Countries that have permanently shut their borders in a misguided effort to reduce Covid infections to zero are heading for economic catastrophe, according to Matthew Lynn in the Telegraph.
Controlling Covid through lockdowns and closed borders was a triumph to start with. As the pandemic has dragged on, and borders remain sealed for years without end, it is going to take a huge economic toll. Australia is heading back into recession even as the rest of the world recovers. New Zealand is seeing investment flee.
In truth, in an increasingly globalised and networked world, countries cannot exist in semi-lockdown forever and borders cannot remain permanently closed without doing huge economic damage. They can turn themselves into hermits if they want to – but the price will be a very high one. …
After a record 30-year run without a single recession, the [Australian] economy shrank last year, and it is now expected to contract again over the next couple of quarters.
Huge swathes of the population are back in lockdown as Covid infections rise, and output is inevitably starting to fall. As the rest of the world recovers, and growth accelerates in the United States, Britain, and, even if slightly more sluggishly, across most of mainland Europe, both countries are illustrating the cost of ‘zero-Covid’ strategies.
Worth reading in full.