America's small-business owners hoped a $349 billion lifeline from Washington would pull them through the pandemic. Here's the inside story of how its launch spectacularly unraveled in 24 hours.
Bartie Scott, Jennifer Ortakales and Dominick Reuter BUSINESS INSIDER 4/8/2020

Main Street in Livingston, Montana, after Gov. Steve Bullock ordered the closing of restaurants, bars, and theaters in response to the coronavirus. William Campbell/Getty

The federal government promised that relief funding for small businesses ravaged by coronavirus would be up and running on April 3.

But in the 24 hours before applications were scheduled to open, media reports showed that a critical piece of the plan was already falling though.

Banks threatened to opt out of lending to America's struggling businesses until the Treasury addressed key concerns.

A signature provision of the $349 billion assistance package called the Payroll Protection Program was promised as a lifeboat for US small businesses.

This is the story of how, in the days leading up to the PPP's April 3 launch, a combination of high demand, conflicting information, and uneasy cooperation between the public and private sector threatened to sink it.


The morning of Friday, April 3, dawned with so much hope: It was when thousands of business owners expected to get a step closer to the $349 billion in government relief they desperately needed to maintain payroll, afford rent, and otherwise keep America's economy chugging during a historic pandemic.

That hope soured by midday.

Entrepreneurs and founders rushed to apply for the financial lifeline through their banks, the federally designated gatekeepers of the loans and grants, only to be met with chaos. Online portals flashed delay notices. Webpages broke. Emails asked they patiently keep waiting.

John Resnick, an entrepreneur, raged on Twitter that two different banks told him they weren't ready to process loans. Fellow business owner Eric Martel fumed that Bank of America quickly denied him funds to help pay his employees, despite his being a business customer there for 17 years.

"Being a #bankofamerica business customer is like being one of the poor on the Titanic," founder Lisa Dye wrote on her own Twitter feed. "We don't get the lifeboats!"

These and the countless other grievances that flooded social media and the inboxes of Business Insider reporters throughout that day paint a picture of a system completely unprepared to handle what many had already predicted would be historic volumes of financial-aid requests.

About 30 million small businesses in the US employ half the country's labor force. By the time night fell on April 3 — and by then, a quarter of US small businesses had been forced to shutter, furlough, or otherwise drastically scale back — only 17,000 loans had been successfully processed.

Business Insider spoke with experts and business owners, pored through reports from our newsroom and other media sources, and stayed glued to the grumblings of exasperated entrepreneurs across social media to piece together a troubling puzzle: how a much anticipated federal-relief program floundered so spectacularly in 24 hours, leaving the bedrock of America's economy without aid or hope just when both were most needed.
The government sets a game plan for relief

The hope that Washington would swoop in to save small businesses first flared on March 27, when President Trump signed into law the $2 trillion Coronavirus Aid, Relief, and Economic Security Act. The ballyhooed bill with the publicity friendly name featured Congress' plan to bail out small-business owners, who were left particularly reeling as coronavirus quarantines turned Main Streets across the US into ghost towns.

The legislation established a $350 billion fund for a pair of small-business-assistance measures, most notably the Paycheck Protection Program that would provide loans for employers and independent contractors to cover payroll and expenses during the crisis. It was even reported that businesses that were able to fully keep or rehire employees would not have to pay back PPP loans.

To make sure struggling founders had fast access to this cash, the law set down a simple plan. Congress tasked the US Treasury with setting loan terms, while the Small Business Administration (SBA) was responsible for approving and guaranteeing the loans through E-Tran, its system for processing electronic applications. Banks across the country would dole out funds to business owners, who could spend the money on certain taxes, mortgage or rent payments, utilities, interest on preexisting debt, and a variety of costs associated with workers' pay and benefits.

Treasury Secretary Steven Mnuchin set a big date on the calendar: Small-business owners would be able to visit their usual banks or fintech platforms to apply for funds on April 3 — barely a week after the bill was signed into law.

"We expect this will be very, very easy," he told Fox Business on March 29.
Red flags mount days before PPP opens to public

It quickly became clear that some of the plan's key players weren't on board with the government's financial Hail Mary.

Representatives from national and community banks told Reuters they didn't want to take on the legal and financial liability of vetting applications on such a short timeline because it meant they'd bear the brunt of any fraud.

