April 24, 2020

News in Charts: Taiwan’s response to COVID-19 highlights link between health and wealth

by Fathom Consulting.

The spread of COVID-19 has had a devastating effect across the globe. At the time of writing, there were more than almost three million confirmed cases and almost 200,000 fatalities. The virus first originated in Wuhan, China. It has since spread to almost every corner of the globe, threatening the healthcare systems of countries many miles away. It is notable, however, that it has had less of an impact among China’s near neighbours. Fatalities have been relatively low in other Asian countries when compared to those in Europe or the US. Taiwan, in particular, stands out as a star example in responding to the virus. Despite very close links with mainland China, it has suffered just six fatalities so far, with the last one occurring two weeks ago.

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Taiwan’s early response at the onset of the crisis appears to have made the difference when compared to other countries. The government, having experienced previous pandemics, was quick to issue health guidelines as well as providing PPE such as face masks. In 2019, Tawian received 2.7 million visitors from mainland China. In January, the month that Wuhan went into lockdown, visitors from the mainland totalled 91,000. By February, that figure had dropped to just 6,000 — a period that coincided with the Lunar New Year and which is usually associated with increased visits. Moreover, the government tracked its own citizens and foreign residents for recent travel history to known hotspots and made this information available to hospitals and pharmacies. This meant that people who contracted the virus abroad were isolated before they could infect meaningful numbers in the community — a process that helped to prevent ‘community spread’.

 

 

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Taiwan’s quick response to COVID-19 has not only delivered better health outcomes, it should prove beneficial to its economy, too. Admittedly, in a globalised world, no country will be immune from large negative shocks to economic activity abroad. Taiwan’s export sector faces severe headwinds. However, most of the economic costs associated with COVID-19 relate to social distancing measures that mean people have to stay at home and businesses cannot open. Taiwan’s better health response means that this will be less of a problem there. Its manufacturing PMI was 50.4 in March, above the level associated with expansions. Meanwhile, Industrial production has held up much better than in China or the US. Taiwan offers a best-in-class approach to the virus. While that does little to help those countries that reacted late and are suffering much worse outbreaks, it does provide a roadmap for all countries going forward.

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