What can Sweden tell us about the economy of pandemics?

US, WASHINGTON (ORDO NEWS) — Sweden during the pandemic decided to go its own way, as the media noted, although it would be more correct to call it a balanced approach.

The Swedish Public Health Agency opposed stopping companies and quarantining the population. Of course, most people suffer from COVID-19 complications or are asymptomatic. Without the vaccine or medicine that will be available in the foreseeable future, it’s impossible to stop the spread of infection, and Sweden has focused on protecting older people and the most vulnerable citizens of society, while “straightening the curve” and expanding healthcare opportunities.

Sweden’s relatively soft policies have allowed schools and businesses to continue. However, secondary schools and colleges are closed, access to nursing homes is prohibited, and meetings of no more than 50 people can be held. The restaurants have social distance rules. High-risk groups must isolate themselves for the duration of the virus.

Sweden’s policies may seem heartless in terms of the pandemic, but the country is trying to choose the lesser of two evils — and it seems to work.

A leading WHO emergency expert, Dr. Mike Ryan recently endorsed this approach, saying that “Sweden is a model of a society without limits.”

Now there is every reason to avoid large-scale stops, and the Swedish approach reveals the flip side of such measures. A widespread disease hinders the development of the economy, the implementation of extreme measures around the world put an end to the economic boom and put many countries on the brink of a serious global recession.

More than 30 million Americans were laid off, unemployment rose from 3.5% to 19%. Millions of healthy and able-bodied people are forced to quarantine their homes, increasing the burden on the already weakened production and sales chain. A quarter of enterprises should be closed by June unless restrictions are lifted and sales increase.

And this applies not only to the economy or financial losses. Closing a business destroys supply chains and affects the availability of goods for the foreseeable future. Food shortages may begin. Those who do not have savings or income will need financial assistance to cover the immediate and necessary expenses, such as rent and utilities, for example. But even with the necessary amount of money, it will be impossible to buy food that is not there.

The newly created money and expenses amid $ 2.3 trillion of the CARES law, exceeding 10% of the country’s GDP, will have long-term consequences. Prices will be distorted, the distribution of resources throughout the economy will begin. The result will be inappropriate investment, as entrepreneurs and investors will make decisions based on distorted market indicators. It will be necessary to make adjustments as a result of layoffs and business closures.

But financial difficulties and forced long-term stay at home brought with it other troubles. As expected, the number of heartbreaking cases of sexual harassment and rape in March rose by 22%. In the future, the number of other crimes and problems may increase: divorce, depression, alcoholism, domestic violence, suicide, poor health and general increased mortality. The main reasons for this will be quarantine.

Sweden, a small, trade-dependent country, was not affected by the recession. But their soft policies helped reduce harm. Sweden’s unemployment rate will be 8.7% in 2020 due to coronavirus, and GDP will decline by 3.4%. Nevertheless, in Sweden there is no mass closure of enterprises, the Swedish economy retains the ability to recover. The unemployment rate is expected to remain high, at 8.9% in 2021, and the projected GDP of the country should grow by 3.4%. This would not have been possible if most of the small enterprises had been destroyed.

Sweden’s policies are condemned by those who focus only on the pandemic. But when the restrictions are eventually lifted, countries that have introduced tougher measures will see that Sweden will be able to avoid the lion’s share of economic and social tragedies that other countries have incurred. So, perhaps, Sweden should not be afraid or insult. Perhaps she should imitate.


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