Prime Minister Jacinda Ardern getting her COVID vaccine

Alexander Gillespie

As New Zealand grapples to bring a Delta outbreak under control and to accelerate the vaccination rollout, social cohesion is vital for a successful elimination strategy.

Political consensus on elimination has endured so far. Unlike the anti-mask and anti-vaccination movements elsewhere, most New Zealanders continue to back the prime minister's decision to place the country under the strictest lockdown.

But strains on public consensus are beginning to show, with a less-than-ideal parliament, some pushback against lockdowns and agitation to "open up."

These debates will become more pressing as the government moves towards difficult discussions about an exit strategy and targets for vaccination rates.

Dissent and debate within parliament

At the highest level, the country has been let down by all sides.

During last year's nation-wide lockdown, the prime minister created the epidemic response committee. It reflected a government confident enough to be questioned in public through a parliamentary body it did not control. The opposition was constructive in finding the best ways forward. This was constitutional governance at its best.

This time, all sides of the political spectrum have failed. It began with the decision to suspend the parliamentary sitting, on the advice of the director-general of health. Any such advice should have been given in conjunction with the attorney-general, as it has significant constitutional consequences.

Prime Minister Jacinda Ardern delivering a press conference to update the country on COVID-19 — Photo: Mark Mitchell/NZME/ZUMA

The epidemic response committee was not resuscitated. Following a wave of criticism, the government floated a virtual option. Opposition parties rejected this, forcing the government to recall a truncated parliament with enhanced social distancing rules.

As a result, very few politicians are in parliament; and smaller parties are staying away for health (not constitutional) reasons. This is a poor example of how our country should be governed in at a time of emergency.

Dissent in the wider community

Dealing with protests outside parliament during this pandemic is equally difficult. The important point here is that people have rights, but these rights may be subject to reasonable limits.

All New Zealanders have a right to peaceful assembly in public to protest, but this can be curtailed by conditions of where, when and how. Fundamentally, nobody has a right to public protest in the middle of a national lockdown.

Other rights, such as freedom of expression, remain intact, pandemic or not. However, this too is not without limits. For example, advocacy is permissible in a speech about vaccination in a public space, but it cannot be misleading or factually incorrect.

The above examples generally relate to situations in which a minority group is trying to influence the majority view. But the debate gets more complex when the majority tries to make smaller groups do things they disagree with.

Compulsion and harm to others

Vaccination is likely to bring this issue to a head. The government has released a plan for a phased border opening, based on its elimination strategy. The plan would eventually allow vaccinated travellers from low-risk countries to enter without quarantine.

This will only be possible once a high proportion of New Zealanders is vaccinated. Earlier modelling shows that, for the alpha variant of COVID-19, around 80-85% of the population would need to be vaccinated before New Zealand can relax border controls. For the more transmissible Delta strain, the source of New Zealand's current outbreak, we would need to reach 97% of the population.

The government will likely need to use incentives and some degree of compulsion.

While Australia and other countries are now discussing how to adapt to an ongoing presence of COVID-19, accepting deaths and hospitalisations, New Zealand so far maintains elimination as a strategy "to stamp out the virus and keep our options open".

Whatever vaccination target will be necessary, getting there from the current level of 21% of the population fully vaccinated will be a challenge. The government will likely need to use incentives and some degree of compulsion.

Free vaccinations, if delivered conveniently and safely as part of a targeted public health education campaign to overcome vaccine hesitancy, are an effective tool. Lowering the age for vaccinations will also lift the overall percentage of uptake. If all else fails, even cash incentives may help to increase voluntary vaccination.

But compulsion might become necessary. While the general rule is that people can refuse medical treatments, in times of emergency this can be trumped and regulations could be introduced to enforce vaccination. This is where we must be careful. The temptation will be to use compulsion or heavy-handed pressure (such as restricting social welfare) against those who choose not to get vaccinated.

So far, the government has only introduced law to make it mandatory that certain workers, such as those at the border, are vaccinated. This is done to reduce the risk to others, and it is the correct measure to use.

If people choose not to be vaccinated and risk harming others, the government should intervene, explaining the risk the unvaccinated pose, apart from their potential self-harm. It should then pass laws to allow reasonable levels of discrimination against people who refuse the vaccine.

This means if a risk of harm to others can be shown, it may become acceptable to stop unvaccinated people from entering restaurants, but not from buying food from a supermarket (although strict safety measures may be insisted upon). Conversely, if an unvaccinated person risks harming only themselves, the government should let them carry the full consequences of their choice.

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Economy

Merkel's Legacy: The Rise And Stall Of The German Economy

How have 16 years of Chancellor Angela Merkel changed Germany? The Chancellor accompanied the country's rise to near economic superpower status — and then progress stalled. On technology and beyond, Germany needs real reforms under Merkel's successor.

