Fighting the Pestilence: Lessons from South Korea 

Part I: A Multidimensional Crisis 

By Gouranga Gopal Das

An unknown virus causing fear, uncertainties and colossal loss of human life made us think about the impending existential threat from the COVID-19 pandemic. After almost ten months, there are still mounting tensions about the challenges posed by this global emergency, medical as well as economic. This Global Health Crisis (GHC) has occurred after about 10 years of the Global Financial Crisis (GFC) with both having a deep recessionary impact on the health of the economy. But it is the health crisis that has triggered a difficult trade-off between health and the economy. Lockdowns were and are being imposed to contain human mobility as contiguity shapes its spread. But the balance between lockdowns (and/or social distancing) and livelihood (economy) is getting harder.

This article documents (in three parts) the experience of South Korea, one of the few outliers in terms of ‘containment strategy’ and ‘economic package’.¹ The objective is to see if there are any lessons for the countries relatively laggard in responding to this pandemic and managing it with promptness. As has been discussed in the context of economies, such as Germany or the Nordic Countries (The Economist, September 12, 2020, pg.66), ‘Lockdowns may not seem like incremental change, but reducing working hours to limit social contact, apportioning costs across society and gaining consent for restrictive measures are all easier when there are already institutions in place which allow collective action. Success may be generated more by unity and consistency than by the strength of the intervention that is chosen. Coordinated economies are well equipped to handle coordination problems, such as promoting public health.’  South Korea adopted a mix of strategies – adopting a coherent liberal approach as well as pursuing a disciplinarian way to ensure trust and support of the people. India, on the other hand, failed to embrace any of the existing models by pursuing a ‘disjointed and chaotic’ strategy which The Economist has adduced to the United States and the United Kingdom.

A proper analysis of these needs accounting of the approaches in a scientific manner (Das 2020a). Before embarking on the stellar performance of South Korea in managing the COVID-19 pandemic, in this (Part I), I first outline a comparative perspective on the dimensions and scale of impact briefly and take a brief look at the global scenario. In Part II, I present the extent of the outbreak (in Phase I), in South Korea, countermeasures and highlights. I also discuss the economic impact and the government’s responsiveness. Lastly, in Part III, I compare Korea’s case with special reference to Kerala’s success within India.

Pandemic scenarios and overall impact

Chart 1 shows the chronological spread of the pandemic across regions/countries. Figures 1 and 2 offer comparative perspectives on tests performed across India vis-à-vis other countries, showing S Korea clearly as an outperformer.

Chart 1. Incidence of COVID-19 during last one month and some related parameters 
JHU: Johns Hopkins University 
Source: WHO

Figure 1. Cumulative tests conducted per confirmed case

The starting period of COVID-19 (officially named such on February 11, 2020) causing pneumonia is around November-December 2019 in the Wuhan province of the People’s Republic of China (PRC) which spread fast across East Asia, and gradually gripped the Western World and Australasia. On March 11, the World Health Organization (WHO) declared this outbreak a pandemic with ‘public health emergency of international concern.’ Table 1 offers the global picture of the pandemic for selected countries.

Table 1. Global situations of the pandemic

*Death rate as % of Infection
Source: Asian Development Bank COVID Database. As of October 12, 2020.

We see a wide divergence across countries in terms of cases and death rates. On both these accounts, South Korea remained far below other nations. It hit South Korea in early February and gradually spread during the Lunar New Year celebrations catalysed by a religious cult, called Shinchonji ² (more on this later).

Figure 2. Case fatality rate

Initially, 7,736 cases were confirmed in the PRC. Eighteen economies with 83 confirmed cases were reported. By May 12, the pandemic had spread to 213 nations and regions with four million people being affected and 280,000 deaths registered. The global death rate was 6.56 percent (in April, according to WHO). However, this type of calculation is not completely perceptive as it does not factor in age and country-specific circumstances.³

From these worldwide scenarios, we can conclude that COVID-19 does not spare any country; it has impacted them irrespective of their economic status; it has affected both developed and developing economies. The US and the UK are glaring examples, as are Italy, Germany, France and other developed nations across the Atlantic and the Pacific. It is an ‘equalizer’ in that respect. As per Cutler and Summers (2020), the total cost of this pandemic is estimated to be more than $16 trillion in GDP considering the loss of physical health, mental health issues, long-term health impairment, premature death as well as the loss of economic activity (i.e., GDP). However, the trajectories of episodes and cycles of progression are country-specific. Clearly, the parameters, as presented in Table 1, show that the consequences are different. This could be ascribed to country-specific situations regarding public health facilities, timelines, existing infrastructure, and civic participation and cooperation with the government.

In order to understand the economic impact of the pandemic, we need to take a holistic, multi-dimensionality view of the problem that includes: (I) global interdependence and (II) global and East Asian Regional Production Network (RPN) in the global value chain (GVC) of engagement due to several facets of globalization. Also, the new emerging or evolving role of global commons like the World Bank (WB) and the World Health Organization (WHO) are important to consider.

We categorize these into the following key aspects:

• Pandemic has triggered a triple crisis – economic, health and resilience away from disaster or climate change as a sui generis problem;
• Pre-COVID-19 distortions – trade war, rise of protectionism and trade disruptions – have already created a world economy with global imbalances. During GFC 2008/09/10, the trilemma was that of finance, energy-environmental crisis (fossil fuel, oil price, climate change), and food (land-use changes via biofuel trigger). Thus, climate-change-induced pollution health hazards even long before COVID-19 caused aggravated health and hazards related to natural disaster;
• Post-COVID-19 (ongoing) – at present, COVID-19 is a dual burden of health and pollution hazards accentuating health problems (via direct and indirect health impacts due to pre-existing co-morbidities and risk factors like diabetes, lung diseases like COPD, toxicity-led diseases like cancer, etc.), due to the intuitive link between chronic health conditions, air pollution and vulnerability of individuals/communities to COVID-19. Therefore, we have a magnified impact.