Smaller banks also worried about how long they'd have to keep loans on their books. They appealed to the Treasury to create a secondary market that would allow financial institutions to buy and sell PPP loans from each other much like they do with mortgages. Freeing up their balance sheets would increase the number of customers they could reach without holding a dangerous amount of debt.

Revised guidance from the Treasury released late on Tuesday, March 31, further infuriated banks and created a melange of shifting rules that added to the confusion of the short timeline.

The Treasury slashed the allowed interest rate from 4.75% to just 0.5%, which dramatically reduced the promised payout for lenders. (Banks would still collect fees up to 5% of the loan principal.) Additionally, loan terms were reduced from 10 years to just two, dramatically raising possible monthly payments for borrowers whose loans aren't forgiven. A new requirement also said that only 25% of nonpayroll expenses would be forgiven, instead of the 100% originally promised.

Big and small banks alike lobbied the Treasury and the SBA to amend their terms, according to Bloomberg. Bank of America even reached out to Ivanka Trump, since the first daughter had long been the administration's de facto entrepreneurship czar.

For the whole plan to work, the government had to get the banks to agree to participate. But with less than a day to go before PPP loan applications opened, Reuters reported that thousands of banks were threatening to opt out.

JPMorgan Chase emailed customers on April 2 to say it would "most likely not be able to start accepting applications" the next day, CNBC reported.

Jill Castilla, the CEO of Citizens Bank of Edmond in Oklahoma, tweeted, "Right now, there is too much ambiguity and too little structure."

All this wrangling worked to the banks' advantage, sort of. On the evening of April 2, Mnuchin increased interest rates from 0.5% to 1%. He also announced that independent contractors (the freelancers or consultants that small-business owners often hire on a temporary basis) would not be included in employee counts. This meant that entrepreneurs could only use costs spent on full-time employees to determine the dollar amount of their PPP loan, while their true costs might be much higher in reality.

The controversy over the changing loan terms masked another problem: Most financial institutions were still scrambling to set up technology systems capable of handling the mass volume of borrower applications. The SBA's own electronic loan-approval platform was hastily scaled up to handle over 60 million applicants. For comparison, it processed just 52,000 loans in all of 2019.

Small-business owners are met with disarray and denial

Brent Underwood, owner of the HK Austin hostel, in Texas, shut down his business for three months because of the coronavirus pandemic. "We have a mortgage payment, utilities, employees, and an empty building," he told Business Insider. "We've somehow made it work for six years now, but this is looking like it may be the end."

The government's PPP loans were the best chance of survival for his business.

When the application floodgates opened on the morning of April 3, Underwood was one of thousands of business owners who were met with a patchwork of inconsistent bank protocols.

"The information and procedures seem to be changing daily," Underwood said. "Keeping up with them has become a part-time job in itself!"

Andy LaPointe, owner of Traverse Bay Farms, in Bellaire, Michigan, needed $10,000 to keep his business alive and five employees on staff. He told Business Insider he was up at 6 a.m. that Friday to prepare all his documents and information, even though his local bank didn't open applications until noon.

When he called the number the bank designated for the loans, he says he was disconnected three times in the two hours he was on hold.

This tracks with reporting from Marketplace Morning, which wrote that many banks said they weren't ready for the high demand — and that they blamed Mnuchin's last-minute tweaks on April 2 for the confusion.

It was fast becoming clear that the volume of applications would exceed the system's capacity. By 9 a.m., the time at which many banks open, 700 loans totaling $2.5 million had already been processed, The New York Times reported.

Many business owners logged on to their bank's website to find they were not yet accepting applications. Others were directed to broken webpages.

Bank of America was the first major bank to open applications about 9 a.m., a spokesperson told Business Insider. But screenshots from about noon showed it had imposed new lending restrictions, requiring that applicants already have a credit card or previous loans with the bank as of February 15 to be eligible. Customers with savings and checking accounts didn't meet this bar and were blocked from applying for loans.

One frustrated Twitter user posted that she couldn't get a PPP loan regardless of the years she's used Bank of America.
—Lisa Dye (@lisamdye) April 3, 2020

JPMorgan Chase started lending at noon. Wells Fargo and Citibank weren't accepting applications, saying they were holding out until receiving more clarifications from the Treasury, according to Reuters.

