Covid-19 and the Day After
Covid-19 and the Day After
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Author : Rachel Poole
Date : April 8, 2021
Here is our take on the articles summarized below:
While a flurry of positive vaccine news, declining Covid-19 case numbers, and improved economic forecasts have created optimism for a return to “normal”, we are not out of the woods yet. New Covid-19 variants threaten to derail the globe’s recovery from the pandemic, especially in places where vaccine distribution has been slow, or non-existent. Many emerging economies have been hit much harder than developed economies and will struggle to regain momentum especially if vaccines are not distributed equitably. As the world focuses its attention on the pandemic recovery, critical conflicts, like Russia’s aggression against Ukraine, are flying under the radar.
Pandemic Will Leave Little Lingering Damage for Advanced Economies, Says IMF
Chris Giles, Financial Times
Global Economy Poised to Expand Faster, Buoyed by Vaccinations
Karen Dynan, Peterson Institute for International Economics
A recent report by the International Monetary Fund (IMF) indicates that the fallout from the coronavirus-induced recession will be far less than originally anticipated, and an order of magnitude less than that of the 2008-09 financial crisis. Despite the likely success of advanced economies in managing the crisis, the same cannot be said of emerging economies (with the exception of China), especially those with limited vaccine access, weak public finances, and tourism-dependent economies. This hit is expected to depress output through 2024 by 8% compared to pre-pandemic projections, and is only exacerbated by the disproportionate interruption of schooling in counties with limited access to online capabilities. On the other hand, developed economies are expected to see a strong rebound, especially in the US. US GDP is forecasted to rise by 6 percent year-over-year in 2021, and an additional 3½ percent in 2022. The labor market has also recovered from its initial shock, but will likely lag the overall economic recovery as prime-age labor force participation has shown no improvement since mid-2020. Inflation concerns from demand repression and fiscal stimulus remain, especially given the historically unique circumstances of the pandemic. While the Fed has maintained that it does not intend to raise its policy rate in the near term, should inflation begin to snowball it may be forced to step in sooner than anticipated. While the recovery seems to be in full swing, the likely plight of emerging economies and the hidden reefs of inflation and unemployment will be major challenges in the near term.
Virus Variants Threaten to Draw Out the Pandemic, Scientists Say
Apoorva Mandavilli and Benjamin Mueller, The New York Times
While Covid-19 cases, hospitalizations, and deaths in the US have declined steeply from their highs, much in part to the accelerating vaccine rollout, virus variants are posing a threat to the nation’s recovery. The rise of these new variants, which are more contagious and in some cases more deadly, has been “camouflaged” by positive vaccine news and falling rates of infection overall, causing many states to prematurely relax Covid-19 restrictions. Health officials say there is an urgent need to track these new variants and continue taking precautions. The B.1.1.7 variant has devastated parts of Europe and is now exponentially rising in the US. As of March 14th, this variant accounted for 27% of new cases nationwide. The B.1.1.7 is about 60% more contagious and 67% more deadly, but of most concern its ability to blunt the immune response. Though the US has had a robust vaccine rollout, (with 31% of Americans having received a single dose of a vaccine and 17% having full protection), the majority of the population is still susceptible to the virus. In Europe, the B.1.1.7 variant and others, alongside a slow vaccine rollout, have caused a third wave of the virus. Many scientists believe variants of the coronavirus will be around for quite a while, requiring us to get a Covid-19 shot annually. However, health professionals say the best way to deal with the emergence of dangerous variants is to immunize as many people in the world as possible, as quickly as possible: “If significant pockets of the globe remain unprotected, the virus will continue to evolve in dangerous new ways.”
How a Chip Shortage Snarled Everything From Phones to Cars
Ian King, Debby Wu, and Demetrios Pogkas; Bloomberg
Greater-than-anticipated semiconductor demand has created a near-term supply shortage as chip fabricators have been unable to keep up with the exponential growth of smart technology. Samsung called this shortage a “serious imbalance,” with an increasing number of industries fearing a crunch. Semiconductor sales have been on the rise for over a decade, but saw a large spike in 2017. Producers have so far been able to keep up with demand, but their capacity to scale to the growth of applications (for instance, chips are expected to comprise 45% of a car’s manufacturing cost by 2030) may be limited by a lack of high-technology fabricators. The costs of manufacturing and R&D have grown exponentially in the past decade, increasing the barriers to entry and placing more responsibility in the hands of industry leaders. Taiwan Semiconductors (TSMC) alone has raised its capital expenditures estimates by as much as 63%. Nearly 91% of chipmaking occurs in Asia (with TSMC and Samsung holding the lion’s share), exposing the sector to excess geopolitical risk and at times bottleneck production. Cutting-edge technologies (such as photolithography) are constrained to the select few companies with the capabilities to bring them to market. With semiconductor demand only to increase as the world relies increasingly on smart technology, the current shortage may be an indicator of critical supply chain weaknesses.
How Putin made the international media his unwitting accomplices
Peter Dickinson, Atlantic Council
In the midst of the pandemic, many international news agencies have fallen victim to Russian President Vladimir Putin’s disinformation campaign, particularly when it comes to the conflict with Ukraine. Russia has strategically designed Moscow’s Ukraine offensive to be a confusing combination of forces that “create a veil of plausible deniability” and disguise what is truly a war instigated by Russia. A report published by Reuters on March 31st featured the headline “Kremlin says fears Ukrainian side could restart civil war in eastern Ukraine”: a perfect example of Russia’s disinformation campaign wrapped up into one sentence. The headline describes exactly what Russia has wanted the world to believe: a) the conflict in eastern Ukraine is a civil war, b) Ukraine is responsible for any escalations in violence, and c) Russia is just a concerned bystander. Russia has been able to exploit journalistic neutrality and journalism’s obligation to inform. In trying to protect such rules, news agencies have enabled Russia’s aggression and distorted the conflict in Ukraine. In reality, there is plenty of undeniable evidence of Russia’s military involvement and aggression in Ukraine over the last 7 years. The author of this article urges that accurate reporting of the conflict is needed now more than ever as Russian military forces have now concentrated on the Ukrainian border and government officials have made statements about the possible “destruction of Ukraine.”
