The analisys of how different countries have dealt with the pandemic covid19.

The authors of the Vision Paper are Maria Costanza Cau e Giuseppe Cipolletta.

With nearly two million deaths to date from Coronavirus Disease 2019 (COVID19) and the largest economic shock the world has ever experienced since 1945 , the pandemic crisis has been compared to the WORLD WARS that came to define the 20th century.

After those global conflicts, new “world orders” were crafted. The one conceived in 1919 after the first conflict around the “League of Nations”, was nonetheless less successful than the one designed in 1948, which culminated in the foundation of the UN, the IMF, NATO and, ultimately, in the European continent with the European Economic Community (EEC): the embryo of what would become the modern European Union. It is therefore not too far-fetched to foretell that the annus horribilis will be followed by a significant adjustment of geopolitical equilibria.

In fact, according to Michael Lind , the American century began exactly in 1920, at the end of a global conflict which largely spared the USA and from another terrible epidemic (“the Spanish Flu”) whose vehicle were indeed the very soldiers who were dying on European battlefields. A century later, it is possible and desirable that a brand new century is about to begin: one that will see a shift in the center of the worlds towards the EAST.

The costs of the pandemic are, indeed, so unevenly distributed that they may produce a permanent change in the geopolitical equilibria to which we were all accustomed. Thus, we should ask ourselves “Who are the winners and losers of the first global war of the 21st century?”

Starting from the idea that the countries that will eventually minimize the Covid-19-related costs are the ones that will be better placed in shaping a post-pandemic world, Vision’s attempt is to assess the distribution of such economic and health costs.

THE PARADOX OF THE WEST

Who is losing the PANDEMIC war? If we look at the most significant numbers related to Covid-19 – distribution of COVID-19 cases and deaths (as reported by the World Health Organization) – It seems that North America (USA and Canada) and the European Union (considering the EU28 including the UK until 31st Dec 2020) bear a much larger share of their contribution to the world population.

Figure 1 – Distribution of World Covid19 cases, deaths (as of 31st Dec 2020), population, Health Expenditure and GDP (2019)

 

Source: VISION on WHO and World Bank data

Almost 50% of health costs are incurred by slightly more than 10% of the world’s population living in Europe and North America. The picture, however, becomes more striking when one considers that these regions constitute the part of the world which has been dominating the world scene over the past few centuries and which still accounts for almost half of the world GDP.

More surprising is the fact that the EU and North America account for almost two- thirds of global expenditure on healthcare, which points to a major problem of inefficiency that the pandemic has exposed..

COMPARING COUNTRIES BY HEALTH RESILIENCE

Who is then the winner? The following graph shows data related to the the world’s “big” countries, defining as “big countries” all countries with either more than 50 million people or with a GDP higher than USD 200 billion GDP (as for the WORLD BANK data in 2019). We have thus attempted to construct an indicator of health resilience by comparing our sample countries’ pandemic-related health costs with their respective public healthcare expenditure per head (3).

In theory, the development and robustness of a healthcare system does have an impact on minimizing deaths, as this can be considered as the tragic bottom line of the PANDEMIC.

A system which is capable to identify and test cases before they require hospitalization is certainly better equipped to reduce the number of infections; likewise, once the infection occurs, the quality of treatment certainly pays a role to avoid that the outcome is fatal. The graph, however, seems to say that correlation between higher expenditure on health and capability to contain COVID19 is poor.

Figure 2 – Major Countries of the WORLD (with a GDP higher than 200 billion USD or with a population larger than 50 million people plus entire EU and RCEP) by capability to contain COVID-19 health costs (number of people in thousand per one COVID-19 casualty, 2020 – vertical axis, logarithmic scale) and Government Health Expenditure (in USD PPP, per head, 2019 – horizontal axis, logarithmic scale) (as 21 March 2021)

Source: VISION on WHO and World BANK data

Correlation between government expenditure and resilience to COVID is – 0.24, when we measured it by deaths in proportion to population; it becomes even more negative when we measure it by using the percentage of population being infected.

In general, countries’ differences in both government expenditure and COVID19 performances are so large that we had to use a logarithmic scale: USA spend per person more than one hundred times more than Pakistan (and almost five times more than some of the EU nations); Belgium has recorded almost one thousand more deaths per person than China.