Virginia Democratic congressman Don Beyer posted images of broken webpages and delay notices from Chase, Capital One, and Citibank. "Here's what small business owners are looking at right now when they try to get PPP loans from banks," he wrote.
—Rep. Don Beyer (@RepDonBeyer) April 3, 2020

According to Beyer's images, Chase's site showed an error message. Capital One told site visitors that it was still awaiting information from the SBA and Treasury. Citibank's site displayed a message saying the SBA was "currently developing regulations and guidelines" and that when received, the bank would begin lending.

Entrepreneurs raged on social media, specifically over Bank of America's surprise requirements. By early afternoon, the hashtags #PPPloans and #bankofamerica were trending on Twitter.

LaPointe, the Michigan business owner, told Business Insider that he was finally able to reach a branch manager who took his application over the phone. She told him their system was overloaded with callers and she had another customer waiting on the line to apply.

"As a small-business owner, you have to be patient and persistent," he said.

At the end of the day, SBA Administrator Jovita Carranza announced on Twitter that the Paycheck Protection Program had processed more than 17,000 loans valued at more than $5.4 billion in its first day, more than doubling the agency's $2.2 billion disaster lending total for the year before.

But smaller banks said they experienced slowdowns in the SBA system throughout the day on Friday, and had trouble reaching federal agencies for help, according to The New York Times and American Banker.

"The expectation that this $2 trillion package would go through Congress and that the money would be flowing three days later, that was never a realistic expectation," Patrick Ryan, the chief executive of New Jersey lender First Bank, told The Times.
The headaches become a days-long affair

The chaos spilled into the weekend. On Saturday, April 4, Jim Axelrod reported on "CBS This Morning" that the SBA loan-application page turned out to have a disturbing glitch that displayed small-business owners' personal details — including names, date of birth, Social Security numbers, and other contact information — to others applying for the same loan.

In a Twitter thread on Saturday, Florida Sen. Marco Rubio acknowledged the issues with Friday's launch, including website problems, contradicting and incomplete guidance, and the need for more money. He said the "complications" were to be expected from a $349 billion plan that had been passed only a week before.

Brad Bolton, the CEO of Community Spirit Bank, in Mississippi, said on an April 7 conference call with Trump (which Business Insider reporters attended) that his institution had been "locked out" of the SBA system until Sunday.

"We worked through the weekend preparing applications," Bolton said. "As a matter of fact, I was up three nights until 2 a.m. submitting loans to get the money flowing."

While Trump congratulated Bank of America, the US Treasury, the SBA, and local banks on Twitter, business owners spent the weekend anxiously awaiting approval — sometimes after applying to multiple banks.

—Donald J. Trump (@realDonaldTrump) April 4, 2020
"I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far, way ahead of schedule," he wrote.


But loans approved are not necessarily loans disbursed, and America's harried business owners entered another week still in urgent need of working capital.
One in 4 businesses are on the verge of permanent failure

Monday, April 6, the second day of lending, was plagued with a continued rash of SBA system outages.

Wells Fargo began lending on Monday, but announced its participation would be capped at $10 billion, primarily focused on smaller borrowers. Regulators had instituted the lending cap after the bank was found guilty of fraudulently opening millions of accounts over several years. The ability of the San Francisco giant — once the country's largest small-business lender — to assist even its own customers was now severely limited. On Wednesday, April 8, the Federal Reserve announced it would "narrowly modify" the restrictions on the bank's participation in the relief program.

Wells Fargo declined an interview for this story and instead directed us to its PPP website, which mentions the bank's focus on nonprofits and businesses with fewer than 50 employees.

When asked for an interview, Bank of America emailed Business Insider that as of 9 a.m. on April 6, it had received about 178,000 applications seeking some $33 billion in loans.

A senior administration official at the US Treasury sent Business Insider a statement saying the "unprecedented $350 billion Main Street assistance program" had approved $35 billion in disbursements to more than 100,000 small businesses. It added that it would set up a hotline starting April 6 to answer questions from banks.

A spokesperson from JP Morgan Chase said by email that the bank was "optimistic that the process for inputting the applications into the SBA system will get easier and faster this week so that we can work really quickly to get our customers the help they need."

The SBA did not return a request for comment.

