This week was marred with those once in favour, falling out of favour. There has been public tension between President Trump and Dr Fauci, with Trump previously tweeting about firing Fauci and now saying that Fauci’s concerns over opening the economy too early, are unacceptable. President Ramaphosa has also had a challenging week, as South African business, which has previously favoured the President, has now united against supporting the severity of the lockdown over fears of economic devastation. Indeed, the maxim of “lives versus livelihoods” has even been challenged by PANDA actuaries, who have calculated the years of life lost under the extreme lockdown to considerably exceed those lost as a direct result of Covid-19. The maxim now in terms of the nature of the economic responses in South Africa has changed to “lives versus lives”.
In order to provide insight into the sometimes contradictory – often illogical and inconsistent – decisions made by the SA Government since the introduction of Lockdown Level Four, we have included an article (commissioned exclusively for Dynasty clients), entitled SA Politics: More of the Same and Newton’s Third Law, authored by our consulting political analyst, Professor Ivor Sarakinsky.
- The Asian Development Bank has calculated that the cost of the coronavirus pandemic could be up to $8.8 trillion, which is almost 10% of global gross domestic product – the cost will depend on how long the outbreak continues and the impact of government responses.
- The Director-General of the World Trade Organisation, Roberto Azevedo, announced that he will resign a year earlier than planned. This only adds to the uncertainty of global trade in the throws of the Covid-19 pandemic.
- Another three million people filed for unemployment claims in the US last week – bringing the total amount of job losses, in the two-month period, up to 36 million.
- Two more medical studies have been published in the British Medical Journal (BMJ), that hydroxychloroquine has no significant effect on the treatment of Covid-19. This was the drug that was touted by President Trump as a potential treatment for the coronavirus.
- President Trump and Dr Anthony Fauci have continued their dispute this week. Dr Fauci, Director of the National Institute of Allergy and Infectious Diseases, warned that a hasty opening of the American economy could have “serious consequences”. President Trump responded that this was ‘’unacceptable”. Follow this link for more.
- The UK economy shrank by 5.8% in March, making it the worst month since record-keeping began in 1997. There are concerns that the numbers for April and May could be even worse because of continued social restrictions.
- Retail sales in the UK fell by 19.1% in April year-on-year. This is the largest fall-off since monitoring began in 1995. Online shopping, however, surged by 60%.
- While other countries have been under lockdown, Swedes have been able to continue shopping, going to work, and dining at restaurants. The downside to the strategy is that the virus has claimed a higher percentage of lives in Sweden than in its neighbouring countries that locked down. As of 10 May 2020, Sweden had about 31 deaths per 100 000, versus Denmark with nine and Norway with four (the U.S. number was 24 per 100 000). But the Swedish economy is expected to shrink by 5.6% in 2020, in comparison to 8.1% for the other nations of the eurozone – trading more disease for less economic damage.
- President Ramaphosa adjusted Level Four restrictions this week and said that the country will likely remain as such until the end of May. Although many details were hazy, some were clear – all online shopping is now available and restrictions on exercise will be loosening soon. The President also highlighted the effectiveness of the lockdown so far, saying that “without the lockdown, at least 80,000 South Africans would have been infected and the death toll would be eight times higher.”
- South Africa’s National Treasury announced that it would table a new budget on 24 June 2020. This budget will include the plans for the R500 billion stimulus package aimed at easing the economic impact of the coronavirus outbreak. Quote: “A revised fiscal framework will also be presented, to account for substantial revenue losses emanating from the economic shock of the pandemic and subsequent lockdown.”
- Business has broken with government – South Africa’s biggest companies have united, under the banner B4SA, to warn the government that the economy must return to full activity as soon as possible. Business has stated that the lockdown is deeply flawed, and they fear it may lead to economic ruin.
- Follow this link for an opinion piece entitled, Cigarettes and the Smoking Gun, written by Professor Ivor Sarakinsky and published in the Daily Maverick, which details the flip-flop on the smoking ban during the lockdown, and the broader picture this paints of President Ramaphosa’s grasp on power.