COVID-19 International Developments: Daily Scan, May 1, 2020
Prerna Gandhi, Associate Fellow, VIF
Flagship US medical academy backs EU efforts for global virus response

Victor Dzau, National Academy of Medicine president, appealed to Ursula von der Leyen, his European Commission counterpart, to boost global development and equitable distribution of fast and affordable testing, treatment and vaccines for Covid-19. Prof. Dzau said his approach to Ms von der Leyen was spurred by conversations between himself and other international members of the Global Preparedness Monitoring Board, an independent body convened by the WHO and World Bank in 2018 to prepare for global health crises. The effort by the senior US medic — whose organisation operates under congressional charter — was critical to the formation of a G20-endorsed fundraiser that is set to be hosted in Brussels on May 04, with the aim of raising an initial €7.5 bn. The US has yet to say publicly whether it will contribute to the Brussels drive for funding. The US state department says it is committed to international efforts and has sent supplies and support worth more than $775m to countries around the world to fight the pandemic. “In every corner of the globe, the US is lending a helping hand to countries that need it the most,” John Barsa, the USAID chief, said last week.

Nearly a dozen approved drugs could be effective against COVID-19: Study

At least 10 different drug compounds ranging from cancer therapies to antipsychotics and antihistamines may be effective at preventing the new coronavirus from multiplying in the body, according to a multidisciplinary study conducted by a team of scientists in the United States and France published in the journal Nature on Apr 30. The researchers mapped the human proteins the virus interacts with inside the body when it infects cells and makes copies of itself, then looked for compounds that could block the virus from using those proteins. The result showed that 47 compounds in cell cultures had the desired effect, at least 10 of which are already in approved drugs or being studied for diverse conditions, but could be repurposed against COVID-19, the illness caused by the new coronavirus. Researchers have been rushing to develop experimental therapies as well as to repurpose existing drugs to treat patients with COVID-19 and communities are pinning high hopes on Gilead Sciences' experimental antiviral drug, remdesivir.

Forget Washington and Beijing: These Days Global Leadership Comes From Berlin- Foreign Policy

Any government’s first responsibility is to look after its own population. The German government imposed a ban on medical supply exports just as Italy was succumbing to the coronavirus in early March, while other countries closed their borders with Italy. There is an inherent resentment towards Germany that has been simmering since the 2012 Eurozone crisis, when many Italians felt Germany acted heartlessly (though it finally agreed to a bailout of Italy and Spain). As of April 23, according to the German foreign ministry, Germany has treated 229 foreign intensive-care coronavirus patients (44 from Italy, 55 from the Netherlands, and 130 from France) and offered to foot the bill for all of them. With 14 tons of medical equipment sent to China earlier, Berlin has donated and delivered tons of medical supplies (including ventilators) and sent doctors to Italy, Spain and France. The government-run Robert Koch Institute, the country’s disease control and prevention agency, has sent coronavirus test kits to developing countries. It has also reallocated 1.15 billion Euros ($1.25 billion) to help developing countries fight the coronavirus. But unlike the Chinese and Russians with their modest aid, the Germans haven’t been very good at publicizing their efforts.

UN chief laments lack of global leadership in COVID-19 fight

United Nations Secretary-General Antonio Guterres on April 30 lamented a lack of leadership by world powers and a divided international community in the fight against the coronavirus as he raised concern about inadequate support for poor countries. In response to questions about global leadership, Guterres told a news conference that the international community was divided when it was "more important than ever" to be united. "There is a disconnect between leadership and power. We see remarkable examples of leadership but they are usually not associated with power. And where we see power we sometimes do not see the necessary leadership," Guterres said. The 15-member U.N. Security Council has spent more than a month trying to negotiate a resolution that would emphasise the urgent need for enhanced cooperation among all countries in the fight against the coronavirus and calls for a humanitarian truce in conflicts around the world. A key sticking point, diplomats said, is how the resolution should reference the World Health Organization. Trump has halted US funding for the WHO while Washington reviews the agency's handling of the pandemic, and accused it of being "China-centric," an assertion the organisation denies.