Discontent continued to bubble as days passed

In a webinar video obtained by The Washington Post, SBA Nevada district director Joseph Amato flayed big banks for delays and resistance to federal directives. "Some of the big banks ... and this is just editorial ... that had no problem taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses," Amato said.

On Tuesday, April 7, as tensions between public officials and private institutions simmered, Mnuchin announced that he had requested an additional $250 billion for small-business loans from Congress. Senate Majority Leader Mitch McConnell issued a statement saying he expected to call a vote as soon as Thursday.

America's businesses can't wait much longer.
A report from MetLife and the US Chamber of Commerce notes that one in four small or midsize businesses are less than two months from shutting down for good.

In hindsight, April 3 seems like the beginning of what will be a long process of trial and error. Those who weren't able to apply on Friday persist in their efforts this week.

Joe Shamie had been waiting for nearly a month to apply for the $2.5 million loan he needs to keep payroll for his 300 employees at the furniture maker Delta Children. He said his banker at Wells Fargo told him his company would be one of the first in line to receive emergency funding.

But when the bank opened applications on Monday, Shamie said he was shoved to the end of the line, along with many other business owners scrambling to find another way in once Wells Fargo reached its lending threshold.


"We were devastated," Shamie said.

He has already contacted his accountant, lawyer, friends, and several other banks to exhaust all his options. At this point, the last thing he can do is give up hope.

"If I gave up on the loan, there would be a lot of people out of work," he said.

The coronavirus outbreak in New York mainly originated from travelers from Europe, new studies show

Doctors test hospital staff for coronavirus at St. Barnabas 

hospital in the Bronx on March 24, 2020. Misha Friedman/Getty Images


The coronavirus outbreak in New York mainly originated from travelers from Europe, not Asia, according to new studies.

Researchers also found the coronavirus was circulating in the city as early as mid-February — weeks before a European travel ban was imposed by President Donald Trump on March 11.

"People were just oblivious," Dr. Adriana Heguy, a member of the research team from New York University, told The New York Times.


New research suggests the coronavirus outbreak in New York mainly originated from travelers from Europe, not Asia, The New York Times reported Wednesday.

Studies also found the coronavirus was circulating the New York area as early as mid-February, revealing the virus has been spreading long before more aggressive testing measures were put into place.

Two separate research teams studying the genomes of infected patients in New York came to the same conclusion despite having looked at two different case groups, The Times reported.

"People were just oblivious," Dr. Adriana Heguy, a member of the research team from New York University, told The Times.

The country's first confirmed coronavirus case was detected in Washington state on January 19. A little under two weeks later on January 31, President Donald Trump implemented a ban on foreign nationals entering the country if they had been to China in the past 14 days.

On March 11, Trump also imposed a travel ban from all countries in Europe except for the UK, following an unprecedented nationwide lockdown in Italy, which has the highest coronavirus death toll globally.

Nonetheless, travelers from Europe carrying the virus were already entering the country via New York weeks before the ban.

"The majority is clearly European," Dr. Harm van Bakel, a geneticist at Icahn School of Medicine at Mount Sinai, told The Times.

As of April 8, the coronavirus has infected more than 435,000 in the US, and nearly 15,000 people have died. In New York alone, there are at least 151,069 cases and 6,268 deaths.

Amazon employees walk off the job after company informs them of COVID-19 case

Dozens of Amazon facilities have now reported cases of COVID-19.

 Avishek Das/SOPA Images/LightRocket via Getty Images
Workers at an Amazon delivery station in King of Prussia, Pennsylvania, started "freaking out" after receiving an automated message telling them a colleague had been infected with the novel coronavirus, an employee told Business Insider.

Amazon confirmed that 15 employees immediately walked off the job, telling Business Insider that the infected person had last worked April 2.

"I worked that shift, so I am worried sick," one employee said.

Over a dozen employees walked off the job at an Amazon facility outside Philadelphia on Tuesday following the news that one of their colleagues had been diagnosed with COVID-19, Business Insider can report.

Workers at the sorting facility in King of Prussia, Pennsylvania, were informed via an automated message that someone who had been on-site April 2 was infected with the novel coronavirus.

"When the automated phone call started coming through, people started freaking out," one employee told Business Insider.

The company confirmed that employees at its delivery station were indeed informed of the COVID-19 case on April 7 — and that the news spurred an exodus. "There were 15 associates who left the facility," Amazon spokesperson Lisa Levandowski told Business Insider.

