Economy Politics

Experts discuss how to lift lockdown restrictions

2nd April 2020

By Ignacio Portes

Experts discuss how to lift lockdown restrictions

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President Alberto Fernández’s lockdown is largely backed by the Argentine population, even with the difficulties it has brought with it. But his medical advisers are already agreeing about the need to move on to a less restrictive phase, in which some prohibitions are lifted, as the amount of new cases has not shown signs of spiraling out of control so far.

“We will have to make changes to the lockdown because people need to work,” Daniel Stamboulian, an infectious disease expert — whose Stamboulian Center formed many of the President’s advisers on the matter — said yesterday.

“(The lockdown) is the best option we have to avoid a high peak of cases. (…) But commercial activities that don’t create massive risks could start coming back. Construction, which can be done in open spaces by young, fit people; restaurants if they can maintain a reasonable distance between clients; or industry if workers don’t need to be too close to each other,” Omar Sued, an expert on Fernández COVID-19 advising team, told The Essential.

With only two weeks having passed since the country went into full lockdown, the President’s advisers agree that it is still too early to be sure that the plan is working well, as infected people can remain asymptomatic for roughly that same period. But plans to gradually scale down the restrictions after April 13 are already under discussion.

The Hammer and the Dance

Fernández’s advisory team is following the guidelines sketched out in Tomás Pueyo’s widely circulated Medium post known as “The Hammer and the Dance”.

Tomás Pueyo's "Hammer and Dance" approach to fighting the virus has been adopted by Argentina

Pueyo’s policy guideline argued that, given the highly contagious nature of the disease and the burden it could rapidly place on countries’ healthcare systems, leaders should opt for a drastic suppression approach as soon as the first cases are detected, ordering heavy social distancing and mandating people to stay home as much as possible.

This initial policy response is what’s known as “The Hammer”, due to the vehement changes it proposes to rapidly flatten the contagion curve, buying countries time to understand the problem and ready their healthcare systems against it.

That hammer approach proved pivotal in turning around the destiny of China, which had initially dismissed the need for drastic measures, with transmission rates skyrocketing as a result. Since Chinese authorities ordered a full lockdown of Hubei province — where the pandemic began — and massively limited circulation elsewhere in the country, the average COVID-19 patient started infecting less than one person per capita, making the amount of new cases grind to a halt.

Fernández bought into the hammer approach shortly after it was presented to him. And he had the additional advantage of getting the first cases in the country weeks after China, Europe or the US. As a consequence, the damage in Argentina has so far been much smaller.

If the trend continues, the country will be able to move on to the next phase of Pueyo’s recommended approach: The Dance.

Phase two

After an initial three-to-seven weeks of the Hammer, this approach argues, countries will be able to move into the Dance, which should last much longer but allow for more freedom.

“I call the months-long period between the Hammer and a vaccine or effective treatment the Dance because it won’t be a period during which measures are always the same harsh ones. Some regions will see outbreaks again, others won’t for long periods of time. Depending on how cases evolve, we will need to tighten up social distancing measures or we will be able to release them,” Pueyo says.

As Fernández extended the lockdown last week to last until April 13, Argentina will have totaled 3 weeks and 1/2 of country-wide quarantine by the time the decision on whether to extend it or begin to relax it needs be made.

The exact date of phase two will be decided based on how the curve looks like in the coming days and weeks. And even then, many precautions will remain.

“We know we will have to lift it for economic reasons, to allow the groups that live off their work on a day-to-day basis to have an income, but the main aspects of the lockdown will remain. Risky groups of people will remain on paid leave, and large gatherings will continue to be discouraged,” Sued said.

Asked if some new measures such as taking people’s temperature in train stations or mandating the use of masks in public spaces could be added for this second phase, Sued answered this could be a possibility, but did not confirm any new measures in particular.

Specialists have also discussed the possibility of allowing more freedoms in regions that have seen no cases or a very small amount, while places such as Buenos Aires city or Chaco province, where community spread has been widely reported, could see the lockdown continue in full force for months.

Business rebellion

Even though the Hammer/Dance approach looks to minimize health and economic damage simultaneously (as attacking the virus quickly at first allows for a quicker economic recovery afterwards, as countries who refused to go for a full lockdown at first are now finding out), the economic costs of the pandemic will still be inescapable. And the conflict over how to pay for the crisis is now starting to rear its head.

Following an announcement from Techint, an engineering firm owned by the richest person in Argentina, that it would fire more than 1,000 construction workers, Fernández responded with harsh words.

“What could happen to a company that sees work slow down a little bit for a month? They should earn a bit less,” the President said. “You have won so much money in your life, you have a fortune that puts you among the richest people in the world; brother, collaborate with those who made your firm what it is during these times,” Fernández complained. (The President would then go on to ban firings and suspensions without cause for the next 60 days, addressing the emergency.)

But although Fernández message was tacitly addressed at Techint’s owners, many Argentines struggling with their businesses took it personally. The response was a protest calling for politicians to earn less as well, sharing the burden of the crisis, in line with what other leaders such as Uruguay’s president Luis Lacalle Pou have decreed.

Every day since Monday, March 30, Buenos Aires city has seen a section of its populace banging pots and pans from their balconies at 9:30 PM to make those demands heard, in a protest which took Fernández by surprise amid his recent surge in popularity.

House of Representatives head Sergio Massa was quick to respond, announcing early on Tuesday that 200 million pesos in lawmakers’ spending would be saved and destined towards hospitals fighting the crisis.

Punishing recession

When seen against the size of the budget, saving 200 million pesos is no more than a drop in the ocean. But a larger protest looms beneath the original demand: that of the upper-middle classes who work in business or as career professionals, and who feel life is being squeezed out of their sectors by a country that can only distribute a shrinking pie but has failed to grow it for many years now.

The government knows things will get worse this year, with a two-digit recession now not seen as impossible. For the moment, it has prioritized the most desperate in the labor market, like the self-employed or unregistered workers.

According to reports, however, it is also readying a relief program for businesses that have monthly payrolls to maintain, struggling as they see their income plummet.

But even though this might address some of the most immediate business needs, the crisis will eventually expose Argentina’s absolute lack of a war chest.

The inevitable round of money printing over the coming months might not result in an immediate spike in inflation, experts agree, as the recession will have a deflationary aspect to it. But one way or another, Fernández will have a massive economic crisis on his hands even if he hits the coronavirus nail on the head with the Hammer and performs the Dance after that to perfection.

Ignacio Portes

Ignacio Portes is The Essential's General Editor. Former Economy editor at the Buenos Aires Herald, he has also written for publications such as Naked Capitalism, NSFWCorp and Revista Debate.