Opinion

Welcome to the Coronavirus State of Israel and Its Standstill Economy

Italy is giving us a taste of what may happen if and when the coronavirus reaches Israel, but in our case the lockdowns may be much more devastating

South Korean tourist awaiting a flight back home, at Ben-Gurion airport
Ariel Schalit,AP

Israelis should be watching carefully how Italy is responding to the outbreak of the coronavirus, because it offers a glimpse into what we can almost certainly expect at home. It’s not very encouraging.

It was one thing to watch from afar as China grappled with the virus. Some 760 million people have been subject to one kind of lockdown or another. Nonresidents have been blocked from entering cities, and neighborhood vigilantes monitor people leaving their homes. The result is that the Chinese economy has come to a near standstill, as evidenced perversely by the drop in air pollution due to closed factories and the absence of traffic.

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But that’s China, a country where the government until recently told people how many children they could have, and continues to tell them what they can say and think, and where they can live.

Italy is a better model for Israel –  a democratic country where citizens don’t expect their lives to be micromanaged by the authorities. 

Get ready for the coronavirus state and micromanagement. As of Monday morning, Italy had just 152 confirmed cases of the virus and four deaths had been reported. Yet, already 50,000 people in 10 towns are under extended quarantine. Police are monitoring the entrances into town. 

In the Lombardy and Veneto regions, where the affected towns are located, schools, museums, universities and cinemas are closed and public events, such as the Venice Carnival, have been canceled or cut short. Giorgio Armani went ahead with his show for Milan Fashion Week, but disinvited buyers and journalists, who had to "attend" online.

Lombardy and Veneto generate about 30% of Italian gross domestic product, so you can imagine the impact if a full-fledged lockdown is imposed on the entire region. It’s no wonder the Italian stock market is plunging.

If you look at the raw numbers for coronavirus, the reaction in China and Italy smacks of medieval-style hysteria from the age of the Black Death. Worldwide, the coronavirus has infected 79,000 people and killed about 2,600, nearly all of them in China. By comparison, the 2019-2020 flu season in the United States alone has left 26 million sick and about 16,000 dead, according to the Centers for Disease Control. 

The difference is that the healthcare system is familiar with flu; it knows how flu spreads and impacts. Based on years of experience, health authorities can predict that it will wind down in March and April, and then people can worry about hay fever.

About COVID19, doctors know very little. The working policy (no doubt fanned by some unprofessional panic) is to be extremely safe rather than sorry. Lockdowns feel medieval, but they are not unreasonable under the circumstances.

So, Israel will presumably take the same measures as Italy and China, if and when the need arises.

But while we may be like Italy in terms of social freedoms, we’re not in terms of space and crowdedness.

Italy has more than 60 million people spread out over 300,000 square kilometers. It has major business and manufacturing centers dispersed all over the country.

Israel has 9.1 million people over just over 8,000 square kilometers.

In area, Israel is smaller than Lombardy and Veneto. Even worse, Israel’s business and high-tech are concentrated in one very small area:  The urban conurbation that stretches north and south, and a little east on Tel Aviv.

If 150 people in Tel Aviv or Givatayim show coronavirus systems, a lockdown of the Tel Aviv area for a few weeks will be economically devastating. There is no other part of the country that comes close to generating the economic activity of greater Tel Aviv.

The only thing that serves as a precedent for something like this in Israel’s modern history is the Second Lebanon War in 2006. For the 30 or so days of the fighting, the residents of northern Israel sat in bomb shelters under a barrage of Hezbollah rockets. The Tel Aviv area, notably, was out of rocket range, but the Israeli economy shrank in the third quarter when the war was on.

Against expectations, the economy quickly recovered. But that was thanks to a strong world economy, which enabled Israeli business to make up for the lost weeks of the war.

This time will be different. If the coronavirus does reach Israel and the authorities take drastic actions, it will almost certainly be in the context of a global event where other countries are doing the same thing. There won’t be a thriving global economy to which we can return to normal.

Is there any ray of hope? If there is, it’s the fact that Israel’s high-tech sector can function far better than most industries with people working from home. With a few exceptions, it doesn’t have big production lines manned by workers coming to factories nor does it require much face-to-face contact to get its work done. Wheezing and coughing, and coping with bored children, might make techies less productive for those weeks, but at least they’ll be doing something. We may even get a hit quarantine app or two out of it.