Forced business closures, obliged vacations and other restrictions can cost the Ukrainian economy from 3% to 5% of GDP each month. In addition, epidemiologists believe that the fight against the virus is a marathon, not a sprint, and outbreaks can occur even next year, no matter how severe the quarantine.
Economists of the Centre for Economic Strategy (CES) joined efforts with former Deputy Minister of Health Pavlo Kovtoniuk and prepared a detailed policy brief on the quarantine exit strategy with reference to the WHO’s recommendations.
The strategy’s principles are the minimum possible restrictions based on a clear assessment of the epidemic situation in a particular area (through mass testing), compensation for negative consequences, the application of strict sanitary standards in all spheres of public life and informing citizens widely and honestly.
This strategy proposes three quarantine modes that can be applied to particular areas – yellow, red and black. It should depend on the number of cases detected and their nature – single imported cases, clusters or non-traceable local distribution. In the policy brief, CES suggests specific sets of measures for each of the modes that would be most effective at the lowest cost to society.
To begin easing quarantine, the state must provide four basic requirements: a strong network testing system, capable hospitals, protective equipment for health workers and others who often interact with people, a strategy for informing people in the regions and nationally.
Our approach to the quarantine exit strategy was used by the government, however, we believe that there is still room for improvement in the timing and sequence of the stages needed to revitalize the economy.
The quarantine exit strategy continues a series of CES publications aimed at developing anti-crisis solutions for Ukraine. Since the first infection cases in Ukraine, our think tank joined a collective letter to the government regarding priority measures against the crisis, prepared policy recommendations on support mechanisms for SME and employees, made a statement about a threat of sovereign default which was joined by other think tanks and also supported the idea of an anti-crisis package of economic measures. In addition, CES joined two public letters to the authorities regarding the way to overcome the crisis with minimal damage to the economy and the importance of easing quarantine restrictions on economic activity.
In its proposals, our economists relied on their own analysis of the macroeconomic situation in Ukraine, national statistics, as well as practices to support the economy, people and health care system in crisis, which were applied by other countries.
Our efforts had an impact — most of the recommendations were taken into account in governmental anti-crisis packages to help SMEs and employees. However, it is crucial that the Ukrainian authorities renew cooperation with the IMF to keep macroeconomic stability, to finance a tripled budget deficit and successfully repay peak debt payments.