TheEconomistMay 16th 2020 631I
t may bea painful fact to contemplate
during these locked-down days, but last
year the world was more mobile than ever,
with people taking 4.6bn flights. In April
this year, though, planes carried just 47m
passengers; that level of mobility, annual-
ised, would set the clocks back to 1978. The
virtual halt to travel has exacerbated the
global economy’s woes, complicating trade
ties, upending business and devastating
the tourism industry. Little wonder that
governments want to restore links. An idea
gaining favour is the creation of travel
“bubbles”, binding together countries that
have fared well against the coronavirus.
A closer look yields some grounds for
optimism. The Economisthas identified po-
tential bubbles that account for around
35% of global gdp, 39% of all trade in goods
and services and 42% of the world’s spend-
ing on tourism. But the challenge of con-
necting them also underscores how hard
restarting the global economy will be.
Simply returning borders to pre-virus
days is, for now, inconceivable. Manyhealth experts, first critical of travel restric-
tions, have come to view strict controls as
useful, especially for places that have con-
tained local infections. “Every inbound
case is a potential seed that can grow into
an outbreak,” says Ben Cowling, an epide-
miologist at Hong Kong University.
The first bubble is due to come to life on
May 15th between Estonia, Latvia and Lith-
uania, among Europe’s best performers in
taming the virus. Their citizens will be free
to travel inside the zone without quaran-
tine. The next might be a trans-Tasman
bubble, tying New Zealand to Australia’sstate of Tasmania, both of which have kept
new cases down. China and South Korea
have launched a “fast track” entry channel
for business people. “My expectation is
that there will be a large number of small
travel bubbles,” Mr Cowling says.
But in the same way that regional trade
deals are more efficient than bilateral
pacts, the economic benefits from making
the bubbles bigger would be greater. Based
on an analysis of infection data, The Econo-
mistsees two large zones that could emerge
as bubbles, subsuming the smaller ones
that are now being formed.
The first is in the Asia-Pacific region,
where countries from Japan to New Zea-
land have recorded fewer than ten new in-
fections per 1m residents over the past
week. The second is in Europe: using a
laxer threshold—fewer than 100 new cases
on the same basis—the bubble could reach
from the Baltic to the Adriatic, and take in
Germany (see map on next page). Our Asia-
Pacific bubble would, thanks to China and
Japan, account for 27% of global gdp. Our
European one would make up 8%.
One measure of the potential value of
the bubbles is their degree of trade integra-
tion, showing whether the economies are
complementary. For the countries in our
Asia-Pacific bubble, an average of 51% of
their overall trade is with each other. In our
Baltic-to-Adriatic bubble, it is 41%. Small
countries would gain the most by recon-
necting with larger neighbours.The global economyA good kind of bubble
SHANGHAI
As some countries contain the virus more successfully than others, could travel
zones offer a route to economic recovery?Finance & economics
64 Turkeyintrouble
65 Geopoliticsandcapitalmarkets
66 Crisis-fightingattheECB
67 Freeexchange:Mightinequality fall?Also in this section— Buttonwood is away