Asian economic growth grinds to sixty-year halt on coronavirus pandemic, US adds five million more jobless

CORONAVIRUS ALERT 4/16/2020

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In top stories today:

  • Economic growth in Asia will come to a halt for the first time in sixty years as the region grapples with the coronavirus outbreak, the International Monetary Fund (IMF) said. More than five million new jobless were added to the US economy in a week. Japan declared a state of national emergency and plans cash payments for each of its citizens.
  • QUOTE:  “The impact of the coronavirus on the region will be severe, across the board and unprecedented,” said Chang Yong Rhee, the IMF’s Asia director, the Financial Times reported. “Unlike during the global financial crisis, Asia’s real sector, especially the service sector, is being hit hard by containment measures of the coronavirus pandemic.”
  • Economic growth in Asia will grind to a halt for the first time in sixty years because of coronavirus, Rhee said at a briefing about the region, the Financial Times reported. The slowdown is set to be worse than the financial crisis of 2008 to 2009 and the Asian financial crisis in 1997, he said.
  • In Japan, where infections from coronavirus have been doubling every eight days, Prime Minister Shinzo Abe declared a nationwide state of emergency and set out plans for legislation to give everyone in the country nearly $1,000 in cash, The Wall Street Journal reported.
  • Singapore reported its highest daily increase in new cases on April 15, about 90 percent of the 447 new cases linked to dormitories housing low-wage foreign workers at close quarters, Bloomberg reported.
  • President Donald J. Trump will release national guidelines on April 16 about reopening the economy, he said during a press briefing, CNBC reported. Public health officials warn that it’s too early for a widespread opening up of public life, the New York Times said.
  • An extra 5.2 million Americans joined the ranks of job seekers last week, taking the total in the past month to an “astounding” figure of more than 20 million, Reuters reported. That follows dismal figures on April 15 that showed the biggest drop in factory output since 1946 and a record drop in retail sales last month, the newswire added. Economists surveyed by Reuters expected the jobless numbers to come in at 5.1 million.
  • The five biggest US banks have set aside $24 billion in loan-loss provisions as of the first quarter, almost five times more than in the previous three months, as they brace for “a potential tsunami of bad loans,” as Quartz puts it, citing FactSet data.

“CHORUS OF DISAPPROVAL”

  • Reactions continued to an announcement by the US president earlier this week. The World Health Organization (WHO) expressed regret at Trump’s decision on April 14 to stop funding the United Nations public health body, the Financial Times reported. A “chorus of disapproval” from at home and overseas greeted Trump’s decision, the newspaper said.
  • QUOTE: “This is a time for all of us to be united in our common struggle against a common threat, a dangerous enemy,” Tedros Adhanom Ghebreyesus, WHO’s director-general, told reporters, the Financial Times reported. “When we are divided the virus exploits the cracks between us.”
  • “Face masks may be ‘new normal’ in post-virus life as U.S. prepares gradual reopening,” reads the headline to a Reuters article. The US death toll from coronavirus approached 31,000 on April 15 as the governors of Connecticut, Maryland, New York, and Pennsylvania ordered or recommended that people wear face masks as restrictions are lifted in the weeks ahead, the newswire said.
  • The statistics say… 30,885 people had died from coronavirus in the United States as of late April 15, among them four thousand newly attributable to the disease in New York City to include “probable” cases. More than fifty health workers have died from the virus, at least sixteen of them in New York State, Reuters reported.
  • Some US business leaders complained that efforts by the White House to reopen parts of the country are haphazard and that mass testing is needed before restrictions can be lifted, the Washington Post reported. Trump spent most of April 15 on phone calls with those he named to a newly formed external advisory council that’s devoted to the issue, the newspaper said.
  • Trump spoke to more than 200 leaders from “nearly every corner of the U.S. economy” in four calls to get their ideas about reopening the country, Bloomberg said. Finance-industry executives told him more testing will be needed before people are comfortable about going back to work, the newswire reported.
  • QUOTE: “We see as a country, we’re improving. We see as metro areas, we’re improving. We see as communities, as counties and as states, we’re improving,” said Deborah Birx, among the top public-health experts on the White House coronavirus task force, Bloomberg reported. “But that also still requires everyone to continue to social distance.”
  • Arkansas, Hawaii, Maine, Montana, Nebraska, North Dakota, Vermont, West Virginia, and Wyoming: those states had fewer than 1,000 confirmed cases of coronavirus as of April 15, the Washington Post reported. Some states with smaller outbreaks may be able to open up more quickly, said Birx, the newspaper reported.

