Congratulations Australia. We had no excess deaths between mid-February and the end of May according to a study.
That’s compared to a 37% increase in England and Wales, and a 38% increase in Spain, for example. They’re the worst performers in the study.
In fact, deaths in Australia actually fell relative to what was expected!
Not bad is it? Especially for a pandemic…
I better explain the details of the study before we get to what’s completely disastrous about the result.
The study was of 21 developed countries and published in the journal Nature Medicine. It was led by Imperial College in London. And the ‘excess deaths’ measures how many more people died than you would’ve expected normally.
The idea is that it’s hard to figure out who had COVID-19 and when. Especially when nations record their statistics differently. So, if you just measure excess deaths, you can get a reasonable idea of how many people the lockdown measures killed.
Pandemic, I mean.
How many people the pandemic killed, not just the lockdown…
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Anyway, Australia fared well, alongside New Zealand, Hungary, Czechia, Slovakia, and Bulgaria.
My question today is, now what? And I think it’s going to be a tough one to answer…
Consider, if Australia were to open its borders, what would happen?
The pandemic would likely strike Australia worst of all.
That’s what happened to the other nations sitting alongside Australia and New Zealand. Eastern Europe is in the grip of major outbreaks.
Czechia especially. Their excess deaths were well below what was expected in the study. But that was between February and May, remember. Now they’ve got the worst rate of infections in the EU according to the European Centre for Disease Prevention and Control. And, according to The Guardian, it’s even worse than their ‘worst-case scenario’.
Given the scenario was ‘advanced’ by a Czech epidemiologist turned politician, I’m not surprised they got it wrong. No two professions have been as humiliated by the pandemic as those two.
Meanwhile, Sweden, the nation most criticised for its lack of lockdown, and which saw a mid-level amount of excess deaths in the period covered by the study, is doing rather well of late.
But back to our real topic. Australia escaped COVID-19 comparatively unscathed. Largely by avoiding an outbreak in the first place. By shutting borders to its own citizens, keeping them confined in a hotel room without windows, and using the military to guard them.
The thing is, we can’t open borders now. Or we’ll just be the next poster child of disaster. Alongside Eastern Europe.
We’re stuck.
So, what if Australia doesn’t open its borders?
Can we go on like this?
Will we be left behind by the global economic recovery? Will our economy get dragged under by the lack of tourism and business travel? Will we have to live in fear of imminent outbreaks and lockdowns each time restrictions are eased?
You can see where I’m going with this now, can’t you? Australia has escaped COVID-19 rather well. Great. But we’ve painted ourselves into a corner by doing so.
We can’t recover from the pandemic, because we haven’t really had it. Yet.
And, when we do have it, another wave of economic chaos will be unleashed. While other nations around the world are already on the path to normality, Australia is yet to experience the pandemic.
The solution to this obvious conundrum was supposed to be the end of the pandemic. Or a vaccine.
I don’t see either happening anytime soon…
And neither are likely to be effective constraints against a new outbreak either. Vaccines will have limited effectiveness and further waves are surely only a matter of time away in a country that didn’t have a real first wave.
While other nations are establishing ways of dealing with the virus, Australia will be left behind. And left in fear. For years to come, perhaps. If it takes that long for the virus to strike.
The good news is that we’ll get better at combating the virus when it does come. Despite the politicians and epidemiologists’ mistakes — we might learn from others’ mistakes. Fatality rates will decline and be very low here. And we might get a more organised response to outbreaks than other nations saw.
The bad news is, our economy is the collateral damage in all this. And, while much of the world has gone for a short and sharp contraction, Australia’s vulnerability to future COVID outbreaks will drag it down. For longer than elsewhere.
COVID is coming for you. And waiting for it is not going to be very nice.
What does this mean for investors? Well, anyone putting money to work in the Aussie market is asking for trouble. Because a major outbreak could strike at any point, undermining stocks again.
You’re better off buying in countries that have the worst behind them. Or buy investments that benefit from COVID-style chaos.
Until next time,
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Nickolai Hubble,
Editor, The Daily Reckoning Australia Weekend
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