Sweden takes the big coronavirus risk for none of the economic gain

If we’ve learnt anything about the COVID-19 pandemic, it is that history may not repeat but it does have a habit of popping its head up and asking, ‘Remember me?’

The history of Australian government is characterised with good intentions marred by parochialism and petty power struggles that serendipitously led to reasonable if not ideal outcomes.

A century ago, states began closing their borders as the Spanish Influenza pandemic kicked off in earnest in Australia in January, 1919.

Being an enormous island at the bottom of the world, Australia had the benefit of watching the Spanish Influenza pandemic unfold almost everywhere else and sensibly decided to take steps to diminish its impact on what was then our four million population.

The pandemic’s origins were probably somewhere in the continental US. Kansas City may have been ground zero for the Spanish Flu pandemic. It certainly wasn’t Spain. The pandemic merely assumed its Castellano nomenclature because it infected the Spanish monarch, King Alfonso XIII early doors. He survived it and was probably lucky to do so. The Spanish Royal Family genealogical chart was more stick than tree and monarchs came and went displaying the type of inbreeding we see in French bulldogs today.

Many of Alfonso’s countrymen and women dropped like nine pins. A lot did not get up. The influenza strain scaled the borders into war torn France and then into England not long afterwards and it was away.

The first diagnosed case came from a US military base in Kansas City. But virologists are uncertain if that US serviceman was Patient One. More than likely US servicemen entered Europe with one strain of the flu only for it to mutate into the nasty Spanish variety

A century later and we still can’t be certain what kicked off a pandemic that killed an estimated 50 million people, more than double the number of deaths, military and civilian, from World War I.

Back in Australia, great meetings between the states and the Commonwealth took place. Seven days’ quarantine was required for anyone entering the country, including many returning servicemen from Europe.

With several ceremonial strokes of the pen, the states happily ceded control for the national management of the pandemic to the Commonwealth. An agreement was signed in Melbourne in November 1918 just weeks after armistice, giving the Commonwealth the capacity to close state borders based on reports of outbreaks from the states’ Chief Medical Officers.

The country was ready. All things being equal, we could not have been better prepared.

And then it all went to hell in a moment.

In January 1919, a soldier was diagnosed with Spanish Flu in Sydney and, as was required under the November agreement, New South Wales notified the Commonwealth and the state was proclaimed infected. The problem was the soldier had travelled by train from Melbourne but as the Victorians had not informed the Commonwealth, New South Wales angrily closed the borders and sent its own wallopers to prevent any crossing of the Murray.

The agreement was hurled into the bin and from then on it was every state for itself.

Queensland closed its borders. Where crossings of the Tweed were permitted it came at a price and tourists and returning soldiers were required to quarantine in camps and enjoy the Queensland sun banged up while enduring enforced injections and ten minute stints in a respiratory chamber. The Queensland government knocked out a women’s toilet. Ah, Queensland. Beautiful one day, a leper colony the next.

It may have made some sense to close off Tasmania It probably made sense to isolate Tasmania which subsequently suffered relatively few infections and just 171 deaths. But the Tasmanians were unhappy with iso and many protested insisting that quarantine of travellers across the Bass Strait be reduced from seven days to four. Tasmania may have been spared the

The South Australian government shut its borders and ad hoc camps were established that the state refused to even acknowledge let alone ensure decent accommodations.

When NSW put the shutters up, Western Australia was cut off from the rest of the country at least by rail amid the predictable calls for succession.

There and in the Northern Territory, death rates in remote indigenous communities from Spanish Influenza were as high as one in two.

Across the country, returned servicemen were denied their homecoming parades. Family reunions were delayed which set many servicemen to seething. After what they had endured on The Western Front, who could blame them? Many jumped quarantine, only to find churches, theatres and worst of all, pubs shut.

If it sounds like COVID-19 management by the states is a routine rerun of history, you’d be wrong because Victoria did not impose any restrictions on its people. Wearing face masks was encouraged but not mandated and there were no restrictions on travel interstate which wasn’t of much use because the borders were closed by wallopers from other states.

Still it flies in the face of the People’s Republic of Victoria today where one might expect one day to see a large wall traversing the Murray visible from the lunar surface. Construction funded by you know who.

But here’s the thing, immunologists with the benefit of 100 years of hindsight will tell you that state border closures on the mainland made no difference to the spread of Spanish Influenza in 1918-19.

Of course, there was no air travel and clearly less traffic crossing state borders than there would be now but the fact remains, the states ignored expert opinion then and did as they pleased, driven more by a sort of Sheffield Shield of hollow boasts and bitter recriminations which infected our history then and taints our present now.

It might be that the COVID-19 track and trace programs the states have in place are limited by the old jurisdictional bunfights which really would be a case of history repeating. If so, they should say so rather than deflect questions with specious reasoning and contradictory medical opinion.

In the end, Australia suffered 13,000 deaths from Spanish Influenza. The toll was low, almost negligible compared with the great cost to the nation of the staggering casualty rates from the battlefields in western Europe in what was then referred to as The Great War. 

Just as then it is difficult to understand now why state premiers pulled the drawbridges up. It is even harder to figure why they remain up today. What we do know is our state premiers don’t bother too much with history.

This pandemic has a way of turning accepted truths on their heads.

We’ve all seen or heard commentators supportive of the Swedish approach, donning the Nordic gold cross on blue background in beanies and scarfs to cheer them on.

