5 countries that will recover first after the COVID-19 pandemic

In early April, the Austrian authorities were the first in Europe to announce plans to phase out the restrictive measures associated with the crisis surrounding coronavirus infection. It is unclear who else can follow the example of Austria, but it is obvious that a return to normal will not be easy, writes Air force.

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Experts have already begun to predict what it will look like when the coronavirus can be curbed, and which states will be the first to emerge from the economic recession.

The COVID-19 pandemic has added an unprecedented high element of unpredictability to the global economy. States, trying to fight the infection and stabilize the markets, are taking serious measures, including financial intervention,

The 10 most sustainable economies, according to the Economic Security Index 2019:

1 Norway
2 Denmark
3 Switzerland
4. Germany
5 Finland
6 Sweden
7. Luxembourg
8. Austria
9. Central US
10. United Kingdom

Full list - here.

Although the victory over the virus is not yet visible, and the priority is the solution of pressing health problems and maintaining at least some economic stability, experts are already trying to look into the future and understand which countries will be the first to restart their economies.

To better understand their forecasts, the BBC turned to the 2019 Economic Security Index compiled by insurance company FM Global.

The Index ranks 130 countries based on the resilience of their business climate and ability to recover. The assessments are based on factors such as political stability, the success of corporate governance, conditions for the emergence of risks, the maturity of the logistics mechanisms of trade chains and the transparency of the business environment.

Comparing the rating of a country with its initial response to the pandemic, we identified states that are highly likely to maintain stability and economic stability throughout the crisis.

Then we talked with residents of these countries and experts to find out how they cope with the situation and what they expect from the near future.

Denmark

The country ranks second in the Index, with high scores for control over the supply chain and low corruption in government.

At the beginning of the crisis, the country's government acted decisively: it quickly introduced social distancing, closed schools and secondary private enterprises on March 11, and forbade entry for all foreigners on March 14 (even though there were only a few cases of coronavirus infection then).

Such measures have already proven their effectiveness.

“The incidence of common flu has dropped by 70% compared to last year, which can be seen as a good indicator of the effectiveness of the steps taken by the government,” says Rasmus Christiansen, managing partner at Copenhagen-based travel agency Pissup Tours.

“At first I was skeptical about them, but after seeing how many states took the same path. Now I think that our government did everything right.”

The Danes are accustomed to trusting their authorities and are always ready to unite for a common cause - and this has increased the effectiveness of the measures taken.

“The new buzzword in Danish media and social media right now is samfundssind (which roughly translates to “civic feeling” or “civic duty”), and most Danes feel a moral obligation to society, believing that something should be sacrificed for the sake of the health of the whole society " says Christiansen.

“No one wants to be accused of acting in ways that endanger the lives of older people simply because they are unable to give up their usual comforts.”

However, this does not mean that everything went smoothly. Say, Christiansen’s tourism business revenues plummeted. And although he speaks with gratitude about the financial assistance of the state (including partial compensation of salaries to employees), the rules for this assistance and its implementation have not yet been fully developed, which has already led to dismissals and uncertainty.

However, the Danish government's measures (paying 90% of wages to hourly workers and 75% to salaried workers) are already recognized as a model for the rest of the world. These measures seem to freeze the economy until better times.

However, the Danish model is not cheap; it can cost the country up to 13% of GDP.

In addition, the Danes understand that this is a global crisis, and the stability of their economy, no doubt, depends on how the rest of the world will cope with the crisis and how others will abide by the principles of free trade.

“Denmark may be able to avoid more serious consequences and gain a comparative advantage,” Christiansen said.

In fact, as Bloomberg reports, the country is talking about easing some restrictions by Easter - of course, this depends on how successfully the pandemic will be contained in the future.

“Denmark has a well-developed pharmaceutical industry, which can be an advantage,” says Christiansen. “However, I will not feel proud of my country if we start profiting from the misfortunes of other countries.”

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Singapore

Singapore's ranking (21st in the Economic Security Index) is quite high due to its strong economy, minimal political risks, excellent infrastructure and low level of corruption.

The country also quickly introduced measures to curb the spread of the coronavirus. Here the incidence rate growth curve is one of the flattest in the world.

“We trust our government, every step they take in this crisis is quite transparent,” said local resident Constance Tan, a data analyst at Konigle. “As a rule, when the government introduces some measures, we comply with them.”

However, there are those who violate the rules of self-isolation. Passports and work passes are taken from them.

“But in general, we work together, we don’t have to worry about social rebellion, or people dying on the streets, or economic disruption,” Tan says.

Singapore is a small country, and the way out of the crisis will depend on the recovery of the global economy, but its residents believe in a bright future for their nation.

“Like everyone else, I believe we will emerge stronger through this crisis,” says Singaporean Justin Fong. “Surely this will lead to the introduction of new technologies, then this will open up new prospects for Singaporeans.”

Many companies quickly adapted to new conditions and established work from home for their employees. And the government has released the Trace Together mobile app, which helps track the spread of the virus.

U.S.

To more accurately reflect the country's wide geographical coverage, the Index divided it into western, central and eastern regions. In general, all three occupy fairly high positions in the ranking (9th, 11th and 22nd places, respectively).

Containing the spread of the virus has proven particularly difficult in megacities like New York. The unemployment rate is already at record levels (6,6 million at the end of March), largely due to the fact that in more than half of the states everything is closed, in particular restaurants, retail establishments and other businesses that rely on customers coming in from the street.

