Bloomberg Businessweek - USA (2020-05-04)

◼ POLITICS

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DATA: COMPILED BY BLOOMBERG

Policy The U.K.’s Lost Week

THEBOTTOMLINE SaudiaArabia’scrownprincehadhopedto

keep pursuing his grand modernization plan, but the oil shock and

the coronavirus will make it harder to pull off.

cinemasandconcertvenuesandinliftingnon-oil

revenuewithtaxesandfees.Buttheoilshockand

thevirus’simpactaremakingit difficulttofund

projectswhenmorethan60%ofrevenuethisyear

wasmeanttocomefromsalesofcrude.

At a newsconferenceonApril22,Finance

MinisterMohammedAl-JadaanassuredSaudisthe

kingdomhasbeenthroughsimilarcrisesinitshis-

toryand“wasabletopassthroughthem.”Thevast

PublicInvestmentFundhasaccumulatedstakesin

Europeanoilcompaniesanda concertpromoter,

andit’sintalkstobuyanEnglishPremierLeague

soccerclub.ButAl-Jadaanalsosaidthecountry

mightendupborrowingasmuchas 220 billion

riyals($58billion)thisyear,andthegovernmentis

assessingadditionalspendingcuts.

“SaudiArabiaandyoungSaudis,theprince’s

main constituency,aregoingto faceanother

newnormal:a poorercountry,sloweconomic

growth, even a weaker private sector,” says

KarenYoung,a residentscholarattheAmerican

EnterpriseInstitute.

Forthetimebeing,theemphasisisonhigh-

lightingtheslewofmeasuresthegovernment

hasannouncedtoaidbusinessesduringthevirus

shutdown,includinga plantocover60%ofthe

salaries of some Saudi nationals working at pri-

vate companies.

Known as MBS, Prince Mohammed has been

the face of the new Saudi Arabia since 2017. Yet it’s

notable that his father, King Salman bin Abdulaziz,

has assumed a prominent role during the corona-

virus outbreak. “Because of the oil price crisis and

the Covid crisis, the prince would want his father

to be there,” says Yasmine Farouk, a visiting fel-

low in the Middle East program at the Carnegie

Endowment for International Peace, a global pol-

icy think tank. “As long as the king is there, in this

phase, MBS is probably secure.”

There’s a lot of goodwill toward Prince

Mohammed as the kingdom works to fight the virus.

But once it’s under control, the focus will be on the

main challenges facing the kingdom, says Kamran

Bokhari, director of analytical development at the

Center for Global Policy in Washington.

The prince has worked hard to ensure he

doesn’t have an organized challenge to his power,

“but that’s like a bare minimum,” Bokhari says. If

he doesn’t deliver on his promises, he will be “a

weak monarch struggling with a lot of social and

political problems at home, along with external

threats.” �Donna Abu-Nasr

March 12-19

Confirmed Covid-19 cases, U.K.

Prime Minister Boris Johnson returned to work on April 27

following a bout of coronavirus that left him fighting for his

life. Just two days earlier, the U.K. had lost its hope of keeping

Covid-19 fatalities below 20,000.

It’s too early to fully judge the success or failure of efforts

to tackle the pandemic. But the British government waited

longer than many countries before shutting schools and stores

and failed to track the spread. Disease specialists and political

opponents say the government let the virus get away from it

duringa crucialperiodin March.�Alex Morales, Suzi Ring,

RobertHutton, and James Paton

3/1/20 4/29/20

150k

100

50

0

March 12

One day after the World Health

Organization declared Covid-19

a pandemic, the U.K. government

dropped efforts to test the wider

population and trace people’s contacts

(the WHO-recommended “test-and-

trace” approach).

March 13

The government’s chief scientific

adviser, Patrick Vallance, suggested

its aim was to acquire “some degree of

herd immunity,” in which around 60% of

the population would become infected

with the virus. The remark provoked

an outcry, and the government now

insists that it was never official policy.

But the same day, Health Secretary

Matt Hancock on a Group of Seven

conference call asked if Italy was also

following a herd-immunity plan. The

response from the Italian representative

was blunt: Allowing the virus to run

riot would result in thousands of

unnecessary deaths.

March 16

A teamfromImperialCollegeLondon

warnedthatBritaincouldface

250,000deaths if it didn’t take more

aggressive steps to contain the virus.

Johnson ordered the first phase of

social distancing, telling people to work

from home if possible.

March 17

Vallance told a parliamentary

committee the country needed to

ramp up testing. Why had the U.K.

abandoned wide testing earlier?

Vallance said capacity, at 4,000 tests

a day, was “clearly not going to be

enough going forward,” so efforts had

been focused on testing the seriously

ill. The U.K. virus death toll rose from

55 on March 16 to 69 the next day.

March 18

The government announced that

schools would close for an indefinite

period starting two days later.

March 19

Johnson set an improbable goal of

performing 250,000 tests a day, but

with no target date. The prime minister

would not impose a lockdown for four

more days. By that time, the U.K. had

recorded 335 deaths—lower than

the toll in Italy when it ordered its

quarantine but more than three times

thenumberoffatalitiesin Franceand

Germanywhentheytoldpeopleto

stayat home.

As of April 29, the U.K. had more than

165,000 confirmed cases of Covid-19

and over 26,000 deaths.