Trump threatens new tariffs on China as U.S. mulls retaliatory action over virus

U.S. President Donald Trump said on April 30 that his hard-fought trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak. “There is a discussion as to how hard to hit China and how to calibrate it properly,” one of the sources said as Washington walks a tightrope in its ties with Beijing while it imports personal protection equipment (PPE) from there and is wary of harming a sensitive trade deal. The Washington Post, citing two people with knowledge of internal discussions, reported on April 30 that some officials had discussed the idea of cancelling some of the massive U.S. debt held by China as a way to strike at Beijing for perceived shortfalls in its candidness on the COVID-19 pandemic. Trump’s top economic adviser denied the report. “The full faith and credit of U.S. debt obligations is sacrosanct. Period. Full stop,” White House economic adviser Larry Kudlow told Reuters.

China shaping up to be central campaign theme for both Donald Trump and Joe Biden

China might be the second most important campaign issue in this year’s US presidential campaign, but the country is tied so directly to issue No 1 – the devastation caused by the coronavirus pandemic – that it might not matter. As President Donald Trump and his presumptive Democratic challenger, Joe Biden, compete to portray themselves as being the toughest on Beijing, the only factor that will prevent a complete diplomatic severance, former government officials and experts said, will be the need to restore economic growth. If anything holds Trump back, it is the counsel of business leaders in his circle warning that further damage to relations with Beijing will make the economic damage worse and more difficult to recover from, Medeiros said. Additional agricultural purchases by China as part of the phase one trade deal, for example, will be important to US farmers, a constituency that will be key in the upcoming election, he said. US exports to China supported at least 1 million US jobs in 2018, said Anna Ashton, who is in charge of government affairs at the Washington-based US-China Business Council.

China's expensive bet on Africa has failed

As the prices of oil, copper and minerals found in Africa have plunged in the global economic meltdown, the prospects for China-funded projects look bleak. China is facing growing pressure to forgive the tens of billions of dollars of loans it has made to African countries since the early 2000s. According to the China Africa Research Initiative at Johns Hopkins University, China loaned $152 billion to 49 African countries between 2000 and 2018. The World Bank estimates that, as of 2017, the value of China's loans to sub-Saharan African countries was $64 billion, or more than 60% of the stock of bilateral debt. Besides showering Africa with credit, China has bet big on direct investments, mainly through its state-owned enterprises. Between 2008 and 2018, Chinese FDI in Africa rose from $7.8 billion to $46 billion, according to official data. On paper, China may seem to have got its money's worth. Merchandise trade between China and Africa rose from $107 billion to $204 billion in 2018, based on data provided by the Chinese government. But the question is whether China could have expanded its trade with Africa and maintained its access to raw materials without committing nearly $200 billion in bilateral loans and FDI in a distant continent full of political and economic risks.

China faces wave of calls for debt relief on ‘Belt and Road’ projects

Mei Guanqun, a researcher at China Center for International Economic Exchanges, a government think-tank in Beijing, said China had not formed a plan on dealing with the growing requests for debt relief. “But there are a few rules of thumb,” he said. “First, China’s commercial banks like [Bank of China] and [Industrial and Commercial Bank of China] are unlikely to forgive loans because they are under pressure from Beijing to meet financial targets,” Mr Mei said. “Second, China Development Bank and China ExIm Bank may provide sovereign loan relief to countries that are friendly with us,” Mr Mei added. “We may cut interest rates by a few percentage points or have it removed. We could also reduce principal payment by a moderate amount.” With so much in flux, China faces a delicate balance between maintaining relationships with BRI countries and attempting to limit the haircut it takes on debt repayments. China signed up to a G20 agreement this month to freeze bilateral loan repayments for low-income countries until the end of the year. The G20 initiative said that it covered “all official bilateral creditors”, a definition that appeared to include lending from Chinese policy banks.

