6 ★ FINANCIAL TIMES Thursday 30 January 2020
I N T E R N AT I O N A L
C L I V E C O O KS O N— LONDON
Scientists globally are racing to under-
stand the deadly coronavirus that
emerged in China last month. Several
thousand people have been infected,
with the number of cases rising rapidly
because of the hordes of Chinese travel-
ling for the lunar new year holiday.
International travellers have helped
to spread it farther, including to the US
and Europe. There are fears that, if the
respiratory illness that probably started
in a food market in the central city of
Wuhan continues to spread, it will
develop into a serious epidemic.
How dangerous is the virus?
The nCoV coronavirus has killed 132
people and infected 5,974. Worryingly it
seems to transmit more readily between
humans than severe acute respiratory
syndrome (Sars), a similar coronavirus
that killed almost 800 people after it
originated in China 17 years ago.
Computer modelling at Imperial Col-
lege London and Lancaster University
in the UK suggests that each new coro-
navirus case is infecting on average
about 2.5 other people.
The new virus is, however, less viru-
lent than Sars, which killed 10 per cent
of those infected. So far nCoV has
caused severe respiratory disease in
about a quarter of the confirmed cases
and killed 2-3 per cent of patients.
But experts warn that fatality rates
are hard to estimate in the early stages
of an outbreak and the virus may
mutate as it passes between people. It is
also impossible to predict whether
genetic changes will make it more or less
virulent. For comparison, seasonal flu
has a mortality rate well below 0.1 per
cent but it infects so many people that
about 400,000 deaths a year worldwide
are attributable to flu. New pandemic
flu strains are far more dangerous:
Spanish flu in 1918-19 infected 500m
and killed 50m worldwide.
How does the virus spread?
There is still a wide range of estimates
for the incubation period, from two to
10 days, according to the World Health
Organization. The transmission routes
between people are still under investi-
gation. An important question still to be
resolved is whether people who are
infected can pass on the virus if they are
not showing symptoms.
The nCoV virus is spreading faster
than Sars, which affected 8,000 people
over eight months. The number of con-
firmed cases in the current outbreak has
risen to nearly 6,000 within a month
and there are almost 7,000 suspected
cases. Epidemiologists fear that nCoV
has already infected tens of thousands
more people.
Can masks help?
There is considerable debate among
public health experts about the preven-
tive effectiveness of covering the face to
prevent infection.
Surgical grade masks will help but
there is no consensus about whether
flimsy mass-produced versions are of
any use. The WHO does not mention
masks in its advice to avoid infection.
“Wearing face masks may give a false
sense of security,” said Bill Keevil, pro-
fessor of environmental healthcare at
Southampton university, adding that
good hand hygiene was most important.
Tests in his laboratory have shown that
coronavirus can survive for four days on
common materials such as plastics,
glass and stainless steel.Are vaccines being developed?
Since Chinese scientists published the
genetic sequence of nCoV on January 10,
laboratories anywhere in the world
have been able to test patient samples
for its presence. This is done using a pro-
cedure called real-time polymerase
chain reaction (RT-PCR) to identify the
virus’s genetic code. But RT-PCR is slow
and requires specialist equipment, so
researchers are rushing to develop
faster, cheaper and more portable tests.
No existing drugs are designed to treat
coronaviruses, though some antiviral
medicines may alleviate the symptoms.
Chinese doctors are giving patients
combinations of HIV drugs, and another
antiviral developed to treat Ebola has
shown promise against coronavirus in
animal tests.
A crash programme to develop a vac-
cine to prevent nCoV infection is alsounder way under the auspices of the
Oslo-based Coalition for Epidemic Pre-
paredness Innovations (Cepi), a $750m
partnership set up in 2017 by govern-
ments, industry and charities to prevent
future pandemics.
Cepi has launched three projects
using different technologies to prepare
nCoV vaccine candidates. Richard
Hatchett, chief executive, said the aim
was to have one ready for preliminary
testing on human volunteers within 16
weeks. But even if the programme goes
well, no vaccine is likely to be ready for
mass administration in less than a year.Should the WHO declare an
international emergency?
