COVID-19 International Developments: Daily Scan, March 27, 2020

Strategic

G20 shows remarkable solidarity to deal with pandemic

The G20 meeting was not marred by acrimony, as was feared given the ongoing oil price war initiated by Saudi Arabia-led OPEC, and a war of words between the US and China over the origins and handling of the pandemic. The G20 leaders expressed concern about the risks to fragile countries, notably in Africa, and populations such as refugees, acknowledging the need to bolster global financial safety nets and national health systems. In his remarks to the group, United States President Donald Trump spoke in support of multilateral action and coordination. "He talked about working together, and sounded more supportive of multilateral coordination than ever before," said one source who observed the meeting. On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan and strengthen its mandate as well as expand manufacturing capacity of medical supplies, strengthen capacities to respond to infectious diseases, and share clinical data & medical research.

G20 pledges $5 trillion to defend global economy against COVID-19

Leaders of the Group of 20 major economies pledged on March 26 to inject $5 trillion in fiscal spending into the global economy to blunt the economic impact of the coronavirus and "do whatever it takes to overcome the pandemic". Showing more unity than at any time since the 2008-2009 financial crisis that led to the G20's creation, the leaders committed during a video conference summit to implement and fund all necessary health measures needed to stop the virus's spread.Their statement contained the most conciliatory G20 language on trade in years, pledging to ensure the flow of vital medical supplies and other goods across borders and to resolve supply chain disruptions. But it stopped well short of calling for an end to export bans that many countries have enacted on medical supplies, with the G20 leaders saying their responses should be coordinated to avoid “unnecessary interference”. "Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary," they said.

Xi says China to expand reforms and contribute to a stable world economy

China will increase its supply of active pharmaceutical ingredients, daily necessities, and anti-epidemic and other supplies to the international market, Xi told the G20 Leaders summit. China will also continue to pursue a proactive fiscal policy and prudent monetary policy, he said. The Chinese President also made an indirect reference to the US’ refusal to remove tariffs against Chinese goods as a result of Trump’s trade war, and promised to further relax restrictions on market access for foreign businesses – the subject of US and European complaints for years. “China will steadfastly expand reforms and opening up, widen market access, continuously perfect the business environment, expand imports and outbound investment, and contribute to global economic stability,” Xi said.

Syria’s Revenge on the World Will Be a Second Wave of Corona virus

Analysts are warning that the Middle East could face catastrophe due to corona virus. Foreign Policy has quoted Syria as a major ticking time bomb. Even though Syria has reported just five cases of the disease (as of today), most analysts believe that the outbreak has already reached Idlib. Syria is relatively close to Europe, by way of Turkey. The decade long civil war has targeted hospitals in the area leaving it with threadbare medical care. FP mentioned that some COVID-19 test kits have been made available in Idlib, which are then sent back to Turkey for analysis. But raised deep concerns on how long this trickle can be sustained, as Turkey has begun to experience a steep increase in infection rates that will tax its own health care system.

Putin Calls for Sanctions 'Moratorium' at G20 Summit

Russian President Vladimir Putin called for sanctions relief during the coronavirus pandemic, telling G20 leaders it was a matter "of life and death." The leader did not specify which countries should be earmarked for sanctions relief, speaking instead more broadly. "Ideally we should introduce a... joint moratorium on restrictions on essential goods as well as on financial transactions for their purchase," Putin said at a virtual meeting of G20 leaders on March 26. Russia has been chafing under numerous rounds of Western sanctions following the annexation of Crimea in 2014 and its role in the Ukraine crisis.The Kremlin chief said it was important to establish "green corridors free of trade wars and sanctions" that would ensure supplies of medication, food, equipment and technology.