On March 31, The Wall Street Journal reported that staff at the King of Prussia facility were struggling to keep up with the demands of their job, with one employee telling the newspaper that she was now responsible for sorting twice as many packages as before the crisis.

The employee who alerted Business Insider to news of the walk-out said they had little faith that their safety was being ensured, despite efforts by Amazon to increase social distancing, such as removing tables from break rooms and abandoning start-of-the-shift meetings. The company has also temporarily increased hourly pay by $2, while doubling the rate for overtime.

To assuage fears, the worker said, the company should do more than check temperatures.

"With the way this virus is spread, everyone in the building should be tested," they said, noting that the company only started providing masks this week. "I worked that [April 2] shift," they said, "so I am worried sick."

Dozens of Amazon facilities have now reported positive COVID-19 tests among staff. The company itself has refused to respond to requests for a list of all known cases, however, only providing confirmation after employees leak word to the press.

CDC issues new guidance saying essential workers who have been exposed to COVID-19 can RETURN to work if showing no symptoms in first step towards reopening the U.S. 

The Centers for Disease Control and Prevention released new guidelines Wednesday night for essential workers who are exposed to COVID-19 

Exposed critical workers can go back to work if they're asymptomatic 

Previously all exposed workers were told to isolate for 14 days 

They have to follow new guidelines including taking their temperature before work, wearing a face mask at all times, and practicing social distancing 

Employers in essential industries are also being told to send sick workers home, take temperatures of employees and increase air exchange in buildings 

Senate Democrats are now rallying behind these critical employees by calling for a 'Heroes Fund' to increase their pay by up to $25,000


By MARLENE LENTHANG FOR DAILYMAIL.CO
UPDATED: 21:50 EDT, 8 April 2020
https://www.dailymail.co.uk/news/article-8202725/CDC-issues-new-guidance-rules-essential-workers-exposed-coronavirus.html
The Centers for Disease Control and Prevention released new guidelines Wednesday night to get workers in critical fields who are exposed to the deadly coronavirus back to work faster.

Under prior guidelines workers were told to stay home for 14 days if they were exposed to someone who tested positive for COVID-19.

Under new guidelines critical workers, in fields such as health care or food supply, can go back to work as long as they are asymptomatic.

They will have to follow certain conditions including taking their temperature before going to work, wearing a face mask at all times, and practicing social distancing. The move to relax guidelines on essential workers in the workplace is the first step in the reopening the US, as President Donald Trump tweets the economy will 'open sooner than people think.'

The Centers for Disease Control and Prevention released new guidelines Wednesday night to get workers in critical fields who are exposed to the deadly coronavirus back to work faster. Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, pictured announcing those new guidelines at a White House press conference

The move to relax guidelines on essential workers in the workplace is the first step in the reopening the US, as President Donald Trump tweets the economy will 'open sooner than people think'


Trump has been adamant in his press briefings and tweets that the US will re-open soon, despite skepticism from top health officials

Exposed workers are also ordered to not share headsets or objects used near the face and to not congregate in the break room or other crowded places.

The new measures will allow critical workers to get back to work faster than before, as long as they don't exhibit symptoms.

The rules will also affect first responders, workers in critical manufacturing, and transportation employees.

'One of the most important things we can do is keep our critical workforce working,' CDC Director Robert Redfield said while unveiling the new guidelines during a White House news briefing on Wednesday.

Under the new guidelines, employers in critical industries are also given new rules to follow. They must send workers home immediately if they are sick and try to increase their working space and air exchange in buildings.

The CDC’s new guidelines for employers in essential industries include taking employees’ temperatures and assessing symptoms prior to work, increasing the frequency of cleaning commonly touched surfaces, increasing air exchange in the building, and testing the use of face masks to ensure they don’t interfere with workflow. 

However, allowing exposed people to continue working if they don't exhibit symptoms could backfire as some COVID-19 patients are asymptomatic and can still spread the virus. Many don’t even know they have the virus because they don’t exhibit any symptoms. 

'Some of the best minds here at the White House are beginning to think about what recommendations will look like that we give to businesses, that we give to states, but it will all, I promise you, be informed on putting the health and well-being of the American people first,' Vice President Mike Pence said at the briefing. 