US Navy stages back-to-back challenges to Beijing's South China Sea claims

The guided-missile cruiser USS Bunker Hill on April 29 "asserted navigational rights and freedoms in the Spratly Islands, consistent with international law," said Cmdr. Reann Mommsen, a spokesperson for the Navy's 7th Fleet, in a statement. Day before, on April 28, the guided-missile destroyer USS Barry conducted a freedom of navigation mission near the Paracel Islands, which are called the Xisha Islands by China. The back-to-back missions are indicative of a new Pentagon strategy -- "strategic predictability, operational unpredictability" -- to keep foes on their heels, said Timothy Heath, senior defence researcher with the Rand Corp. think tank in Virginia. Heath pointed to a similar move earlier in the month when the US Air Force ended its Continuous Bomber Presence on the island of Guam, opting instead to move B-1s, B-2s and B-52s into the region whenever the Pentagon sees fit. "Just as the bombers at Guam are no longer consistently present there, US naval forces in the South China Sea are likely to carry out operations and activities in unusual patterns that are inconsistent with past, predictable patterns," Heath said.

US intelligence says Covid-19 ‘not man-made’ but will still investigate Wuhan lab-origins theory

The US intelligence community has said the Covid-19 virus was “not man-made or genetically modified,” as reports suggest. Donald Trump is warring with spy agencies and pushing the theory that the virus came from a Chinese lab. In a rare statement, the Office of the Director of National Intelligence (ODNI) said on April 30 that the US intelligence community “concurs with the wide scientific consensus” that the novel coronavirus was “not man-made or genetically modified.” The ODNI said it would “continue to rigorously examine emerging information and intelligence” to determine whether the outbreak first began through contact with infected animals – or whether it could have been “the result of an accident at a laboratory in Wuhan.”

Why US outsourced bat virus research to Wuhan

The US National Institutes of Health (NIH) funded bat-coronavirus research in the Wuhan Institute of Virology in China to the tune of US$3.7 million, a recent article in the British newspaper Daily Mail revealed. Lab accidents at the US Centres for Disease Control and Prevention (CDC) in July 2014 raised questions about biosafety at US high-containment labs. As such in October 2014, because of public health concerns, the US government banned all federal funding on efforts to weaponize three viruses – influenza, Middle East respiratory syndrome (MERS) and severe acute respiratory syndrome (SARS). In the face of a moratorium in the US, Dr Anthony Fauci – the director of the National Institute of Allergy and Infectious Diseases (NIAID) and currently the leading doctor in the US Coronavirus Task Force – outsourced the research in 2015 to China’s Wuhan lab and licensed the lab to continue receiving US government funding. In January 2018, the US Embassy in Beijing sent cables warning about the safety of the Wuhan lab and asked for help. The Wuhan lab is now at the centre of scrutiny for possibly releasing the SARS-CoV-2 coronavirus and causing the global Covid-19 pandemic.

The Secret to Vietnam’s COVID-19 Response Success

Vietnam’s model for containing the outbreak has been touted as a successful low-cost model. Whereas its neighbours, Taiwan and South Korea, could afford mass testing, Vietnam lacked the resources and instead opted for selective, but proactive prevention. Aside from some common policy actions such as contact tracing, ramping up production of medical supplies, and installing checkpoints at airports, Vietnam found its success by balancing overt caution with precision. For example, the provincial authority was allowed to lock down villages and communes following advisory notices from the Ministry of Health. In addition, the government has positioned itself as an effective source of leadership during the pandemic by providing information with transparency. The Ministry of Health took the initiative to launch a website and a mobile application not only to ease the medical process but also to disseminate accurate information quickly. The digital apparatus helped stem the spread of rumours and fake news, in addition to legal enforcement against people who spread inaccurate information or engage in profiteering.

Russian Prime Minister Mishustin tests positive for coronavirus as national total tops 100,000 cases

Russian Prime Minister Mikhail Mishustin has been diagnosed with Covid-19. The news was announced on April 30, live on national television, during a video link with President Vladimir Putin. First Deputy Prime Minister Andrey Belousov will step in as interim head of government during Mishustin’s recovery. It appears Mishustin - who replaced Dmitry Medvedev as Prime Minister in January - received the result of his test while at work. Earlier in the day, he headed a governmental session, conducted remotely. His diagnosis makes him the second major world leader known to have contracted the infection - after British Prime Minister Boris Johnson. "What's happening to you now could happen to anyone," Putin replied. The President assured Mishustin that no major decisions would be taken without his input while he battles the infection. Putin also noted that members of the government are at particular risk during the Covid-19 crisis as direct contact with colleagues cannot be avoided. The Prime Minister has been working from his office at Moscow's 'White House.'