The differences are, therefore, so large that they seem to resist the very arguments about poor reliability of official reports.

Countries in the lower left quadrant are the ones whose governments spend more on healthcare and which were hit more badly by COVID-19: the quadrant is heavily populated by European and North American countries. While Brazil, Russia, Turkey, South Africa are also there, they are closer to the lower right quadrant group. It is also evident, however, that there are significant differences even within the bloc with countries like Finland doing much better than their peers.

Eight out of the eleven countries which did better overall (more than 50.000 people for each COVID-19 death) are from Asia Pacific: Cambodia, Laos PDR, China (and Taiwan) New Zealand, Thailand, Brunei Darussalam, Vietnam and Singapore.

We also calculated an overall indicator of efficiency by comparing the health costs from COVID19 (defined as deaths from Covid-19) with overall government expenditure on health care: remarkably, the worst performing Asian – Pacific country (namely Australia with a score of 5,58) seems more than twice as efficient as the best performing EU/ North American country (namely, ESTONIA with 0,91) . The US is, of course, by far the worst, considering that they outspend any other country: this is in line with what we find when we look at indicators such as life expectancy relative to other countries.

Nevertheless, one factor we still need to control for is the different percentage of elderly people in our sample countries, as this can have a significant impact on mortality rate. The good performance of Japan which ranks first for life expectancy, as well as the one of New Zealand, South Korea and Australia, appear to say that they are doing better than Western countries with similar demography.

African countries also seem to fare relatively well, although this may reflect the climate conditions that worked against the virus. African advantage does, in fact, disappear if we add economic costs to the picture.

ASSESSING THE RESISTANCE TO ECONOMIC SHOCKS

As a second step, we have tried to understand how health costs (again we considered cases as tragic “bottom line” of the pandemic) associated itself with the drop in economic activity.

Figure 3 – Major Countries of the WORLD (more than 200 billion USD or more than 50 million people plus entire EU and RCEP) by capability to contain COVID-19 health costs (number of people per each COVID-19 case, 2021 – vertical axis, logarithmic scale) and 2020-2021 drop in GDP (as difference between IMF forecast as of OCT 2019 and OCT 2020) (as 21 March 2021)

Source: VISION on WHO and World BANK data

The picture is certainly more scattered than the previous one, and yet four out of the six less damaged economies are, again, from Asia Pacific.

The US and Europe (especially Germany and Nordic countries) appear relatively less vulnerable. Spain appears to have been the worst hit.

THE OVERALL PICTURE 

Last we tried to combine health with economic resilience by creating and overall Covid19 world's ranking. 

Table 1 - Vision Covid19 related resilience ranking

China, Singapore, Japan, South Korea and Vietnam occupy the first five positions, whereas eight of the last ten are from the EU. The USA, which ranks poorly on minimizing damages, does much better as far as economic resilience.

FURTHER WORK TO BE DONE 

The data will certainly need to be updated over the next few months once the impact of vaccines will come into the picture. Finally, the impact on inequalities and social cohesion will also need to be taken in consideration.

BIBILIOGRAPHY

Baud, D., Qi, X., Nielsen-Saines, K., Musso, D., Pomar, L., & Favre, G. (2020). Real estimates of mortality following COVID-19 infection. The Lancet Infectious Diseases.

International Monetary Fund, World Outlook, October 2020

International Monetary Fund, World Outlook, October 2019

Jung, Sung-mok, et al. "Real-time estimation of the risk of death from novel coronavirus (COVID-19) infection: Inference using exported cases." Journal of clinical medicine 9.2 (2020): 523

Wu, J.T., Leung, K., Bushman, M. et al. Estimating clinical severity of COVID-19 from the transmission dynamics in Wuhan, China. Nat Med (2020). https://doi.org/10.1038/s41591-020-0822-7

 

(1) The drop will be of 8.2% of world GDP in 2020, if we proxy the impact as the difference between January 2020 and October 2020 International Monetary Fund’s projections for global growth- IMF, World Economic Outlook.

(2) Land of Promise: An Economic History of the United States. (2012) HarperCollins

(3) We are thus not considering private expenses like insurance or out-of-pocket from individuals.

(4) The indicator is, thus, equal to the ratio between population over COVID19 deaths, and government healthcare per head

(5) This is even more true if we consider DALE: disease adjusted life expectancy.