Travel bans put global economy on the verge
US-prompted chaotic responses to COVID-19 hamper interconnectivity
Published: Mar 13, 2020 10:38 PM

People wear protective face masks as they walk down Whitehall in the Spring sunshine on Wednesday in central London. The Bank of England slashed its interest rate to a record low 0.25 percent on Wednesday as part of coordinated emergency action with the UK government to combat the economic fallout from the coronavirus outbreak. Photo:AFP

The novel coronavirus' rapid spread throughout the world brought with it a wave of panic and nativism, fueling a flurry of uncoordinated and chaotic responses from a rising number of countries led by the US, with restrictions on global travel and trade that are not only ineffective in addressing the world public health crisis but will also have serious economic and social ramifications for the highly globalized world for years after the pandemic, global organizations and analysts said on Friday.

The sweeping restrictions, which came despite the US' clear failure to stop the virus with its preemptive ban on visitors from China and in complete disregard for China's effective experience, further sowed chaos and panic throughout the world and highlighted loopholes and a serious deterioration in the global governance system, which has been battered by rising nationalism and protectionism over the past few years, and underscored the dire need for an efficient mechanism to coordinate response to global crises, in which China can play a larger role, analysts noted. 

Rising isolation

Following the US' 30-day ban on visitors from 26 European countries on Wednesday, a slew of Latin America countries, including Argentina, Bolivia and Peru also moved on Thursday to impose various restrictions on travelers from dozens of countries including the US, China and Italy.

While the move might be the easiest option under such a desperate situation and might offer "some help" to contain the virus, it could deal a major below to Latin America, which is already facing serious economic and social challenges and betting on bringing more tourists and investment from China, the US and Europe, according to Zhou Zhiwei, a senior researcher on Latin American studies at the Chinese Academy of Social Sciences.

"The restrictions will have a massive economic impact on Latin America because they will also disrupt trade and investment with all its major partners, including China, the US and Europe," Zhou told the Global Times on Friday.

Many countries in Europe, including the Czech Republic, and in Africa such as Uganda, also imposed new restrictions on visitors from countries like the US and those in Europe. As of Friday, just as the coronavirus had spread to every continent except Antarctica, there were also restrictions on travel at major transport hubs in almost all continents.

The immediate impact of the widespread restrictions will be felt by travelers, airlines and businesses, while the more serious and lasting ramifications will be felt by the world over time, according to the International Air Transport Association (IATA).

"Under normal circumstances, air transport is a catalyst for economic growth and development. Suspending travel on such a broad scale will create negative consequences to the economy. Governments must recognize this and be ready to provide support," Alexandre de Juniac, IATA's Director General and CEO, said in a statement sent to the Global Times on Friday.

Global airlines employ about 2.7 million people and are under serious financial and operational pressure, and the crisis could wipe out $113 billion in revenue for airlines even before the US measures, according to IATA. In 2018, there were 4.3 billion passengers on 38 million flights worldwide, contributing $2.7 trillion to global GDP, latest data from IATA showed.

Canceled flights also mean disruptions to business trips, conferences and other activities that generate trillions of dollars each year and, coupled with other factors such as cost-cutting, could change the way companies conduct business by cutting back travels and overseas projects, analysts pointed out. Another deepening concern is that the restrictions fueled already rising protectionism and anti-globalization forces around the world. 

That explains why the new US measures failed to calm skittish financial markets. Following a speech by US President Donald Trump on Wednesday night, US stocks tumbled further into bear market territory on Thursday and is headed for the worst week since the global financial crisis of 2008. Equity indexes around the world from Europe to Asia have also tumbled. The global economy is now at risk of falling into recession. 

However, unlike 2008, when G20 leaders convened emergency meetings and came up with a concerted stimulus package, there have been no concrete collective actions taken by the global community, although officials vowed a coordinated economic approach after recent meetings of the G7 and G20.  

"This is a public health crisis, so what the global governance mechanism can do is very limited. That is why we are seeing many countries taking the matter into their own hands," Chen Fengying, a research fellow at the China Institute of Contemporary International Relations in Beijing.  

An illustration of global travel restrictions amid COVID-19 Photo: GT

Restrictions ineffective 

By unilaterally imposing restrictions, countries also disregarded repeated guidance and recommendations from the World Health Organization (WHO), which advised against countries restricting travel or trade, arguing such moves are ineffective in containing the virus. 

"Evidence shows that restricting the movement of people and goods during public health emergencies is ineffective in most situations and may divert resources from other interventions," the WHO said, adding that the restrictions could interrupt aid and technical support to contain the virus. 

Some countries like India, Germany and France have also imposed restrictions on exports of medical components and other supplies, as massive demand caused a global shortage in medical supplies and protective gear in many countries. 

Another stark reminder that restrictions on travel cannot stop the virus is the fact that Italy and the US, which are now facing serious epidemics, were among the first countries to impose a travel ban on China.

"Completely restricting [travel and trade] is counterproductive to [containing] the epidemic, to the economy and other areas," Cai Jiangnan, director of the Center for Healthcare Management at the China Europe International Business School, told the Global Times on Friday, adding that global efforts should be coordinated under the WHO and China can offer its experience and aid to other countries.

China has refrained from taking restrictive measures on global travel and trade, while relying on strict quarantine measures domestically, and has repeatedly called for global cooperation. As the domestic situation improves, China is stepping up to help other countries by sending medical supplies and medical teams to severely impacted countries and regions.

Geng Shuang, a spokesperson for the Chinese Foreign Ministry, on Friday reiterated China's support for the global multilateral system in handling the pandemic and called on others to scrap unilateral actions.

"[China] will firmly preserve an open world economy. Anti-epidemic measures taken by countries will inevitably impact trade and investment, but we should try to ease trade tensions and lift unilateral tariff measures," Geng told a press briefing on Friday.

While the pandemic and the restrictions may have posed a challenge to global governance and economic globalization, it would not be able to reverse the trend, analysts noted.

"It is simply unrealistic that someone or something could reserve the trend of globalization that has been formed for a long time. Improvements are needed, but they won't end," Chen said.