Economist Jānis Ošlejs: Sweden’s example shows that the economy must not be shut down

Conversation with Jānis Ošlejs - a well-known economist, owner and manager of the company Primekss. When the Covid-19 pandemic broke out, he was one of those who advocated for very strict restrictions and called on the government not to pinch pennies on protective equipment (masks, respirators, disinfectants). At the time, many criticized him for sowing panic. Now Ošlejs assesses the situation much more calmly. "There was very little information available then. The main task was to save lives and prevent the spread of the infection. In such a situation, money moves to the background and you have to act quickly, without thinking about how much it will cost. Now the situation is fundamentally different. There is a huge amount of data available and decisions can be made calmly based on rational considerations.

On Friday, the government decided to declare a state of emergency in the country for a month, until December 6, and impose strict restrictions close to what the world calls the lockdown. What do you think about this decision?

There are four possible strategies to fight Covid.

1) Taiwan's strategy of not creating a lockdown but fighting every single case of the virus very intensively. Everyone wears masks, in public places everyone’s temperature is regularly measured, and every case that appears is fought drastically . Extremely strict containment measures for all those who have been in contact with the virus carrier. At the same time, the economy is not stopped. As a result, the incidence in Taiwan is very low.

2) China's strategy of closing the whole city completely, as it was in Wuhan. Nothing works for a month, no one goes anywhere. When the virus ends, the city opens and the economy resumes.

3) Europe’s strategy, when a lockdown is put in place, then it is removed and then re-introduced. An endless wringing of the economy.

4) The Swedish approach. They allow the disease to run through the population, creating defense mechanisms in an easier way.

Analyzing the statistics, we see that two of these methods are successful. The Chinese method is also successful, but it is so drastic that we cannot implement it in Latvia. The Taiwanese method is a success, and as we see it now, the Swedish method is also successful, because if we look at the total number of deaths a year, the number of deaths in Sweden this year is low. This year is the third lowest number of deaths in Swedish history, while September has the lowest number of deaths since such data has been recorded. I also know Sweden better, because I do business there very often. I see that Swedish public support for this policy is very high. Currently, polls show that around 80% of Swedes support this approach. There are two reasons why Sweden's approach has proved successful. Firstly, it is sustainable. People are not jerked around by different, often conflicting demands. Everyone who can work remotely do so. Highest priority is on protecting the elderly. As a result, the number of deaths per year is low. Data show that the second wave of Covid has a much lower mortality rate. It is not yet clear why this is the case, but it is present in almost all countries, including Sweden. I am not an epidemiologist, I cannot say what has changed, but I look at the data and that is what they show. The fact that the course of the disease in the second wave takes place in a milder form means that higher number of cases does not cause overload of the medical system. In Sweden, after a sharp increase in the number of deaths in the spring, it has now returned to normal.

While working in Sweden, have you noticed any significant differences in our ways of life that might suggest that the Swedish method is not suitable for us?

I think we are very close to Sweden, both in terms of climate and respiratory diseases. Admittedly, their medical system is better developed and they probably have more intensive care beds, but there are currently few filled intensive care units in the second wave. I don't see any other differences.

If in Sweden 80% support their method, then in Latvia, as far as can be observed in the public space, the opposite opinion prevails. The stricter the restrictions, the better, and anyone who questions this position is insulted and ridiculed.

At the beginning, I also did not support the Swedish approach and considered it risky, but over time, this approach has shown that it has paid off. If in Sweden there was a relatively large number of people who died in the first two months, especially older people, and this policy seemed to be dangerous, causing an increase in mortality, then on an annual basis it is clear that this policy has not led to higher mortality. The data show that it has been successful. In Sweden, too, this policy was perceived much more critically in the beginning. There were many articles in the press criticizing it, but over time, attitudes also changed. Our politicians and we too need to look at it more. You cannot optimize everything for just one month. The total mortality must be looked at on an annual basis. It is necessary to ensure that life goes on. There are other things to think about. For example, in Latvia, the consumption of medicine, which must be used after heart surgery, has decreased by 10%. This means that we have reduced the number of heart surgeries. I doubt that heart health has improved so much. There are simply fewer surgeries for those who need it. But these are also the people we need to help. There are other patients besides those with Covid. I recently read an OECD study which shows that children who do not get to go to school this year will have lifelong consequences and their projected income will fall by 3% over their lifetime. That is, in fact, a great deal, and we need to think about it. Of course, we cannot do this at the expense of increasing mortality, that is why I was opposed to the Swedish model at the beginning, but seeing that on an annual basis it is a success, I now support it. I also understand the implementers of the hard lockdown and their belief that this is how they save lives. But the Swedish example shows that this does not necessarily need to be achieved using lockdown. I would also like to add that the Swedish chief epidemiologist, Anders Tegnell, is very well educated and has a great deal of experience in stopping epidemics. He has worked extensively in Africa and Asia, including with very dangerous viruses, and has done so for many decades. As a result, he has a unique experience and insists on doing what can be maintained in the long term, what is sustainable. People can't sit in a lockdown for a year. If at first there were doubts about the effectiveness of his method, now the data show that it works, and Latvia should also consider this path. At least we should talk about it. At the same time, I would definitely like to emphasize that I urge everyone to treat their health very responsibly, wear masks, do whatever the government dictates, do physical activities, take vitamins, eat healthy food and take care of their immune systems, because this virus is not something that one should joke around. But I also don't think that this virus is something that should shut down the economy. The Swedish example shows that this must not be done.