Last week, the WHO emergency com-
mittee voted by a very narrow margin
not to declare a so-called public health
emergency of international concern.
Such a measure has been announced
five times over the past decade, includ-
ing over last year’s Ebola outbreak in the
Democratic Republic of Congo.
The WHO justified its decision on the
grounds that the disease had not spread
beyond China sufficiently to justify a
global emergency. Yet many interna-
tional health experts have called that
decision a mistake.
Additional reporting by Primrose Riordan
in Sydney
Lexpage 12;Marketspage 25MA X S E D D O N— MOSCOW
RO M A N O L E A R C H Y K— KYIVVladimir Putin’s promotion of a crucial
figure driving peace talks with Ukraine
has been welcomed by Kyiv as a signal
of renewed willingness in Moscow to
resolve the six-year conflict between
the two countries.Dmitry Kozak, a former deputy prime
minister, was appointed to a newly
created position in the presidential
administration last week as part of
sweeping changes in the Kremlin that
analysts said were designed to lengthen
Mr Putin’s rule.
The announcement was followed by
the reported resignation of Vladislav
Surkov, Mr Putin’s chief negotiator on
Ukraine.
People close to the peace talks said the
changes were intended to formalise Mr
Kozak’s emergence as Mr Putin’s lead
negotiator on Ukraine. Mr Kozak over-
saw two prisoner exchanges last year
that were widely hailed as progress in
efforts to bring an end to the conflict
between Ukraine and Russia-backed
separatists.
The conflict in eastern Ukraine,
which started with Russia’s annexation
of Crimea from Ukraine in 2014, has
claimed 14,000 lives.
Mr Kozak has also helped resurrect
four-party peace talks led by France and
Germany. The so-called “Normandy
four” negotiations resumed last month
after years of stalling under Mr Surkov.
Kremlin spokesperson Dmitry
Peskov said on Tuesday that Mr Surkov
remained a “de jure” adviser to Mr Putin
and said that the Ukraine brief had yet
to be formally assigned. “Nuances are
still being worked out.”
Mr Kozak is part of a coterie of senior
Russian officials whose ties to Mr Putin
go back to their days in the St Petersburg
mayor’s office in the early 1990s. Since
Mr Putin came to power 20 years ago,
Mr Kozak’s missions have included
overseeing the integration of Crimea,
running Mr Putin’s first re-election
campaign in 2004 and, most recently,
looking after the energy industry.
Mr Kozak will have to reconcile
Ukraine’s efforts to reclaim the two
Moscow-backed breakaway states on its
border with Russia. Mr Zelensky has
refused to grant the regions lasting
autonomy — a move seen in Ukraine as
giving Russia a veto over Kyiv’s pro-
western foreign policy — and instead
wants to include them in a planned
decentralisation reform.
“Surkov was [driving] a policy of
weakening Ukraine and preventing the
signature of future EU and Nato agree-
ments by politically destabilising the
territory,” a person familiar with the
peace talks said. “Now we are more into
managing the process on the ground.
[.. .] It’s a more pragmatic approach.
Kozak is a stronger administrator and
good on the economy.”
But other people close to the talks
cautioned that Mr Putin, who has shown
no sign of easing pressure on Ukraine,
will remain the decision-maker.China.Epidemic fears
Virus spreads faster than Sars
New strain may mutate and
appears to transmit relatively
easily between humans
Russia
Promotion
of Putin ally
raises hopes
over Ukraine
conflict
Combating contagion: an official
in a protective suit disinfects a
village street in Shandong
province yesterday— ReutersN E I L M U N S H I— LAGOS
Nigeria is ramping up efforts to prose-
cute people for corruption, after what
critics charge as a lacklustre effort by
President Muhammadu Buhari’s
administration to deliver on its signa-
ture campaign promise.
His top anti-corruption enforcer last
week demanded the extradition from
the UK of a former petroleum minister
accused of helping to loot billions of dol-
lars from the nation’s coffers. Days later
the financial crimes watchdog charged a
former attorney-general with allegedly
taking bribes to allow a $1.3bn oil block
deal in 2011.