German government bans Hezbollah — Interior Ministry

German Interior Minister Horst Seehofer on April 30 banned all Hezbollah activities in the country, his ministry spokesman said on Twitter. Hezbollah is a Lebanese Shiite organization consisting of a political and a militant branch. It receives significant backing from Iran and has fought alongside the troops of Syrian President Bashar Assad. Germany had previously distinguished between the group's political and militant arms, but on April 30 the country classified the group in its entirety as a terrorist organization. "Hezbollah openly calls for the violent elimination of the State of Israel and questions the right of the State of Israel to exist," the Interior Ministry said in a statement. "The organization is therefore fundamentally against the concept of international understanding, regardless of whether it presents itself as a political, social or military structure." Banning Hezbollah could strain relations between Germany and Iran. However, Iran is dependent on good relations with Germany and the European Union, exemplified most recently by the use of Instex, an EU-Iran trading mechanism designed to skirt US-imposed sanctions and export medical supplies to the pandemic-hit country. 

UAE’s Abu Dhabi to allocate 15% of procurement spending and annual contracts to MSMEs

The United Arab Emirates’ government of Abu Dhabi will allocate 15% of government procurement spending and annual contracts to micro-Small and Medium Enterprises (MSMEs) from 2020 onwards to drive growth for small businesses, in line with its economic stimulus package, the emirate’s media office said in a tweet on April 28.

Global energy use suffers 'historic shock.' It's like demand from India has been wiped out

Global energy use has been dealt such a huge blow by the coronavirus pandemic that it's like wiping out demand from all of India, a country of 1.3 billion people and the world's third biggest consumer. That's according to the International Energy Agency, which said in a new report on April 30 that demand for energy could crash 6% this year if lockdowns persist for many months and the economic recovery is slow. Such a scenario is "increasingly likely," the IEA said, adding that a drop of that scale would be seven times the size of the decline following the 2008 global financial crisis. Demand for electricity is poised to plunge 5% in 2020, the largest fall since the Great Depression. The decline in energy use is led by developed economies, according to the IEA. The agency forecasts that demand will drop by 9% in the United States and 11% in the European Union. Only renewable energy has held up, with demand for electricity generated from sources such as solar and wind set to rise by 1% in 2020. Low operating costs have provided a boost.

Amazon warns virus costs could wipe out surging sales

After an initial dip in March, investors had begun to see Amazon as the company that stood to benefit the most as consumers around the world locked down, changing buying habits that may endure beyond the crisis. But that demand has come at a high cost, as Amazon was forced to adapt its processes, implement social distancing in its facilities, hire new staff and prioritise what consumers most urgently needed: household essentials and medical goods. The ecommerce company reported record first-quarter net sales of $75.5bn, better than Wall Street had expected, even while its operating expenses swelled to $71.5bn, up from $55.3bn a year ago. Net income for the quarter was down 30 per cent compared to last year. Looking ahead to its second quarter, the company said operating income could swing between a loss of $1.5bn or a gain of the same amount. “Under normal circumstances, in this coming Q2, we’d expect to make some $4bn or more in operating profit,” said Jeff Bezos, Amazon’s chief executive. “But these aren’t normal circumstances,” he added. “Instead, we expect to spend the entirety of that $4bn, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe”.

Singapore expects spike in job losses as economy faces ‘darkest years since independence’

Singapore on April 29 reported a slight uptick in overall unemployment but analysts warned it was the start of a rocky road ahead with full-year retrenchments possibly hitting 200,000 and those keeping their jobs facing steep wage cuts. Singapore, a financial hub, is bracing for a sharp economic contraction, with businesses in non-essential services being worst-hit, together with those in the construction sector and smaller players in the retail and food industries, while the only bright spots are the health care, education and public administration sectors. Senior economist Irvin Seah of DBS Bank, the city state’s largest bank, said in a research note on April 27 that export-reliant Singapore, whose economy is a bellwether for the health of global trade, would experience its “darkest year … since independence”. “For now, unemployment rates and retrenchments remain lower than in previous downturns … However, labour market conditions are likely to worsen in the upcoming quarter, given the sharp fall in demand globally as well as in Singapore as firms adjust to circuit breaker measures.”

