Below please find key take-outs from our April 8th conference call featuring Adrian Gore, CEO of Discovery/Vitality and partner to some of the biggest insurance companies in the world; Amber Rudd, Teneo Senior Adviser and former Home Secretary; Jerome Hauer, Ph.D, Teneo Senior Adviser and former Commissioner of the Division of Homeland Security in the US; and Wolfango Piccoli Teneo’s Director of Research - chaired by Principal of Teneo’s Situations and Politics practice and former Downing Street Director of Politics and Communications, Craig Oliver.
The Global Response and Moves Towards Exit Strategies
- A rhythm for command and control is important for a government to get ahead of this sort of crisis, and that was established over recent weeks including with the daily press conferences.
- However, the illness of the PM and Health Secretary, and self-isolation of Michael Gove, has undermined the ability of those press conferences to deliver the messages needed to the public and build confidence. The absence of the PM, coupled with the fact that there is a time lag with updates, is creating difficulties for the government.
- The UK and the US have been almost unique in having their daily Covid-19 press briefings led by the Prime Minister (or President) rather than technocrats, as in Italy, South Korea or Ireland. This was intended to signal commitment and reassurance that the response was being led from the top, but has created two problems: firstly suffering the absence of the UK PM after testing positive for Covid-19, and secondly, changing the dynamic of the conference from a focus on health issues, to being a political press conference.
- Hancock’s return from self-isolation signified a shift back to control with testing targets as a focus, and this will remain the focus of the public and press when they are measuring the success of government.
- In terms of the impact on leadership – while committees of Cabinet will continue to function as they have done and Raab will lead discussions, he does not have the authority that the PM has, and will act as a ‘chairman of the board’ rather than a single authority. He can continue in this role for now, but this will be difficult to sustain without the authority of the PM.
- Exit strategy still unclear – at the moment the lockdown is generally holding firm, but this will be finite. We’re more likely to see a gradual/partial exit in the UK as in Austria, but this is unlikely to happen for a few weeks. A key consideration will be the growing number of businesses that could collapse over the coming weeks, and what can be done to counter this. Other areas to watch out for while the lockdown continues will be a growth in cyber-crime and domestic violence.
- In China, coronavirus lockdown measures in Wuhan have ended after 76 days.
- Authorities have begun allowing its 11 million residents to travel in and out of the sprawling city where the pandemic began without special authorisation.
- Under new rules that came into force as of yesterday, people are allowed to enter and leave on the condition they have a mandatory smartphone application powered by a mix of data-tracking and government surveillance to demonstrate that they are healthy and have not been in recent contact with anyone infected.
- Whilst this is reasonably straightforward to carry out in China, it is unlikely to be applicable in Europe or the US.
- Of the 10 worst affected countries in the world, seven are in Europe. In continental Europe the debate about exit strategies is becoming more prominent. The tension between top-down efforts to coordinate response and bottom-up incentives to deviate from that response will continue to characterise the coming weeks and months.
- The EU’s emergency responses to coronavirus have divided member states. Brussels’ ideas on how best to exit the pandemic may prove just as divisive - a ‘road map’ to guide member states on when best to end their lockdowns was due to be announced by the European Commission yesterday, but this has had to be put on ice due to objections from member states who want to ensure this strategy is devised in consultation with governments.
- Looking ahead, the biggest risk is lack of synchronicity/co-ordination regarding ‘exit strategy’ on two main fronts:
- Public health: Countries lifting restrictions in a non-synchronized way, therefore prolonging border closures and making travel complicated.
- Economic: After bickering over for the past 15 hours, EU finance ministers this morning still struggled to agree on ways to mitigate the economic impact of the outbreak. They will meet again tomorrow to try to agree a deal.
- The issue of state capacity will be even more important at the exit stage than it was when restrictive measures were applied as it will entail a much more prolonged period of time (possibly up until a vaccine is available). There will also be pressure regarding the delivery of tools (masks, digital technology, testing) that will allow for the easing of restrictions while protecting the capacity of the health system. This requires an effective planning capacity and an infrastructure that some states may no longer have available.
- The UK Chief Medical Officer, Chris Whitty, said earlier this week that there is a lot to learn from Germany in terms of testing. While the experience of other countries can provide valuable insights, the reality is that it is mainly about infrastructure (labs, testing kits, digital technology tools) and ability to deliver.
- After roughly a month of tightening lockdowns across Europe, Austria, the Czech Republic, Denmark and Italy will in the coming weeks become the first European countries to loosen restrictions on daily life and business. All of these will see very gradual opening – some countries will be better equipped to manage this than others.
- Has announced that kindergartens and primary schools will reopen on 15 April.
- Government starting to prepare for a gradual exit from the current lockdown. In practice this means an extension of many existing restrictions e.g. Continued ban on public events until the end of June; introduction of a requirement to wear face masks; and limitations on number of customers in shops as they re-open
- The backbone of Austria’s crisis response has been the expansion of testing capacity. The government is currently aiming for some 15k tests per day in the country of 8.8m people.
- Government is considering a gradual plan to reopen the economy from mid-April onwards. After Easter, a limited number of industrial sectors could be allowed to resume production, depending on how the fight against the virus is going. Confinement could be gradually eased from early May for certain age-groups and locations.
- Continuing hygiene and social-distancing rules are likely to affect all workplaces until there is an effective vaccine or treatment against the virus, and service sectors such as restaurants and bars could face a long wait until they can reopen.
- To complement these steps, Italy is considering a rather ambitious plan including widespread testing of the population and better tracing of people’s movements
- South Africa has a number of characteristics that make it particularly susceptible to the impact of the pandemic:
- High rates of HIV / AIDs and immunocompromised people
- High levels of poverty
- Large numbers of people living in close proximity in townships
- Very weak economy, with much less fiscal headroom compared to Europe and the US.
- Nonetheless, South Africa’s response seems to have worked relatively well so far, with strict lockdowns in place minimising any movement across the country. Currently there have been around 1,600 infections with only 11 deaths, although this will need to be watched carefully given the vulnerability of the country.
The Business Response: Looking Beyond the Pandemic
- Key areas that businesses should be focusing on include: their people, their customers and also the country/communities in which they operate. This includes supporting staff and keeping them engaged in a changing working environment; looking at the products that are being offered to customers and reconfiguring them where appropriate; and finding ways to provide both financial and service-led support to key markets/communities.
- It’s too soon to tell when business will start to return to ‘normal’, and it is incumbent on leaders to be authentic and realistic but also offer hope. This means continuous communication and keeping people abreast of what to watch out for rather than trying to give binary answers, looking at the situation one day at a time.
- Much of the workforce has undoubtedly become more familiar with using remote technology to work from home and this will have an impact on how people continue to work beyond the crisis. However, there are still many elements of business that will need to be conducted face-to-face once the pandemic is over.
- As countries begin to open, businesses will likely to be encouraged to slowly reintegrate people into the workforce, with those members of staff who can work from home continuing to do so for longer to support the monitoring for a potential second wave.