Opinion – What lays ahead

These are challenging times for public health and the economy. Macau has until now been spared the full brunt of the coronavirus epidemic. A combination of measures restraining public interactions and potential exposure to sources of infection, and a bit of luck, has prevented worse consequences. We can only hope that this is the worst that we will see, and a more severe health crisis can be averted. 

Unfortunately, in mainland China, the situation is much more complicated. The mortality caused by the virus seems to be small; namely, if compared with the most obvious standard of comparison, SARS. However, it appears much more contagious, and, regretfully, total mortality has already exceeded that of SARS. 

Hard containment approaches led to the quarantine of Wuhan and other cities. How effectively can one close cities and regions harboring millions of people is being tested ‘live’ without much, if any, guidance from precedent. How effective it will prove and how many unexpected side-effects, including in other matters of public health, is still not evident. 

Worrying unknowns persist. The transmission profile is yet not fully determined. People may be infectious for a couple of weeks (or more) without symptoms. How many moved around before the problem was realized and finally addressed is a big unknown. If its spread is not checked shortly, the situation for neighboring regions and countries may yet deteriorate.

The economic effects will be substantial. They will affect the Chinese economy in ways that are still difficult to fathom properly. But they will not really spare anyone at a time of strong integration of the world economy. Inevitably, the longer the crisis lasts, the harder the recovery will be.

On our side, the effects are already unprecedented and are hard-hitting for the sectors that mainly provide services for tourists. The full closure of our primary source of income, the casinos, is being followed by the closure of one hotel after the other. Small businesses, namely in retail and restaurants, not to mention then travel industry, will be bumped hard. Most public services are operating at their bare bone level. 

Losses will be high for all those that depend on actual visitor numbers. How long can this last without severe long-term damage to the economy is a guess no one wants to make now. It is high time we think carefully about the uses of the financial reserve, for the purpose it was meant for: facing the bad years.