Toyota and Canon among companies freeing patents to fight virus

About 20 Japanese companies, including Toyota Motor and Canon, will release patents and other intellectual property held in Japan and overseas for free to help fight the new coronavirus, Nikkei has learned. The idea was initially proposed by Professor Fumihiko Matsuda, head of the Center for Genomic Medicine at the Graduate School of Medicine at Kyoto University. Nissan Motor, Honda Motor, Shimadzu, Ajinomoto Group and Tokyo-based SRL, a member of the Miraca Group, will also participate. Organizers will continue to call on a wide range of companies to join the initiative. The group's office will be located at Geno Concierge Kyoto, a start-up launched out of Kyoto University. All patents, utility model rights, design rights and copyrights owned by each company will, in principle, be made free of charge as long as they are for use in fighting the coronavirus. The companies will not exercise their exclusive intellectual property rights until the World Health Organization declares the global pandemic has ended. One notable item among patents that will be released by Toyota is technology that can collect respiratory data from coronavirus patients without coming into physical contact with them. It was originally developed for use in nursing care robots.

Screen-shunning doctors open up to tele-health in pandemic era

For years, telemedicine has been opposed by clinics, led by the Japan Medical Association, a powerful lobby representing the interests of doctors and a key support base of Prime Minister Shinzo Abe's Liberal Democratic Party. The coronavirus outbreak is shifting the tide, however. Abe is now expected to announce on May 05 that restrictions on the medical sector will be lifted later this month, opening the way for patients to consult with doctors online and receive prescription without physical examinations. Such service will be covered by Japan's national health care insurance. It is not clear how many hospitals or clinics will be able to take advantage of the easing of the restrictions, however. Most Japanese clinics still do not even accept payment by credit card, which is necessary for telemedicine.Telemedicine has been available in the country since 2018, but only to patients of chronic disease and those receiving prescriptions for existing illnesses. New illnesses have to be examined by a doctor in person.

Workers Likely to Fare Better in Nations with Coronavirus Job-Retention Programs

Workers in Germany and Japan are likely to weather an expected coronavirus-induced global recession better than their U.S. peers, thanks in part to stronger job-retention programs, recent data suggest. Germany’s jobless rate will average just 3.9% this year, up from 3.2% in 2019, the International Monetary Fund projected this month. In Japan, the rate is forecast to rise to 3% from 2.4%. But in the U.S., it is expected to jump to 10.4% from 3.7% in 2019.German companies have signed up a record 10.1 million workers for a state salary scheme to compensate cuts in working hours due to the impacts of the coronavirus pandemic, according to new figures released by the Federal Employment Agency (BA). The previous record was in May 2009, when 1.44 million people were on reduced hours in the aftermath of the global financial crisis." Short-time work secures millions of jobs in Germany," said Labor Minister Hubertus Heil. "We may not be able to guarantee every job in our country, but we will fight for every job."

ECB launches fresh push to lend to banks at ultra-low rates

Christine Lagarde, ECB president, said the eurozone was facing an economic contraction that was “unprecedented in peacetime”, and noted the “profound deterioration in labour conditions”, adding that consumer sentiment indicators were in “freefall”. Data published earlier on April 30 showed the eurozone’s economy shrank by the fastest rate on record in the first quarter.ECB growth projections indicated that the eurozone economy could contract by between 5 and 12 per cent this year depending on the success of coronavirus containment measures, she said, adding that it would take until 2021 before conditions “return to a new normal”. In a move to bolster the European banking system’s access to funds and to avoid a drying up of credit, the ECB said it would lend money to banks at rates as low as minus 1 per cent through a planned programme and also launched a separate round of fresh lending.

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