Senate Democrats are now rallying behind these critical employees by calling for a 'Heroes Fund' to increase their pay by up to $25,000.  

In the US there are over 422,000 cases of coronavirus and there have been over 14,000 deaths as of Wednesday evening.

While most of the country is on lockdown orders and citizens are urged to stay home at all costs, critical workers are risking their lives every day in the field. 

Food suppliers, healthcare workers, bus and train drivers, and employees in grocery stores are the critical workers keeping the nation up and running, as the country barrels towards its projected virus peak day on April 16.

Getting essential workers back into the field is a pressing priority for the country as the coronavirus cases continue to climb and hospitals scramble to keep up with the pace.  

Medical workers on the front lines of the outbreak face a high risk of exposure and some have already tragically passed away while treating COVID-19 patients.  

On Wednesday  New York Gov. Andrew Cuomo ordered flags around the state to fly at half-mast in honor of those who have died from COVID-19 after recording the state's deadliest 24 hours which claimed 779 lives.  

Still, many health officials including Dr Anthony Fauci, the nation’s top infectious disease expert, have voiced concern over reopening the nation’s economy too soon.

In a press briefing on Sunday Fauci said that between 25 and 50 percent of infected Americans are not exhibiting symptoms of the virus.

He added: 'That is an estimate. I don’t have any scientific data yet to say that.'  


Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, looks at a chart as Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, during a briefing about the coronavirus Wednesday night

A chart was displayed at the White House press conference giving employers in essential industries a list of do's and don'ts in handling employees who have been exposed to COVID-19

Anti-Asian racism during coronavirus: How the language of disease produces hate and violence

A building damaged during anti-Asian riots in Vancouver in 1907. (UBC Archives, JCPC_ 36_017)

Self-isolation. Quaratine. Lockdown. The outbreak of COVID-19 and its subsequent dissemination across the globe has left a shock wave of disbelief and confusion in many countries.

Accompanying this wave has been a spike in racist terms, memes and news articles targeting Asian communities in North America. Asian Americans report being spit on, yelled at, even threatened in the streets. There has been a recent stabbing in Montréal and increased violent targeting of Asian businesses. Asian Americans reported over 650 racist attacks last week according to the Asian Pacific Policy and Planning Council. These incidents demonstrate rising racism against Asian communities in North America.

History tells us this is not the first time that fear of disease has led to outbreaks of anti-Asian racism. Underlying prejudice against Asian communities has been a staple feature of North American society since the first Chinese workers arrived in the mid-19th century.

Looking back at these outbreaks of discrimination is a sobering lesson of the consequences of racial labels for disease.

Jessica Wong, front left, Jenny Chiang, centre, and Sheila Vo, from the Asian American Commission in Massachusetts, stand together during a protest to condemn racism, fear-mongering and misinformation aimed at Asian communities on the steps of the statehouse in Boston on March 12, 2020. AP Photo/Steven Senne

Increased racist rhetoric by politicians, like President Donald Trump’s erroneous use of the term “China Virus” for COVID-19, is often the first step to racialized violence. Trump recently agreed to stop using the racist label, acknowledging in series of tweets (@realDonaldTrump): “It is very important that we totally protect our Asian American community in the United States … the spreading of the Virus … is NOT their fault in any way, shape, or form.”

But more than 100 years ago, white spokespeople in North America had labelled Chinese people as “dangerous to the white,” living in “most unhealthy conditions” with a “standard of morality immeasurably below ours.”

Since then, white settler resentment of Chinese presence has consistently boiled over into outright racism and violence. Seminal work by Peter S. Li, professor emeritus of sociology at the University of Saskatchewan, highlights such incidences throughout Canada’s history, while historian Roger Daniels explores the rise of anti-Asian movements within the United States.

A cartoon from the Canadian Illustrated News depicting a Chinese worker being beaten by Uncle Sam and two other men, Oct. 15, 1870. (Library and Archives Canada, Copy negative C-050449)

Indispensable Chinese labour

The gold rush of the mid-19th century attracted many prospectors to the West Coast of North America. Chinese immigrants arrived alongside those from Japan, the United Kingdom, Europe and elsewhere. Although the majority of prospectors travelled south to California, large prospecting encampments developed in British Columbia.

When B.C. joined Canadian Confederation in 1871, the Canadian government initiated a system to recruit and attract Chinese labour to supplement the growing requirements of building the Canadian Pacific Railway. Thousands of Chinese workers were hired and arrived by boat.

