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Bouncing back

Resilience is a crucial asset in a crisis


Understandably COVID-19 has got everyone talking about economic resilience. Ok probably not everyone, but definitely economists. So COVID-19 has got at least 0.01% of people talking about economic resilience.


I'm not a reactionary and don't automatically buy arguments like "COVID-19 has proven that we need to spend trillions preparing for pandemics". Something bad happening doesn't automatically imply we need to pull out all the stops to prevent it from happening again. The costs of preparing must be worth the benefits. Of course initiatives like social distancing, containment or having adequate negative pressure rooms are sensible, but demands on funds are endless, so money must be spent well.


There is definitely a need to identify key sectors and mechanisms supporting economic and social resilience, and define well in advance how sustaining these sectors will be achieved in a disaster. That is the point of this post. Access to the necessities of life is one area where resilience is required, the other that stands out from COVID-19 is population resilience and mental health.



Oscillations are a normal part of the economic cycle, we can't stop all of them, but some challenges are so great and destructive that we must be prepared. I don't think these challenges are defined as "pandemics", "natural disasters" or "economic downturns" but are the outcomes of what can happen if events are bad enough. The loss of necessities - food, water, medicine and shelter. What would we do if there was a sustained water shortage? There are multiple ways we could lose access to necessities, and economic resilience is about ensuring this doesn't happen.


Maintaining access to necessities is vital for resilience


COVID-19 has put global supply chains at risk, potentially compromising access to basic material items. In China, we have seen the supply chain for medical devices and drugs compromised at exactly the wrong time. There is the risk of transmission through the supply chain if the disease is "carried" between places and people on material goods. In that situation, it may not be possible to rely on the usual channels for sourcing necessities.


While what we are experiencing through COVID-19 is terrible economically, shortages in the stuff we need to survive have been limited. There have been empty shelves in supermarkets, which is largely a reflection of panic buying, but it could be much worse.


There are a couple of ways to think about resilience. One is the need to bounce back from an immediate hit to resources and production (eg disaster response to an earthquake). Another is about enabling recovery (eg rebuilding after an earthquake). They look quite different.


Using a major earthquake as an example, the immediate response might require a store of resources to enable survival. That could mean having water stored in dams or bottles. At two liters of water a day, 10 million liters of water would be necessary to support the survival of a million people for five days. The long-term recovery response could mean having sufficiently skilled people who can help with engineering and construction to rebuild over the long-term.


Maintaining sufficient access to resources through a crisis is crucial. As a rule of thumb, having the resources available domestically would be preferred. But we live in an interconnected world with an interconnected economy. For many countries it isn't realistic to provide for all necessities domestically as they rely on trade - however, trade may be compromised if global supply chains are at risk.


The amount of resources necessary depends on the size of the population affected, the resources they require, and the length of time over which that population needs to be sustained. Governments are typically the entities best placed to determine resource resilience requirements.


Population resilience is most crucial in a crisis, but also the hardest to create


A society is only as strong as its people, and if people can't handle the crisis that will compromise resilience and recovery. Looking after people's material well being is part of this, but so is their mental health and the extent to which they are enfranchised by society. Massive inequality for example can compromise resilience if people feel that society is unfair. Why would you rebuild something that's broke? Ensuring resilience through mechanisms such as adequate public healthcare and material well being is crucial ahead of a crisis. Realistically it is too late to be building population resilience in a crisis because of the time it takes to develop.


Lockdown exhaustion is real. Keeping people confined for long periods is unnatural and over time people can't deal with it. While that has been the remedy prescribed in the case of serious COVID-19 outbreaks, it's not a viable long-term solution. Over long periods even the strongest snap. This is part of why a line of defense that can handle ongoing cases is so important - contact tracing, extensive testing, a risk-based approach, consistent mask use, etc.


National leaders are critical in a crisis to help people through. People like Trump who routinely get things wrong or lie aren't helpful. Leaders who demonstrate empathy and develop mechanisms to communicate well with their population and support them can make a big difference. In NZ we have seen that through clear communication around restrictions and alert levels, daily updates, and demonstrated understanding of the hardships.


Developing resilience is not straight-forward. It's both about trying to prevent a crisis, and acknowledging that not all disasters can be predicted and stopped. So when a crisis inevitably does happen, there are recovery and adaptation measures to help people rebound. Connectivity is critical to this with those who are less affected in a crisis needing to step up to help.



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A New Zealand based politics and economics blog

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