But the headline-grabbing moves
came as Nigeria fell four spots to 146 out
of 180 countries on Transparency Inter-
national’s annual corruption index, its
lowest ever ranking, increasing scrutiny
over whether Mr Buhari’s anti-graft
promise was genuine.
“It’s a bit difficult not to draw a link
between the recent streams of bad news
and the sudden awakening of the gov-
ernment to the anti-corruption drive,”
said Cheta Nwanze of Lagos’s SBM Intel-
ligence and an a dministration critic.
During last year’s presidential elec-
tion, Mr Buhari shared the stage with a
northern governor who had allegedly
been caught on hidden camera accept-
ing stacks of US dollars.
Mr Buhari went on to win the gover-
nor’s crucial state and a second term.
Lacking an independent and well-
funded police, judiciary and enforce-
ment, “the whiff of arbitrariness and
one-sidedness will continue to hang
over the Buhari government’s anti-cor-
ruption drive”, Mr Nwanze said.
Mr Buhari’s government rejected the
results of the corruption index, criticis-
ing the failu re to account for a rise in
convictions and increased transparency
measures.
“Anybody could put together this
kind of report from press releases issued
by opposition political parties,” Garba
Shehu, a spokesman for the president,
told local reporters.
Sadiq Isah Radda, secretary of the
Presidential Committee Against Cor-
ruption, said the administration had
worked to convict a number of high-
profile members of the president’s All
Progressives Congress party.
Last month, ex-governor Orji Uzor
Kalu, a member Mr Buhari’s party, was
sentenced to 12 years in prison for graft.
Mr Radda also pointed out that two
former governors were convicted and
imprisoned in 2 018 — both men had
been members of the opposition and Mr
Buhari’s party at different times.
Mr Buhari has long been known as an
ascetic, with a clean reputation stretch-
ing back to his days as military dictator
in the 1980s.
One of his main campaign promiseswhen he first won office democratically
in 2015 was to fight the corruption that
was widely seen as rampant in his pred-
ecessor’s administration.
One of the highest profile members of
the previous regime facing charges is
former oil minister Diezani Alison-Ma-
dueke, under investigation by UK
authorities since she was detained by
police in London in 2015.
Last week, Ibrahim Magu, acting
chairman of Nigeria’s anti-corruption
unit, the Economic and Financial
Crimes Commission, called on the UK to
extradite the former oil minister, stating
the agency had sufficient evidence to
prosecute her for financial malfeasance
committed while in office.
“We want everybody who has stolenfrom the commonwealth to bring it
back to Nigeria, so as to use the monies
to provide the needed infrastructure,”
he said.
The EFCC says it has traced at least
N47.2bn ($130m) and $487.5m in cash,
properties and other valuables to Ms
Alison-Madueke, petroleum minister
from 2010 to 2015.
Assets include “boxes of gold, silver
and diamond jewellery worth several
million pounds sterling” at one resi-
dence in Abuja and a $37.5m Lagos
apartment building, the EFCC says.
Ms Alison-Madueke denies any wrong-
doing.
Perhaps the biggest corruption case
involves a $6.6bn arbitration judgment
awarded to P&ID, an obscure company
started by an Irish businessman, over an
aborted gas processing plant in south-
ern Nigeria.
The 2017 judgment against Nigeria
has since grown to more than $10bn
with interest, roughly a quarter of the
country’s foreign reserves.
Nigeria seems to have realised the risk
the ruling poses to its reserves, its sover-
eign credit rating and ability to raise
debt. In recent months it has sought to
label the original contract fraudulent,
prosecuting low-level oil ministry offi-
cials who pleaded guilty to taking bribes
in exchange for approving the deal.
A spokesman for P&ID has called the
recent prosecutions a “sham”.West Africa
Nigeria intensifies corruption drive after fall in global ranking
Diezani Alison-Madueke is under
investigation by UK authoritiesGovernments yesterday stepped up
the organisation of airlifts of citizens
from Wuhan and arranged their
quarantine after repatriation.
In Tokyo, a chartered ANA flight
from Wuhan landed at Haneda airport,
carrying 206 Japanese citizens.