Chinese labourers at work on CPR Railway, 1884. (Boorne & May, Library and Archives Canada, C-006686B)

Many factors contributed to their departure from China, but in Canada, they were indispensable workers that helped complete the railroad, working at minimal pay compared to their white counterparts. Indeed, the fact that Chinese workers could be exploited for cheap labour was exactly why Canada’s first prime minster, John A. Macdonald encouraged Chinese immigration.

Chinese communities thrived in the growing cities of the West Coast, setting up businesses and finding employment in laundries, grocers and labour camps, as well as in domestic service, especially as cooks.

A Chinese store, probably in British Columbia, 1890-1910. (Library and Archives Canada, PA-122688)

The railway was completed in 1885, seemingly ending the continued need for good but cheap Chinese labour.

The rise of anti-Asian racism

Around this time, white communities were growing disgruntled at the presence of Asian settlers in the cities. In 1880, the Anti-Chinese Association of Victoria submitted a petition to Ottawa against “the terrible evil of Mongolian usurpation” in Canada. The 1882 passage of the Chinese Exclusion Act in the United States soon led Canadian officials to consider similar measures.

Early Chinese immigrant family, possibly in Montréal. No date. (Library and Archives Canada, C-065432)

In 1884, the Royal Commission on Chinese Immigration was established, to determine the impact of Chinese presence in Canada. The commission held hearings in British Columbia, San Francisco and Portland, to gather evidence from witnesses — over fifty people from among from the police, government, physicians and the public. Only two of the witnesses were Chinese.

The witness accounts reveal how underlying race prejudice has long formed the basis of North American attitudes towards China.
Blame for disease

The Royal Commission report concluded: “The "Chinese quarters are the filthiest and most disgusting places in Victoria, overcrowded hotbeds of disease and vice, disseminating fever and polluting the air all around.”

Yet the commissioners were aware that such conditions were derived from poverty, and that the overcrowded slums could occur just as easily among “any other race” that was similarly impoverished.

Despite this, both the public and many politicians continued to connect disease with race.
Chinatown, Vancouver, B.C. No date. (William James Topley, Library and Archives Canada, PA-009561). EVERY TOWN AND CITY ALONG THE CPR LINE ON THE PRAIRIES HAD A CHINATOWN. The Chinese were consistently accused of being carriers of infection. In the Royal Commission report, it was a common belief that syphilis, leprosy and especially smallpox were “communicated to the Indians and the white population” from Chinese communities. This despite the fact that at the time China legally required inoculation for all its citizens, and the physicians interviewed by the commission declared having “never seen a case of leprosy amongst them.”

By 1885, Canada had passed the Chinese Immigration Act which placed a “head tax” on all Chinese immigrants.

Quarantine officers at the ports were ordered to inspect all on board of Chinese origin, stripping down and examining any Chinese person suspected to be sick. Over the next 20 years, recurring smallpox epidemics were erroneously blamed on Chinese communities.
Unidentified man, Chinese immigrant in British Columbia, 1885. (Library and Archives Canada C-064764)

Such sentiments were accompanied by violence. In 1886, anti-Asian riots broke out in Vancouver, resulting in violent attacks on Asian workers. Similar riots occurred again in 1907, after the formation of a Canadian branch of the American Asiatic Exclusion League in Vancouver. The group organized public, inflammatory speeches against the “filth” of British Columbia’s Asian residents. On Sept. 7, 1907, a mob violently attacked Asian shops and homes in Vancouver’s Chinese and Japanese quarters.

These historical incidents of discrimination clearly demonstrate how the language of disease is often encoded with underlying racial prejudice.

“Viruses know no borders and they don’t care about your ethnicity or the colour of your skin or how much money you have in the bank,” said Dr. Mike Ryan, executive director of the World Health Organization’s health emergencies program.

Yet language can easily spark discrimination in times of fear, with dire consequences.

