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TIPS The economy and the pandemic 9 August 2020 - 23 August 2020


KEY FINDINGS
On the pandemic
• The number of reported new cases fell to an average of 3 350 a day in the week to 23 August, from a peak of over 12 000 in mid-July. In response, government relaxed restrictions to Level 2 from Tuesday, 18 August.
• The government was clearly concerned that removing legal restrictions could lead the public and businesses to weaken their efforts to limit transmission, especially physical distancing and masking. Despite the progress from mid-July, the number of reported new cases in the week to 23 August was still three times as high as when Level 3 started
on 31 May. If people engage in more risky behaviour, cases will start to surge again in two to three weeks.
• The move to Level 2 underscored that, as long as the pandemic is not fully under control, some industries cannot be both profitable and safe unless they transform their business models. This applies above all to public in-doors entertainment, restaurants and bars; large malls; most personal services such as gyms and hair salons; public transport; and tourism, especially from overseas.

On the economy
• The available evidence indicates that the economic recovery remains slow.
• Big companies have begun to announce their financial results for the period to June, and most are not pretty. There are, however, big differences depending on the industry and the state of the business before the lockdown. State-owned companies that have relied on government bailouts over the past decade now face the real risk of
liquidation.
• Following the public outcry over corruption around the pandemic response, the government has introduced measures to capacitate state institutions to initiate investigations and prosecutions. In light of the open pushback from some politicians,
the success of the new initiatives will depend on support from civil society, and especially the media and advocacy groups, as well as on the ability of the legal system to move far more quickly and decisively.

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