There has been a bit of nonsense spoken about the Swedish approach. It has been driven largely by happenstance rather than design. The Swedish Constitution does not allow for lock downs by political edict.

There is encouragement to social distance, for people to work from home especially if they are in high risk categories. Usage of Stockholm’s public transit system is down 50 per cent whereas in Sydney in April it was down almost 90 per

Nevertheless, the theory from the barrackers goes that Sweden’s economy is churning on throughout the pandemic. Bars and restaurants are open. Everyone is having a good time.

I am sad to say, the data is coming in now and it is not looking good.

A Danish study released earlier this week revealed that Danish consumers in lockdown conditions similar to those in Australia and elsewhere around the world reduced their spending by 29 per cent. In Sweden with no mandated lockdown, it was 25 per cent.

The study was taken from 860,000 people across both countries who are active customers with Danske Bank, the second largest bank in Scandinavia and measured spending of EFTPOS and ATM transactions, bill and invoice payments and cash withdrawals. It is broadly representative of both populations.

The fact that all three authors of the report are economists might give us pause. You could put four economists in a room for a couple of hours and they would emerge with six different theories. The fact that all three authors are Danish economists might speak of a bit of Scandinavian one-upmanship.

People keeping social distances at a shopping centre in Stokholm. Picture: AFP

But the data doesn’t lie. The difference between two like countries, one with lockdowns, the other without, indicates the difference in consumer spending was next to nothing.

The study shows people will naturally reduce their spending in times of pandemic. It is the virus itself not the lockdown which causes the greatest harm.

Sweden’s central bank, the Riksbank, provided two possible scenarios for the country’s economic outlook for the remainder of the year, based on two models for the extent of the pandemic, one with recovery commencing in the third quarter, the other with the effects of the pandemic continuing into 2021.

In the first scenario, gross domestic product is predicted to contract by 6.9 per cent in 2020 before rebounding to grow 4.6 per cent in 2021. In a more negative prediction Sweden’s GDP could contract by 9.7 per cent with recovery limping along at 1.7 per cent in 2021.

The forecasts in Denmark from Danish Financial Institution, De Økonomiske Råd adopted the same two scenario approach, one with the affects of the pandemic easing this year forecasting a 3.5 per cent decline in GDP in 2020, the other more gloomy scenario, a 5.5 per cent decline.

On these figures, it would seem Sweden has taken all the risks for no economic benefit.

The shining light of redemption comes in the form of what Sweden’s Chief Epidemiologist, Dr Anders Tegnell, this week predicted was herd immunity in Sweden’s capital, Stockholm “within weeks”.

For the record, as of yesterday there were 28,583 diagnosed cases of COVID-19 in Sweden with a population of 10.3 million. There were 10,188 diagnosed cases in Stockholm with a population of 975,000. The death rate in Sweden is 342.6 per million people, lower than France (414.78), Italy (514.5), the UK (488.6) and Spain (579.7), but higher than Denmark (92.0).

The Swedish approach to COVID-19 is to promote herd immunity in the absence of a vaccine. Many immunologists believe it may not be possible given SARS-CoV-2’s novelty and potential for mutation.

A woman walks through the Kungstradgarden in Stockholm. Picture: AFP

What is starting to become understood is the rate of COVID-19 infection needs to be around 70 per cent for herd immunity to kick in.

In another study published earlier this week, this one of an epidemiological investigation by the Pasteur Institute, 4.4 per cent of the French population – or 2.8 million people – were found to have been infected with the SARS CoV-2 virus. The official number of recorded cases as of yesterday was 180,000. The study showed the infection rate is estimated at 15 times that of the number of diagnosed cases.

In Australia, Chief Medical Officer Professor Brendan Murphy puts the figure at around ten times the recorded cases of infection, somewhere around 70,000. It may actually be a lot less given the dribble of diagnosed cases across the nation in the last week.

Putting the French study figures across New York City’s recorded cases, there is an infection rate of 63 per cent. Still too low for herd immunity to occur and look at the carnage: 27,463 deaths as of yesterday. And those are just the deaths that occur in hospitals.

People enjoy the warm weather as they sit at Kungstradgarden in Stockholm. Picture: AFP

As an aside, there is another study, or series of studies that confirm there have been no recorded cases of transmission from children aged 10 or below anywhere in the world.

That’s around 3.3 million Australians. They should be at school. They need to be taught face-to-face to continue the development of critical literacy and numeracy skills and they need to continue peer group interaction to develop critical social and emotional skills.

But let’s get back to Sweden. For herd immunity to occur in Stockholm alone, there would need to be 690,000 people infected or 67 times the number of recorded or diagnosed cases to date with a death rate at 0.005 per cent.

Herd immunity in Stockholm in weeks? It seems most unlikely.

The Swedes undertook their unusual approach to the pandemic not on the basis of reducing economic hardship but because their health experts genuinely believed that it offered the best possible health outcomes for the Swedish people.

What is clear is, Sweden’s barrackers have got the first part of the equation wrong. Sweden is headed for a similar size descent in economic activity despite not mandating lockdowns or social distancing.

The second part of the equation, the development of a regionally restricted herd immunity is as yet to be seen but in the unlikely event that it does come, it will have come with at least as much economic misery as there is anywhere around the world.

This column was first published in The Australian 15 May 2020