After the Bell: A post-pandemic appraisal — in the final analysis, what did we learn?

27 Feb 2023

When you think back on the coronavirus pandemic, it seems hard to believe we went through such a thing. What was that? Remember the lockdowns and the family meetings, and packed hospitals and the lines at the vaccine centres, and the masks, always the masks? It all feels like a nightmare now. And then we woke up and our problems returned to normal: corruption, Eskom, politics — the usual.

It was about this time in 2020 that the first cases hit South Africa. Like every country, SA thought or hoped or prayed that it would not be caught up in the whirlwind. But, inevitably, we were. And by the end of it — although cases are still popping up — SA hasn’t had a confirmed death for two months. Precisely 102,595 South Africans died over the past three years from the virus, if our statistics are to be believed. The horror of the disease is still with so many of us today; triage at hospitals, saying goodbye on Zoom; and carrying on without loved ones.

It’s possible now to do more serious comparative analyses about the longer-term effects of the pandemic, some of which might be surprising. If you were to ask anyone what the standout long-term (mostly good) consequences of the pandemic were, I bet most people would say the explosion of e-commerce and the expansion of work-from-home.

Both of these consequences were felt as much in SA as elsewhere, and are still with us today. But there are some oddities we should be aware of, and I’m drawing here from US professor and commentator Scott Galloway’s newsletter No Mercy/No Malice.

He points out that actually, the e-commerce effect is almost entirely in our imaginations.

During the pandemic, we all suddenly discovered our inner Uber Eats. Before the crisis in the US, e-commerce sales constituted about 10% of total retail sales. This exploded during the pandemic and understandably jumped to about 17% of total sales by the end of 2020.

But here is the funny thing: it then came back a bit and flattened, so e-commerce sales are now roughly 15% of total sales in the US. If you were to extrapolate the increase in sales pre-2020, they were rising anyway. At this point, US e-commerce is more or less exactly where it would have been had the crisis not happened. The pandemic, in effect, only confirmed the longer-term rise in e-commerce. What happened was a change within the e-commerce sector; with food delivery massively rising, that trend has endured.

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In SA, the pandemic-driven explosion of e-commerce was faster, partly because it was smaller as a proportion of total retail sales when Covid hit than in the US. Even though increases were huge in percentage terms, e-commerce is still small in SA, somewhere around 5% of total sales. But what has happened is that e-commerce has been injected with a bit of jet fuel. From now on, the trend of gradual annual increases in e-commerce is probably unstoppable, which of course Amazon is banking on as it enters SA.

On the other hand, the work-from-home effect is lingering and remains pretty dramatic all across the world. Foot traffic in Manhattan is still 50% down, and traffic on the London Underground remains at 30% of pre-pandemic numbers. The consequences for the office rental market are obvious.

But there are two other important lessons, and one is about the state of SA’s healthcare sector, which may shock you. There are plenty of dysfunctional hospitals in SA, we know, and load shedding is making everything worse. But generally, SA emerged from the crisis no harder hit than comparable countries, and better than many much richer.

The appropriate metric here is excess deaths; the deviation from the mean in the number of people who died. SA’s deviation from the mean was about 19% for the period January 2020 to January 2023. That was about the same as Brazil, much less than Colombia and Mexico, and about the same as the smaller countries of eastern Europe.

It’s also larger but roughly comparable to the 14% recorded in the US, 11% in Spain and 10% in the UK. The remainder of Europe was around 7%, including, interestingly, Sweden, which famously took a more relaxed approach to the virus than many European countries. The data are available here .

I think what it tells us is that SA’s healthcare system is not perfect by any means, but it’s much better than most people think, particularly if you consider how much SA spends on it. The US spends on average about $12,000 per person per year on healthcare. The UK, with its famed National Health Service, spends about $4,000 per person per year. SA spends around $500 per person per year.

Perhaps SA’s dual half-private/half-government system is not nearly as terrible as the advocates of National Health Insurance claim. I know aspects of it are unfair, but the dual system has the advantage of creating a dynamic private sector and a respectable, if deficient, public sector. For SA to emerge from the pandemic with around 4 percentage points more excess deaths than the US while paying 20 times less for healthcare is pretty incredible.

The other thing the coronavirus has demonstrated is geopolitical, and this is very simple and very underappreciated here in SA: the West won. As Galloway points out, nobody is lining up for Chinese or Russian vaccines. Nobody was copying the Chinese “zero-tolerance” system. The solution to the virus was created by Western financial systems, backing Western biotech startups, using Western skills base and systems.

Obviously, I know they won’t, but the supporters of Russia’s invasion of Ukraine in the ANC should sit up and take notice. DM/BM

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