But the US authorities quickly took incentive measures to stabilize the economy (a $ 2 trillion aid package) and introduced social distancing. Apparently, this had a certain effect. But in the end, it should mitigate the consequences of the pandemic and allow faster restoration of normal economic life.

Experts Goldman Sachs and Morgan Stanley predict a V-shaped development in the economy - first a sharp drop, and then a very quick recovery in the second half of the year.

McKinsey consultants are more restrained, but still optimistic.

The state of the US economy is important for all other countries, since it accounts for almost a quarter of world GDP. Therefore, the recovery of the global economy largely depends on how the United States handles this.

“In general, the US economy is in a better position to recover from major crises (...) compared to other economies. The population here is, on average, younger and more mobile than in the rest of the world, and labor market constraints tend to be small, which helps the rapid redistribution of labor,” says Eric Sims, professor of economics at the private University of Notre Dame (USA).

“In the shorter term, we can say that the US Federal Reserve and the Bank of England (they have not yet resorted to a policy of negative interest rates) have a little more room for maneuver than other central banks - say, the ECB or the Bank of England Japan."

To accelerate a return to normalcy, the US Presidential Administration proposed dividing the country into districts, highlighting those less affected by the virus and ready for a faster recovery of economic activity.

“I think these measures go a long way toward creating the necessary conditions for a strong recovery,” said Peter Earl, a fellow at the American Institute for Economic Research, a nonprofit academic think tank.

“We need the freest possible movement of money, goods, services, labor reserves and ideas - not only within the country, but throughout the world,” he emphasizes.

The lack of a universal health system in the United States has already been criticized in the days of the crisis, and this problem will be resolved if the country wants to become more protected from such pandemics in the future.

“I think in the end the whole world (including the United States) will come out of this crisis stronger. But it all depends on what lessons we learn,” emphasizes Michael Merrill, an economist and labor market historian at the Rutgers School of Management and Labor Relations (USA).

“We will have to invest in new forms of public health and create a sustainable model of social protection and institutional viability if we are to return to the society we lived in just a month ago.”

Rwanda

Thanks to recent progress in corporate governance, Rwanda has significantly improved its ranking in the Index in recent years, jumping 35 places to become the 77th most resilient economy in the world (it ranks fourth among African countries).

But the most important thing is that Rwanda has invaluable experience in dealing with a similar and even more deadly virus - the country managed to prevent the spread of Ebola fever in 2019, when there was an outbreak of this disease in the neighboring Democratic Republic of the Congo.

From universal health care to temperature checks at border crossings to the use of drones to deliver medicine, Rwanda appears well positioned to maintain stability throughout the crisis, especially when compared to its regional neighbors.

“A lot of international students like me have stayed here because we are confident that the Rwandan government will handle the situation much better than our home countries,” says Garnett Achieng, digital content manager at Baobab Consulting and a student at the African Management University in Kigali, originally from Kenya.

“For foreign students here, there is only one reason to worry - we are not worried about ourselves, but about families and relatives living at home in other African countries.”

Among sub-Saharan African countries, Rwanda was the first to introduce full quarantine. They deliver free food to the most vulnerable Rwandans who find themselves in isolation.

And while the tourism industry is expected to be hit hard (Rwanda is a popular destination for international conferences and exhibitions), Garnett Achieng hopes the country will see relatively few casualties from the virus, allowing for a quick return to normalcy.

On the subject: Different approaches: how to check for coronavirus in the USA and other countries of the world

New Zealand

In the Index mentioned above, New Zealand ranks 12th, with particularly high scores in the areas of corporate governance and procurement.

The authorities of this country also quickly responded to the pandemic - on March 19 they closed the borders to foreign travelers, and on March 25 they banned the work of enterprises from non-essential sectors of economic activity.

“As an island nation, it is easier for us to control the borders, where the infection mainly comes from. So closing borders makes sense, says Auckland resident Shamubil Iqub, an economist at consultancy Sense Partners. "New Zealand's response has been bold and decisive compared to other countries."

Strict measures are already bearing fruit: if they are followed in the next few weeks, the infection will be reduced to zero, and the country, as noted in the Guardian newspaper report, will be one of the first to return to normal life successfully.

Exports and tourism are the main components of the country's economy, so New Zealand will have to face certain difficulties in the near future. But that's not necessarily a bad thing.

“While we're isolated, we'll have time to recalibrate,” says Dunedin resident Ron Bull, director of curriculum development at the country's oldest university, Otago Polytechnic. “We were already concerned about the impact of unorganized tourism on the environment, and the current situation will give us time to think carefully about what is more important to us - tourist dollars or our environment.”

In general, the country has excellent chances for a stable economic recovery - the public debt is small, it is possible to use the saturation of the economy with the money supply and at the same time keep interest rates low.

“The most important thing is that New Zealand remains a country where trust in government is relatively high,” says Shamubil Iqub. “This is a good foundation for recovery as our health care and economy suffer the biggest shock in generations.”

Bull agrees that the country is likely to emerge from the crisis stronger than before: “Just as in a large family living in one house, everyone knows everything about each other, so now we need to sit down as a whole New Zealand family and decide who we want to be. And make decisions that will make us stronger and better.”

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