US overtakes China in confirmed coronavirus cases

The number of confirmed COVID-19 cases in the US has surpassed that of China. As of March 26, the US had 82,404 confirmed cases and 1,178 deaths, according to data collected by Johns Hopkins University. New York state alone had 37,802 confirmed cases, followed by New Jersey and California. President Donald Trump, speaking at his daily White House briefing on his administration's Corona virus response, attributed the country's surge in confirmed cases to the US "testing tremendous numbers of people," and voiced scepticism over China's official figures.Trump in a letter to the nation’s governors said that he planned to label different areas of the country as at a “high risk, medium risk or low risk” to the spread of the Corona virus, as part of new federal guidelines to help states decide whether to relax or enhance their quarantine and social distancing measures.

Health Silk Road: China's 'mask diplomacy' in pandemic-hit Europe stirs unease

China’s soft-power push through medical aid for diplomatic gains is giving way to indications of a brewing backlash and increasing unease in Europe on growing dependence on Beijing. “China is willing to work with Italy to contribute to international cooperation in combating the epidemic and to the construction of a Health Silk Road”, Xi had said in a phone call with Italian Prime Minister Giuseppe Conte earlier in March. A case in point is also Huawei's reported donation of 800,000 face masks to the Netherlands last week. Analysts have questioned whether this was motivated by altruism or by the 5G telecom auction scheduled to take place in Amsterdam in June. However, European governments are likely reluctant to push back too hard. China is a major producer of medical equipment, including half the world's supply of N95 respirators.

Donald Trump signs TAIPEI Act to support Taiwan’s international relations

President Donald Trump signed the TAIPEI Act, a bill expressing Washington’s support for Taiwan in strengthening its relationships with countries around the world. Amid the global health threat of Covid-19, the disease caused by the Corona virus that started in the central Chinese city of Wuhan, the US and China have clashed over Taiwan’s exclusion from WHO meetings. Taiwanese experts did manage to attend a WHO meeting in mid-February, without giving their nationalities. According to the TAIPEI Act, the US would advocate for Taiwan’s membership in all international organisations in which statehood is not a requirement and says Taiwan should be granted observer status in other appropriate international organisations.The US will also consider reducing its economic, security and diplomatic engagement with nations that take significant actions to undermine Taiwan.

Japan to set up Corona virus HQ, may be a step to emergency declaration

Japan was preparing a special Corona virus headquarters on March 26, which could set the stage for a state of emergency over the outbreak, local media reported, after the capital of Tokyo saw a sharp rise in cases this week. Chief Cabinet Secretary Yoshihide Suga told a news conference it was a “very critical time” for Japan to prevent a surge in the spread of the virus. Under a law revised this month to cover the Corona virus, the Prime Minister can declare a state of emergency if the disease poses a “grave danger” to lives and if its rapid spread threatens serious economic damage. The virus has increased Japan’s recession risk.

Economic

US jobless claims surge to record 3.3m as America locks down

More than 3million Americans filed a claim for unemployment benefits last week, a record high that offers the first nationwide picture of the damage to the US economy from the Corona virus shutdown. According to data released by the labour department on May 26, claims rose to 3.3million for the week ending Saturday, from 282,000 the previous week. It is by far the largest single-week rise in unemployment claims since the department began publishing records in 1967. The previous one-week highs came in October of 1982, at 695,000 claims, and March 2009, at 665,000.

IMF steering committee to consider doubling emergency pandemic aid

In a statement to the G20 leaders, IMF Managing Director Kristalina Georgieva asked G20 leaders to back a doubling of the $50 billion in emergency financing announced by the Fund in early March. To boost liquidity, she urged G20 leaders to support a “sizeable” SDR (Special Drawing Right) allocation, as was done during the 2008-2009 financial crisis, as well as expanded use of swap-type facilities at the Fund. Georgieva gave no specific SDR number in her statement, but observers to the G20 meeting said an allocation of up to $500 billion could be needed – twice the amount added a decade ago. Special Drawing Rights are the IMF’s monetary unit and are derived from a basket of euro, yen, sterling, yuan and dollars. Each country’s SDR allocation is based on the size of its IMF quota, or shareholding. G20 leaders did not explicitly address the issue, but in their joint statement said they supported IMF and World Bank efforts to help countries in need by “using all instruments to their fullest extent.”

