

2. The Threat to Human Lives is at the Core of this Pandemic

Against this global economic background is the true consequence of the pandemic: the threat to human lives. Since the first Situational Report released by the WHO on 21 January 2020, the number of confirmed cases is now in the hundred thousand while more than 12,000 individuals have lost their lives to this newly-discovered virus. At the end of every day, the world is losing lives and governments are dealing with more who are at risk of facing the same fate. The question now is how prepared are governments to face this problem and how capable are their medical and scientific sectors to contribute to detecting and treating patients and developing vaccines. On the other hand, as important as the level of preparedness and the national capacities of governments is the concern on the access to detection measures and treatment. This is evident with the recent social media unrest about the so-called VIP testing, whereby standard protocols on testing (i.e. only patients who are exhibiting severe symptoms are tested) have been disregarded in favor of accommodating asymptomatic politicians and high-ranking government officials. People react this way because they perceive a gap in terms of accessibility, that is, even if they want to get tested, they cannot do so unless they show symptoms of possible COVID-19 disease.

Alongside the number of deaths, as the number of confirmed cases increases worldwide, panic, anxiety, and fear control the human psyche Public polls conducted in Canada and the US indicate that the COVID-19 causes a significant psychological impact. Some literature now refers to this as Coronaphobia – the fear of the COVID-19. This mental health concern is said to be caused by the “novelty and the uncertainties about how bad the current outbreak might become.” Notably, health-related fears such as Coronaphobia are also fueled by the “lack of information and misinformation, often aided by sensational popular media headlines and foci” and the perception of one’s vulnerability to succumb to the disease. Their fear, anxiety, and panic are also important determinants of how cooperative they would be in terms of following government regulations and measures to combat the spread of the COVID-19. And so, the medical community is confronted with two health issues: one that targets physical health, and the other that impacts mental health. The latter is more elusive as even virus-free or unaffected populations may succumb to it.     

COVID-19 also threatens food security. Traditional measures such as quarantine, social distancing, closing down of commercial establishments, among others, have direct consequences to the production and distribution of food items. The uncertainty on food production and distribution brought about by these measures causes people, particularly those who have the means, to panic buy or even hoard for food items to last them for weeks or even months. Apart from the change in consumer behavior, the pandemic, more importantly, exacerbates existing food insecurity problems such as hunger, malnutrition, and food shortages in post-conflict situations. In this case, while most portions of the population may be spared from the disease, they are all affected by concerns over food security.

At this point, it is quite clear that the population assumed in the discussion is not homogenous. Those who are at the lower strata of the economic pyramid face an existential threat from the disease, hunger, and lawlessness. On the other hand, people whose needs are beyond the basic commodities and services perceive the virus as a threat to their quality of life, that is, how restrictions in movement affect their lifestyle, work productivity, and education. Therefore, people from different areas, sectors and of different races, gender, and age will be affected differently, and so their behavior and reaction to medical and non-medical interventions will also vary. It is up to policymakers and crisis managers how they would balance the competing interests and needs, and which tradeoff in human security are they willing to take to get through this condition.

3. Risks

Perhaps a significant difference between the COVID-19 pandemic and previous cases is that the former emerged in a time when mis- and disinformation are increasingly becoming difficult to spot. This puts more risk on people’s health, the economy, and the operations of the security sector. Notably, information sharing plays a critical role in containing the spread of the virus. Public engagement and transparency are critical to counter mis- and disinformation. Misinformation about its causes, symptoms, and even treatment may lead people to engage in practices that are not medically safe or otherwise brings complacency to the general public. This increases the risk of spreading the virus.

 

About NDCP-PCEDS

NDCP-PCEDS is a specialized research and training center established at the National Defense College of the Philippines through Department Order 404 dated 18 September 2018. It is mandated to provide policy-relevant research on global strategic affairs to address strategic change and security priorities of the country and to facilitate cooperation and coordination with national, regional, and international organizations working on defense and security issues.

Disclaimer

The opinions and views expressed in this article are those of the author and do not represent the official policy or position of the National Defense College of the Philippines, the Department of National Defense, and the Philippine Government.

 

COVID-19 Research Group of PCEDS 

Dr Gloria Jumamil-Mercado, MNSA – Chairperson and Editor-in-Chief

Mr Rej Cortez Torrecampo – Senior Analyst

Mr John Michael Ojano – Analyst for Policy and Strategy

Ms Glyzel Anne B Sapla – Analyst for Military Operations

Ms Kim Ellise Bartilad – Analyst for Crisis Management

Mr William Vincent Obcemea – Analyst for Global Affairs