Chancellor Angela Merkel looks at the presentation of the current 2 Euro commemorative coin ''Brandenburg''

Daniel Eckert

BERLIN — Germans are doing better than ever. By many standards, the economy broke records during the reign of outgoing Chancellor Angela Merkel: private households' financial assets have climbed to a peak; the number of jobs recorded a historic high before the pandemic hit at the beginning of 2020; the GDP — the sum of all goods and services produced in a period — also reached an all-time high.

And still, while the economic balance sheet of Merkel's 16 years is outstanding if taken at face value, on closer inspection one thing catches the eye: against the backdrop of globalization, Europe's largest economy no longer has the clout it had at the beginning of the century. Germany has fallen behind in key sectors that will shape the future of the world, and even the competitiveness of its manufacturing industries shows unmistakable signs of fatigue.

In 2004, a year before Merkel was first elected Chancellor, the British magazine The Economist branded Germany the "sick man of Europe." Ironically, the previous government, a coalition of center-left and green parties, had already laid the foundations for recovery with some reforms. Facing the threat of high unemployment, unions had held back on wage demands.

"Up until the Covid-19 crisis, Germany had achieved strong economic growth with both high and low unemployment," says Michael Holstein, chief economist at DZ Bank. However, it never made important decisions for its future.

Another economist, Jens Südekum of Heinrich Heine University in Düsseldorf, offers a different perspective: "Angela Merkel profited greatly from the preparatory work of her predecessor. This is particularly true regarding the extreme wage restraint practiced in Germany in the early 2000s."

Above all, Germany was helped in the first half of the Merkel era by global economic upheaval. Between the turn of the millennium and the 2011-2012 debt crisis, emerging countries, led by China, experienced unprecedented growth. With many German companies specializing in manufacturing industrial machines and systems, the rise of rapidly industrializing countries was a boon for the country's economy.

Germany dismissed Google as an over-hyped tech company.

Digital competitiveness, on the other hand, was not a big problem in 2005 when Merkel became chancellor. Google went public the year before, but was dismissed as an over-hyped tech company in Germany. Apple's iPhone was not due to hit the market until 2007, then quickly achieved cult status and ushered in a new phase of the global economy.

Germany struggled with the digital economy, partly because of the slow expansion of internet infrastructure in the country. Regulation, lengthy start-up processes and in some cases high taxation contributed to how the former economic wonderland became marginalized in some of the most innovative sectors of the 21st century.

Volkswagen's press plant in Zwickau, Germany — Photo: Jan Woitas/dpa/ZUMA

"When it comes to digitization today, Germany has a lot of catching up to do with the relevant infrastructure, such as the expansion of fiber optics, but also with digital administration," says Stefan Kooths, Director of the Economic and Growth Research Center at the Kiel Institute for the World Economy (IfW Kiel).

For a long time now, the country has made no adjustments to its pension system to ward off the imminent demographic problems caused by an increasingly aging population. "The social security system is not future-proof," says Kooths. The most recent changes have come at the expense of future generations and taxpayers, the economist says.

Low euro exchange rates favored German exports

Nevertheless, things seemed to go well for the German economy at the start of the Merkel era. In part, this can be explained by the economic downturn caused by the euro debt crisis of 2011-2012. Unlike in the previous decade, the low euro exchange rate favored German exports and made money flow into German coffers. And since then-European Central Bank president Mario Draghi's decision to save the euro "whatever it takes" in 2012, this money has become cheaper and cheaper.

In the long run, these factors inflated the prices of real estate and other sectors but failed to contribute to the future viability of the country. "With the financial crisis and the national debt crisis that followed, economic policy got into crisis mode, and it never emerged from it again," says DZ chief economist Holstein. Policy, he explains, was geared towards countering crises and maintaining the status quo. "The goal of remaining competitive fell to the background, as did issues concerning the future."

In the traditional field of manufacturing, the situation deteriorated significantly. The Institut der Deutschen Wirtschaft (IW), which regularly measures and compares the competitiveness of industries in different countries, recently concluded that German companies have lost many of the advantages they had gained. The high level of productivity, which used to be one of the country's strengths, faltered in the years before the pandemic.

Kooths, of IfW Kiel, points out that private investment in the German economy has declined in recent years, while the "government quota" in the economy, which describes the amount of government expenditure against the GDP, grew significantly during Merkel's tenure, from 43.5% in 2005 to 46.5% in 2019. Kooths concludes that: "Overall, the state's influence on economic activity has increased significantly."

Another very crucial aspect of competitiveness, at least from the point of view of skilled workers and companies, has been neglected by German politics for years: taxes and social contributions. The country has among the highest taxes on income in Europe, and corporate taxes are also hardly as high as in Germany anywhere in the industrialized world. "In the long run, high tax rates always come at the expense of economic dynamism and can even prevent new companies from being set up," warns Kooths.

Startups can renew an economy and lay the foundation for future prosperity. Between the year 2000 and the Covid-19 crisis, fewer and fewer new companies were created every year. Economists from left to right are unanimous: Angela Merkel is leaving behind a country with considerable need for reform.

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