DRONES, ROBOTS

  • Member nations of the Gulf Cooperation Council, Saudi Arabia, and the United Arab Emirates among them, are boosting their use of artificial intelligence to stem the spread of coronavirus, CNBC reported. Speed cameras, drones, and robots are part of efforts to monitor lockdown restrictions, CNBC said.
  • The coronavirus outbreak in the Middle East threatens to upend the lives of millions of destitute people living in conflict zones and could fuel socio-economic upheaval in the region, the International Committee of the Red Cross said, Reuters reported.

“FRESH DIVISION”

  • A “fresh division in the global response to the crisis”—that’s how the Financial Times describes resistance by Trump’s administration to urgent calls from leaders in Africa and Europe for the IMF to provide extra help to emerging markets. Those leaders have called on the IMF to create extra reserve assets to help those low-income countries to cope with the pandemic, the newspaper reported. That liquidity boost is a point of friction in multilateral talks before the IMF and World Bank hold spring meetings online this week, the Financial Times said.
  • Many Latin American and Caribbean countries have officially extended their respective quarantine measures, e.g. Argentina (April 26), Chile (extended until April 23 in some regions and scaled back in others), El Salvador (April 29), and Venezuela (May 13), Mexico (April 30), Colombia (April 26), and Peru (April 26). The economic outlook revealed by the IMF suggests a dire scenario for Latin American countries in 2020, as all regional economies are expected to contract although with varying degrees.
  • The coronavirus outbreak in the UK may be approaching the peak, Bloomberg cited the country’s Chief Medical Officer Chris Whitty as saying on April 15. The UK is expected to extend a lockdown that’s been in place since March 23, the newswire reported. Health Secretary Matt Hancock set out measures including more testing in response to concerns that care homes have been neglected during the crisis, Bloomberg added.
  • READ MORE: “[M]any emerging market and developing countries have seen a net portfolio capital outflow of $100 billion in the past two months; and those exporting oil have been hurt by the collapse in prices,” wrote the Atlantic Council’s Hung Tran. “They have meager domestic resources to respond in a scale commensurate with the needs.”

LOCKDOWN VS LIFT

  • UK ministers and their advisers lack a coordinated exit plan for the coronavirus lockdown because the absence of Prime Minister Boris Johnson as he recovers from the virus hampers a joint approach, even after the chief medical officer said the country is “probably reaching the peak” of the outbreak, The Guardian reported. “Shortage of Protective Gear in U.K. Stokes Anger With Government,” reads the headline to a Bloomberg story.
  • The Guardian publishes an illustration of exit plans begun in Italy, Spain, and Austria, as well as plans announced by countries including France and Denmark. Reuters has a Factbox too but summarizing worldwide plans to ease restrictions around coronavirus, from Italy to Argentina, Iran to Pakistan. The World Health Organization warns that lockdowns should only be eased slowly and “only when there is capacity to isolate cases and trace contacts,” the newswire reported.
  • Germany plans to reopen shops of up to 800 square meters on April 20, but with strict curbs on social distancing, and some schools from May 4, the Financial Times reported. That announcement gives a “small chink of light” amid otherwise grim news, the newspaper cited Lee Hardman, currency analyst at Mitsubishi UFJ Financial Group, as saying.

SUPPLY CRUNCH

  • Supply lines for essential food and medical supplies face their biggest stress-test since World War II amid bidding wars and new trade barriers as officials come under pressure to secure goods, Bloomberg reported. “In short, the backbone of global trade needs reinforcement before anyone can think of moving on from crisis-mode to recovery,” the article said, citing an urgent need to secure the world’s food chain too.
  • QUOTE: “The crew aren’t supposed to stay on ship in perpetuity,” said Scott Bergeron, director of business development and strategy at Oldendorff Carriers, Germany’s biggest transporter of commodities such as grain, coal, and fertilizers. The company has 700 ships and 4,500 workers, some of whom haven’t gone home for months, Bloomberg reported. “The equivalent is like a doctor or nurse being told, ‘You can’t go home at the end of your shift, you’re at the hospital until the crisis is over.’”
  • Face masks, test kits and other medical supplies ordered by the US languish in Chinese warehouses because of a lack of official clearance for shipment, The Wall Street Journal reported, citing diplomatic memos, brokers and companies.

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