How Asia has fought the economic fallout of Corona virus

While Asian tactics have often been less dramatic than the “bazooka” measures deployed in Europe and the US, they have still often involved cuts in benchmark interest rates to record lows and stimulus packages of unprecedented size. Some analysts say the best economic relief plans are those supporting small- and medium-sized companies. Other experts say the main goal should be to keep bank lending and avoid cash crunches. Singapore on March 26 unveiled a new S$48.6bn ($34bn) package, the biggest in its history. The People’s Bank of China has signalled it will gradually lower interest rates in the coming months. It has also cut the reserve requirement ratio for banks, allowing many of the country’s financial institutions to lend an additional RMB 550bn ($79bn) collectively. China is also discussing a savings deposit rate cut that would free up banks to lend more.

Insurance Industry could be ‘in jeopardy’ over virus claims, warns Lloyd’s chair

The chairman of Lloyd’s of London said the insurance industry could be “in jeopardy” if it was forced to pay out for Covid-19 claims that it never intended to cover. Insurers have said that infectious diseases are excluded from most business interruption policies, prompting fury from customers facing huge losses. Lawmakers in the US want the industry to soften its stance and pay out anyway.

Chinese Vice Premier stresses major projects construction, stabilizing investment

Chinese Vice Premier Han Zheng on March 26 called for efforts to advance the construction of major projects and give full play to investment in stabilizing economic growth. Accurate measures should be taken to solve the problems of labour shortage, transportation and supply of raw materials to accelerate the normal operation of key projects, Han said while addressing a teleconference on the construction of major projects and stabilizing investment. More work should be done to implement key foreign-funded projects, speed up the introduction of policies for further opening-up and continue optimizing the business environment, he added.

European banks back suspension of dividends and buybacks

The European Banking Federation has said the region’s lenders should stop hoarding capital for dividend payouts and refrain from share buybacks this year so they can lend more to companies and consumers hit by coronavirus. The move comes after the European Central Bank earlier this month said it would allow banks to operate with lower levels of capital in order to keep credit flowing to the economy during the Corona virus outbreak. Earlier this month, eight of the biggest US banks — including JP Morgan, Bank of America and Citigroup — said they were suspending their multibillion-dollar share buyback programmes until at least July, citing the “unprecedented challenge” from the Corona virus pandemic.

Medical

Australian researchers’ trial TB Vaccine to fight Corona virus

Australian researchers are fast-tracking large-scale human testing to see if a vaccine used for decades to prevent tuberculosis can protect health workers from COVID-19, they announced on March 27. "We hope to see a reduction in the prevalence and severity of COVID-19 symptoms in healthcare workers receiving the BCG vaccination”, said lead researcher Nigel Curtis. Similar trials are being conducted in several other countries including the Netherlands, Germany and the United Kingdom. "This trial will allow the vaccine's effectiveness against COVID-19 symptoms to be properly tested, and may help save the lives of our heroic frontline healthcare workers," said Kathryn North, director of the Murdoch Institute. She said the hope was that improving people's "innate" immunity against COVID-19 symptoms would buy time to develop a specific vaccine against the disease.

Supercomputers Recruited To Hunt for Clues to a COVID-19 Treatment

According to an announcement by President Trump on March 22, a newly established COVID-19 High Performance Computing Consortium will bring together industry, academic institutions and federal laboratories to try to identify or create candidate compounds that might prevent or treat a coronavirus infection. Supercomputers can solve calculations and run experiments that, if done on traditional computing systems would take months or years. High performance computers can work together and pass calculations between one another to process information more quickly. An early project by researchers at the University of Tennessee using IBM's Summit supercomputer at the Oak Ridge National Laboratory allowed researchers to use the supercomputers to screen 8,000 compounds to identify the 77 most likely to bind to the main "spike" protein in the coronavirus and render it incapable of attaching to host cells in the human body. Those 77 compounds can now be experimented on with the aim of developing a coronavirus treatment.