Global interdependence and domestic factors are two sides of the same coin. Pandemic-induced supply (lockdown-workplace closures/closing borders) as well as (consumer) demand collapse have a deep impact. Lockdowns and the associated effects on consumption and work (labour hours) are demand and supply shocks that increase the severity of a deep recession, exacerbate the size of it but save lives by reducing the severity of the epidemic. In fact, these negative supply shocks due to layoffs, lockdowns, and firm exits caused a decline in demand and the typical Keynesian solution with fiscal-monetary duo via stimulus package might not have the intended ‘multiplier’ benefits. These are affecting the domestic economy, the effects of which are transmitted globally via interconnectedness (sectoral and regional) of the economies. For example, trade tourism is affected due to restrictions on mobility for health reasons. Supply shock works due to human capital loss related to closure. Also, migration and related remittance flow have dealt a severe jolt to the capital flow.

The World Bank expects over 90 percent of the countries to be in recession in 2020 due to COVID-19 pandemic. Advanced economies will shrink by 7 percent and developing economies by 2.5 percent.  Also, it has been predicted that due to ‘financial uncertainty’, the cumulative loss in world output would be about 14 percent in the following year after the pandemic (Caggiano et al. 2020).

COVID-19 pandemic has dramatically impacted the manufacturing sector. In conjunction with the economic downturn, it has altered operations, supply chains, and output. The networks of manufacturing are interwoven and responsible for moving an enormous volume and variety of international and domestic goods. In June 2020, 292 million jobs in manufacturing supply chains were at high risk due to the COVID-19-related drop in consumer demand, and a further 63 million jobs were at medium risk. Workers on these jobs in affected supply chains are likely to suffer from reduced incomes, reduced working hours or unemployment. The share of jobs at high risk is greatest in Asia and the Pacific region.⁴ Supply chains linked to manufacturing play an important role in propagating the economic impact across sectors and countries. The manufacturing sector was experiencing a disruption of up to 35 percent of imported input supply due to the closure of all but essential workplaces. Thus, closing-down the sectors prone to contact-intensive activities is effective only as long as affected workers are taken care of without dampening the demand.

There is a growing concern that the global outbreak of COVID-19, already a health crisis, could turn into a food crisis resulting from the disruption of agro-food, agri-business supply chains. In poor countries, the need for food assistance could increase dramatically, and in some rich nations too, the pandemic has put many at the risk of hunger. Food supply chains have largely continued to function, but private operators have faced some serious disruptions, including the closure of bars, restaurants, hotels, and schools as well as shifts in consumer demand. Some sub-sectors, especially fruits and vegetables and meat-packing and processing, have suffered supply chain disruptions because of COVID-19 infections, logistics problems, and/or unavailability of seasonal workers. An additional hundred million people around the globe will fall into extreme poverty because of the virus. As per the Asian Development Bank report (June 2020), job loss, unemployment, income loss have led to tremendous food security risks (i.e., hunger and malnutrition) in Asia and the Pacific region by affecting the food supply chains regionally and globally, and rise in food prices by 10 percent to 20 percent in India, Pakistan and Sri Lanka.

With precarious conditions in the developing countries, the focus on emerging economies like India is necessary as these have more resource constraints as compared to the developed economies. India, for example, registered a growth rate of -23.9 percent in Quarter 2 of 2020, which is beyond imagination. With segregated systems and the lack of common stream of measures, emerging economies are hit hard with re-directed vital resources to addressing measures for COVID-19. Some countries have slowly begun to resume operations in order to allow small and medium businesses to function.

Although the scientific community is engaged in finding vaccines, nothing concrete is in sight so far. Thus, lockdown and unlocking strategies are undergoing several phases reflecting the severity of the situations and possible spikes or relapse and resurgence of the disease. We need to admit that COVID-19 has accelerated the ‘deglobalization’ sweep that started after the 2008 financial crisis.

At the time of writing this piece, however, S Korea is undergoing a crucial ‘trial of misfortune’ due to a second spike during the month of August caused by the non-compliance of the practice of the ‘trio’ – mask, sanitizer, and social distancing. A surge of about 400 cases per day for a few weeks has moved the S Korean citizens out of their peaceful status restored after the first onslaught of COVID-19. However, prompt action was initiated with strict adherence to social distancing of 2.5 meters, resulting in a fall in cases by half. At the same time, India marched ahead to the second position in the global tally of confirmed cases (WHO and Worldometer, September 8, 2020).

For gaining insights from episodes with mixed experiences—as in economic history—we need to see the broader perspectives of the large Indian subcontinent and a small East Asian nation. India and South Korea, to date, have experienced totally disparate episodes in terms of management of the outbreak as well as striking a fine balance between lives and livelihoods. What lies underneath these disparities will be discussed to elicit areas of concern such as, ensuring the practice of WASH (water, sanitation and hygiene), good infrastructure, health management, role of government, etc. What could be the new ‘mantra’?⁵ How to cope with this crisis when pre-crisis problems like trade war, populism and climate crisis compound with post-pandemic rifts across nations? Next parts discuss these aspects.

AUTHOR
Gouranga Gopal Das, Professor of Economics, Hanyang University, Seoul and Erica Campus, South Korea

This is Part I of a three-part piece.
Part II: COVID-19 in South Korea
Part III: India, Korea and the Kerala Model: Unequal Comparison?