Friday, October 09, 2020

Data-Driven Values-Based Hedging in the Shadow of COVID-19: Cuba and Costa Rica Open their borders to Tourism

  

Pix Credit: (Marc Frank, Cuba opens most of country to tourism as enters "new normality", Reuters)

 

In a recent reflection (Simulating Politics in the Shadow of COVID-19: " 'like the school nurse trying to tell the principal how to run the school') I suggested the difficulties of generating consensus among national elites in meeting the challenge of COVID-19. That difficulty was not merely a matter (as has been the political line of the opponents of the current American Administration) of a refusal to conform policy to science and scientific knowledge expressed as the product of simulation models.  Rather, the challenge comes when competing simulations, grounded in quite distinct moral and policy measures of values, compete to serve as the basis for political, economic, and societal response to crisis. In the United States that expressed itself in the fight between those who advanced a medical and public health centering set of simulation models against those who advanced models that centered economic stabilization.  One model centered aggregated human life; the other centered the long term collective life of society. 

To choose a particular form of simulation is to choose a set of values that are to be advanced by the simulation.  But more than that, to choose a particular form of simulation is meant to foreclose any debate on the premises on which that simulation was chosen.  Choosing simulations is a form of choosing sides in a political contest. In the case of COVID-19, that necessary fragmentation was understood as separating out those who placed a greater value on economic simulation against those who would value health more. Both of course are after the same ultimate result--the maximization of the welfare of the American people--but each of their conceptual universes produce highly different pathways to that goal--and with those pathways quite different effects on individuals (e.g., Ruminations 90: Sacrificing the Most Humble on the Altar of Leadership). (Simulating Politics in the Shadow of COVID-19: " 'like the school nurse trying to tell the principal how to run the school')

This battle of the models has produced, in the absence of a string centralized response, an effective policy of hedging by states. That hedging differs, and sometimes substantially, form state to state.  Some states have "opened up" for business more than others.  But no state has either shut down as close to completely as possible, and none have opened  up as if the pandemic never occurred.  The battle of the simulations continues--and quite ferociously. It is a data driven policy argument with substantial political consequences to be sure.  At its core, however, it is a battle over values and valuation and reflects an ancient contest between the obligations of the states (and other institutions) to the individual or to the collective, or better said, a contest over where a society draws the line (that is gives effect to values  based on data driven consequences understood through the values based construction of predictive analytics).
 

Pix Credit here

This is not a challenge unique to the United States or even to developed states, though it manifests most prominently there because these places tend to be home to the great engines of social media (as well as of economic, social, and cultural power).  Indeed, the problem highlighted in the case of the United States plays an even more crucial role in developing states.

This post considers  the way this simulation hedging has been manifested in Cuba and Costa Rica.  It is read against growing controversy in developed states about the primacy of siloed medical modelling as the sole basis for the construction of responsive policy (Coronavirus: Health experts join global anti-lockdown movement).

 

Acute, in that context, is the tension between social and economic stability, and the collective health of the nation, in states that rely substantially on tourism. Two in particular, close to the U.S. homeland, but quite distinct in their political organization, merit closer study.  The first is Cuba; the second is Costa Rica. Both states closed their borders at the height of the crisis and both have devoted substantial resources to the preservation of the individual and collective health of their citizens in remarkably successful ways. But both have paid a price, each preserving healthy populations whose economic livelihood remains threatened. 

Rather than chose between the two antipodes of individual and economic health, both states have sought to hedge in interesting ways.  For Cuba that has meant that the state first focused on health of the population, and then gambled that health progress to keep its economic engines alive and its populations maintained. Tourism had been one of the primary economic drivers of the Cuban State's macro-economic policy.  It was central to the invigoration of a small but critical and critically managed private (non-state) sector and a means of raising capital that the state could use  to advance its political-economic objectives. The hedging in Cuba was made easier because of a long history of isolating tourism around all inclusive resorts--ghettos of foreign holiday goers that could be more easily monitored and controlled.  For Cuba, then, slowly opening through this system of resorts and then expanding in the countryside  appeared to be a prudent gamble; and one that could be easily reversed if a dangerous enough COVID spike threatened (as those things are measured in Cuba).     

Sarah Marsh, Marc Frank, and Nelson Acosta recently reported that the Cuban state has announced a movement toward a tourism based "new normal." This new normal is structured around the opening of large sections of the country, other than Havana, its most populous area and one still coming out of a recent COVID spike.  At the same time, Cuban official announced a relaxation of the more stringent quarantine measures, in part to reduce costs and in part as a gamble that new outbreaks will be both less likely and more easily contained by a rapid response. (Sarah Marsh, Marc Frank, and Nelson Acosta,  Cuba opens most of country to tourism as enters "new normality", Reuters) reporting follows)

While Cuba opened its borders through a policy centered on a hedging based on an ability to control tourist ghettos, Costa Rica adopted a different approach.  It sought to hedge on the basis of the origin of the tourist from abroad, rather than on where they might travel and what they might do once they got to Costa Rica.  The result was a slow opening based on the application of health based simulations applied to countries of origin. For example, by the end of August 2020, Costa Rica had opened its borders to travelers resident in much of Europe and six US states (Costa Rica is allowing U.S. travelers again — but only if they come from the right states (Residents of New York, New Jersey, Connecticut, New Hampshire, Maine and Vermont)). 