Japan’s health ministry said it was
still carrying out medical checks on the
evacuees, but a number of the
passengers had symptoms such as
fever or a cough.
A US chartered flight carrying
government staff and civilians
departed from Wuhan’s Tianhe airport,
a US official said. It was scheduled to
land in Ontario, California. The US
state department said passengers
would be subject to medical screening
before boarding the plane.
There were 230 seats on the flight
but demand for tickets exceeded that
number, according to US citizens in
Wuhan. Photos posted by passengers
before take-off showed flight staff and
a pilot in the plane’s cockpit wearing
protective suits and masks.
Scott Morrison, the Australian primeminister, said subject to approval from
Chinese authorities Canberra would
evacuate some citizens from Wuhan
but did not specify a date. They would
be taken to a quarantine centre on
Christmas Island, which is also home
to a detention centre for asylum
seekers.
The EU has activated its “civil
protection mechanism” to co-fund two
flights to repatriate European citizens
from the Wuhan area. The first flight
left France yesterday, with 250 French
citizens on board, and the second
taking 100 EU citizens would depart
today.
Citizens from 14 European member
states have put in requests for
repatriation, including the UK.
The UK confirmed about 200 British
citizens, not displaying any symptoms
of the virus, would be flown back from
Wuhan to the UK today.
Downing Street said they would be
put in “supported isolation” for two
weeks and given “all necessary
medical attention”. “Our priority is to
keep British nationals and their
families together,” No 10 said.
Reporting by Primrose Riordan in
Sydney, Robin Harding in Tokyo, Laura
Hughes in London and Mehreen Khan
in BrusselsAirlifts
Medical checks as foreign
citizens are evacuatedB R E N DA N G R E E L E Y— WASHINGTON
CO L BY S M I T H— NEW YORKThe US Federal Reserve left its main
policy rate unchanged yesterday.After a two-day meeting in Washington,
the members of the Fed’s Open Market
Committee left the federal funds rate at
a range of 1.5 to 1.75 per cent. They made
only one change to their policy state-
ment, describing growth in household
spending as “moderate” rather than
“strong”, as they had in December.
This continuity suggests that the com-
mittee still sees the economy as “in a
good place”, as chair Jay Powell often
puts it, and that they have not changed
their plan to leave the policy rate where
it is through the end of this year.
Even though it left the main policy
rate unchanged, the committee did
raise by 5 basis points the interest it pays
banks on the reserves they hold on the
Fed’s balance sheet, to 1.6 per cent. This
“interest on excess reserves,” or IOER, is
one of a few short-term interest rates
the Fed uses as a tool to keep the fed
funds rate within its target band.
“Setting the interest rate paid on
required and excess reserve balances 10
points above the bottom of the target
range for the federal funds rate is
intended to foster trading in the federalfunds market at rates well within the
FOMC’s target range,” the committee
said in its statement.
Markets shrugged off the first Fed
meeting of 2020, with muted reaction
across both bonds and equities.
The yield on the benchmark 10-year
note steadied at 1.6 per cent, while the
more policy-sensitive two-year note saw
its yield fall to 1.4 per cent. Yield moves
inversely to price. The S&P 500 held on
to its earlier gains, rising 0.4 per cent.
Traders are still pricing in one 25 basis
point reduction in the Fed’s main policy
rate by September, according to futures
prices compiled by Bloomberg.
In September, the federal funds rate
had spiked briefly above the Fed’s target
band, helping to spur a series of quick
shifts by the central bank — most signifi-
cantly a decision to expand its balance
sheet. It bought Treasury bills at a rate
of $60bn a month, and in turn credited
banks with reserves. This raised the
overall level of reserves available to
financial markets, and eased the pres-
sure on short-term interest rates.
The Fed also lowered the rate of inter-
est it paid on those reserves at a faster
rate than they normally would have for
policy shifts, to further help drag the
policy rate down into its target band.
Central banks swim against tidepage 11Monetary policy
Fed holds rates and suggests
economy ‘in a good place’
JANUARY 30 2020 Section:World Time: 29/1/2020 - 20: 00 User: david.owen Page Name: WORLD3, Part,Page,Edition: LON, 6, 1