Open the economy, but lock down the schools - News24

18 April 2020 - The manner in which the present South African lockdown has been enforced is likely to worsen the broader socio-economic impact of the Covid-19 pandemic on the country.

Frans Cronje

The manner in which the present South African lockdown has been enforced is likely to worsen the broader socio-economic impact of the Covid-19 pandemic on the country.

Going beyond the amended regulations announced this week, many small and medium enterprises should immediately be able to resume business under the conditions we suggest below. But if this economic reopening is to succeed, the government should now take a firm decision that schools will be locked down at least until September. 

Poor countries cannot afford lockdowns and, because of the state capture decade and subsequent squandering of the reform window, South Africa is simply too poor to persist with such a policy.

This is not 2008, when South Africa entered the financial crisis era on the back of four years that saw the economy average growth rates of above 5%, a budget surplus, and less than half the government debt burden of today.

As a consequence, it was well-positioned to withstand the buffeting and, in the two-year aftermath of that crisis, the number of unemployed South Africans (not the unemployment rate) increased by just 3%. Nor, of course, did that crisis see the shutdown of much of the local economy.

We have estimated that in dollar terms the US is making available 100 times as much stimulus per capita as South Africa is. Even if our estimate is out tenfold, South Africa is nowhere near the stimulus league of more successful and prosperous economies. As a consequence, the outlook for jobs and small businesses is stacking up to be cataclysmic.

Some staid and sensible economists are pencilling in an economic contraction in the region of -10%. Our own estimates are not yet at that level, but if the lockdown is not lifted we will get there.

We have estimated that if just 20% of the people who are now locked down, away from their jobs, do not return to work (while remaining economically active), the unemployment rate will increase from the present roughly 29% to nearer 37%.

Given the already rising tide of anti-government protest action over the past decade, that is a recipe for substantial long-term disorder.    

The South African government should never have extended the lockdown in its present form and needs to move with urgency to reopen much of the economy before the extended lockdown expires. The first step to such a reopening is to get rid of the distinction between essential and other businesses.

The fact that any business is in operation shows that it is essential. The distinction between essential and other businesses needs to be replaced with a new distinction between those enterprises that can operate under sensible physical distancing protocols without posing a grave threat to public health, and those whose operations would pose such a threat.

Enterprises that concentrate large numbers of people in close proximity to one another for periods of time, especially where those people make use of public transport networks, would qualify as the latter and their reopening should be considered on a case-by-case, and sector-by-sector basis.

However, businesses that do not crowd large groups of people together should be able to reopen immediately on the condition of maintaining pragmatic physical distancing protocols.

My colleagues are currently working on which types of businesses these would be, but they will include small construction firms, most retailers, much of the food and beverage industry, many small-scale manufacturers and industrial service providers, and much of the services economy, such as tyre shops, print shops, and so on.

Likewise, people should be free to move outside of their homes, take exercise, walk dogs, or whatever they please, as long as they maintain physical distancing.      

But there is one sector of our society that should be kept closed at least until spring, and that is South Africa’s schools. This is particularly important if the economy is to reopen successfully. On any given school day, South Africa’s schools concentrate almost 13 million children in close proximity to one another for hours on end.

Those children then commute across towns and cities for many millions of kilometres a day. If you want a petri dish and distribution network to accelerate the Covid-19 pandemic through South Africa’s towns and cities, then schools are it. 

Exacerbating the risk is that children may be virus carriers - but, because they show limited symptoms, this may not be known until they have infected their peers. Those peers will then take the virus back into their homes – and, in South Africa’s case, the effects could greatly exacerbate the damage that HIV and Aids has wrought to family structures in the country.

Roughly 20% of households are headed by people aged 60 and above and 5% of all households are skip generation households in which a grandparent is the main caregiver of younger children. Roughly 45% percent of children live with only one parent.

These households are all acutely vulnerable to children bringing infections home, one of the consequences of which would be to leave children without caregivers. Already, 20% of all children live in households that do not feature their biological parents.

As for the argument that schools should be opened in order to accelerate the spread of the virus and deliver a degree of herd immunity, that might work in societies with different family structures and excellent healthcare services, but in South Africa the same experiment would be irresponsible. Much safer would be to keep children in their neighbourhoods as far as a possible, and within the town and city blocks they live on. That way, testing and tracing teams will find it much easier to zero in on areas that threaten a mass explosion of infections.

As for education, it should not be necessary for children to be sent to schools in order to learn. Excellent online learning and teaching tools are available. South Africa has good data, television and cellular coverage.

If data costs, especially for people accessing online learning tools in poorer communities, could be slashed, an army of teachers and teaching volunteers could set up small localised learning groups that would help the great majority of South African pupils keep up with the curriculum – particularly if it were shortened and more focused, as has been suggested to us.

If schools are kept closed until September, three months (one month was already dedicated to holidays) will have been lost that would have to be made up into the end of January 2021.

The one exception would be to allow only the matric class to return to school (roughly 5% of all schoolchildren are in matric), so that they might write exams and graduate on time. Other grades can catch up on anything they have missed through what remains of their school careers.

Why September? By then, South Africa’s first great infection peak will have passed. The weather will get warmer and more humid, which the virus appears not to like. Treatment protocols will have improved.

We will have a better idea of the actual case fatality rate of the virus in South Africa. But, most importantly, testing and tracing infrastructure could by then have become so good that reopening schools will pose a far lesser risk to public health than is the case now.

Lastly, because we can afford to suspend normal schooling, given the consequences that might ensue if we do not, the risk-reward equation on schools is strongly in favour of caution. 

But, on the broader economy we cannot wait, and a great moral push must now be made to convince the government to open the economy for all enterprises that can function, while maintaining sensible physical distancing protocols and not concentrating large masses of people for extended periods.

There are of course risks in doing so, but these will be very much lessened if a firm decision is taken now to invest in the learning tools, data and volunteers to tide the education system over until September. Because if schools reopen at the same time as the economic lockdown is partially released, and then trigger an infection surge, policymakers may decide they have no choice but to adopt blanket shutdowns again.

And, if that happens, many businesses and quite possibly millions of workers may lose their livelihoods for years to come. 

Frans Cronje is an analyst. He is CEO of the IRR and directs the Centre For Risk Analysis (CRA).

https://www.news24.com/Columnists/GuestColumn/opinion-open-the-economy-but-lock-down-the-schools-20200418

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