Multiple reports cited a Costa Rica tourism official as saying the country chose U.S. states that have outbreak conditions that are similar to or better than those in Costa Rica. Costa Rica closed its borders to international travelers on March 18 and reopened them on Aug. 1 to select, low-risk countries. Residents of the European Union and Schengen Zone, the U.K., Canada, Uruguay, Japan, South Korea, Thailand, Singapore, China, Australia and New Zealand are also allowed in. (Costa Rica is allowing U.S. travelers again — but only if they come from the right state).

The policy change is economically driven, as it is in Cuba. "The relaxed border restrictions come as Costa Rica enters its high season, which runs from November until May 2021, with the country aiming to generate 80,000 jobs by 2021." (Costa Rica will now open its borders to tourists from all US states by November). The consequences, of course, are sub-optimal for those whose health valuing models suggest  the possibility of second or third waves; but the consequences of a failure to take the risk and re-open for busies are enormous fro fragile economies.  But the hedging in Costa Rica also shifts the costs of response (at least with respect to foreigners), onto the travelers. "Travelers will not be required to quarantine upon arrival. However, under enhanced border controls travelers must present a negative PCR COVID-19 test will be mandatory in the 72 hours before the trip. When visitors arrive, they will need to complete an online health form and purchase travel insurance that covers accommodation in case of quarantine and medical expenses." (Ibid). It has been reported that the insurance will have to "cover at least $50,000 in medical expenses in the event they contract COVID-19 while in Costa Rica; and will cover a minimum of $2,000 in lodging expenses for any issues related to the pandemic (such as the need to quarantine)." (Starting November 1, any American who presents a negative COVID-19 test can travel to Costa Rica).

The result of hedging, of course, is that the optimal result (and limiting consequences) of adhering to a single model cannot be achieved.  In both cases ti is clear that the state has accepted the inevitability of increased infection (and including its most terrible personal consequences in systems that can be overwhelmed by a massive reinfection). But it has also accepted that its economic engines cannot be operated at pre-pandemic levels and that challenges to economic stability will remain potentially high producing individual suffering of a different kind.  The more interesting aspect, though, is that the sort of policy discussions in these two states appears wholly absent from political discourse in the US., where the case for the health based simulations has dominated the political discourse while the case for economic model based hedging has never really developed in any useful way. Modelling has become orthodoxy, has become the measure against which the legitimacy of political allegiance is measured. The choice of models, like the choice of political faction, becomes central to fights for domination that now masquerade as politics. Thus, perhaps, even the debates around the so-called Great Barrington Declaration is grounded in a set of premises that shape and constrain the universe of politically realizable objectives, e.g., Coronavirus: Health experts join global anti-lockdown movement).  Ironically, it is in less developed and tourist dependent economies in the shadow of these lumbering debates within the great powers that more measured assessment might be possible.

In the end that is what appears to mark the difference between the US and its tourist dependent neighbors, a difference between a more clear eyed consideration of the spectrum of sacrifices embedded in the challenges of pandemic (one made more quantitative through data based modelling, though with its dangers) and one in which incompatible models are deployed as crude political weapons for the advancement of the ambitions of political factions. 




__________

Sarah Marsh, Marc Frank, and Nelson Acosta,

Cuba opens most of country to tourism as enters "new normality",

Reuters 8 October 2020


HAVANA (Reuters) - Cuban Prime Minister Manuel Marrero said late on Thursday that most of the Caribbean island nation would open to international tourism starting next week as it moved towards a “new normality” after containing its coronavirus outbreak.

The country, which closed its borders six months ago in a bid to contain the spread of the virus, has been gradually opening up to tourism ahead of the November-March high season, first in the northern keys and then its Varadero beach resort.

Thirteen of Cuba’s sixteen provinces will now be open to tourism, Marrero told a roundtable discussion broadcast to the nation, albeit not yet the capital, Havana which only just appears to have curbed a second wave of infections with strict measures, including a curfew.

International tourism is one of Cuba’s top hard currency earners, so its suspension this year has dealt a blow to the cash-strapped economy, even as the United States has continued to harden its decades-old trade embargo.

“We will open the possibility of international flights for all the provinces that are in this third phase,” Marrero said, noting that all arrivals would be tested.

Cuba’s universal, community-based healthcare system has contained its outbreak and reduced mortality by hospitalizing all confirmed cases, tracing and isolating their contacts and applying a raft of therapeutic treatments.

Cuba has reported just 11 deaths from Covid-19 per million inhabitants, compared with 203 for the Dominican Republic and 647 for the United States, statistics from Johns Hopkins University show.

That has come at a cost, however.

The state has, for example, paid for putting 115,000 suspected cases and contacts of confirmed cases at isolation facilities, according to Marrero. Of those, fewer than 5% tested positive for the virus.

From now on, Cuba will allow people to isolate at home, Marrero said.

President Miguel Diaz-Canel said at the roundtable the country had proven it had learned to live with the virus, curbing its second wave of infections better than the first and sharply reducing the mortality rate.

As such, economic and social life could resume while maintaining strict anti-COVID measures such as mask-wearing and physical distancing, he said.

“The pandemic has cost us and had a high impact on our state budget, but we have worked according to a non-negotiable principle: the main treasure is the life of the Cuban people,” he said.

Reporting by Sarah Marsh, Marc Frank and Nelson Acosta. Editing by Gerry Doyle



No comments:

Post a Comment