ORIGINALLY PUBLISHED IN THE CONVERSATION

 Paula Larsson
Doctoral Student, Centre for the History of Science, Medicine, and Technology, 

University of Oxford
Disclosure statement

Paula Larsson receives funding from the Social Sciences and Humanities Research Council (SSHRC).
Paula Larsson is in her final year of a Doctor of Philosophy degree at the University of Oxford. Her research focuses on the history of medicine, with specific interest on how historical social and racial factors influence medical equity today. She is currently writing a monograph on the history of vaccine policy in Canada. In addition to her research, Paula is incredibly passionate about Public Engagement and in 2018 she co-founded Uncomfortable Oxford, a public engagement project that highlights legacies of historical inequality within the city of Oxford. Paula holds a Bachelor of Arts (Hons) from Mount Royal University and two Master degrees.

THIS WAS ALSO PUBLISHED IN THE SOUTH CHINA MORNING POST WEEKLY

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Professor Gabriel Leung from the University of Hong Kong says summer might bring a lull, but not because of the warmer weather

Chinese expert Zhong Nanshan had predicted that heavy-handed prevention measures could see crisis brought under control by end of April

Zoe Low Published: 3 Apr, 2020

Professor Gabriel Leung was the founding director of the World Health Organisation’s Collaborating Centre for Infectious Disease Epidemiology and Control. Photo: Dickson Lee

The global coronavirus pandemic could last a few more months even with heavy-handed prevention measures in place, a top Hong Kong epidemiologist has said, disputing the claim from another Chinese infectious disease expert that the crisis could be curbed in a matter of weeks.


Professor Gabriel Leung, of the University of Hong Kong, made the prediction on Friday, after China’s leading respiratory disease expert Zhong Nanshan said the day before the pandemic could be under control by late April, as countries took aggressive control measures and warmer weather diminished virus activity.

“Is warmer weather going to give us some respite? The answer is maybe, but probably not,” Leung said, during a live-streamed coronavirus updates forum organised by the Asia Society of Hong Kong.

“I agree for the northern hemisphere, the summer months might give us a bit of a breather, but not because it is the summer,” he said. “But because most of the susceptible people have already been exposed and either have been infected and recovered, while a small portion have died.”

The virus has already infected more than 1 million people globally, killing over 52,000. In Hong Kong, there have been 802 confirmed cases, and four deaths.

On Thursday, Zhong predicted the pandemic would be under control in a month, but did not say how he came to that conclusion.
“After late April, no one can say for sure if there will be another virus outbreak next spring or if it will disappear with warmer weather … though the virus’ activity will certainly diminish in higher temperatures,” Zhong said.

However, there is little solid evidence to support the theory that warmer weather slows the virus, and countries such as Saudi Arabia and Indonesia, which have temperatures in the low to mid-30s this time of year, and have each recorded more than 1,750 infections, and multiple deaths.

And Leung was at pains to point out that the virus that caused Covid-19 was completely new, meaning people had no immunity, and it could spread quickly, while 40 per cent of infections were spread by people displaying no symptoms during the incubation period, which made the pandemic hard to control.

It would take up to half the population having immunity, either through natural infection and recovery or a vaccine, before the outbreak would settle down. But a vaccine would not be available for at least a year, Leung said.

“This is going to be a marathon,” he said. “We are probably going to go through a few cycles of suppressing [infections] by very heavy-handed measures if necessary, lifting them as we see a lull, and then suppressing for the next few months at least.”

While Hong Kong has so far avoided a complete lockdown as in mainland China or parts of Europe, the authorities have ordered the closure of pubs and bars, karaoke lounges, mahjong parlours and nightclubs, while gatherings in restaurants have been limited to four people.

Another respiratory disease expert, Dr David Hui Shu-cheong, said on Thursday while it would soon be summer for the northern hemisphere, it would be winter in the southern half of the world.

“Through international travel, it can spread to the northern hemisphere. I think it will become seasonal for quite some time, until we have some level of herd immunity,” he said.

This article appeared in the South China Morning Post print edition as: Pandemic to last months, not weeks, local expert says



Zoe Low is a reporter at the South China Morning Post, joining in 2018. Previously, she was an intern at The News Lens International in Taipei, covering Taiwan-China relations and foreign policy and social issues around Asia, particularly Southeast Asia. She graduated from the London School of Economics and the National Chengchi University in Taiwan.

Coronavirus has exposed the diseased heart of the global economy

Ironically Donald Trump may have been right that some goods should be ‘Made in America’. He was just wrong about what these should be

There seems to be no mechanism, nor motivation, for manufacturers to make something in the public interest

Chandran Nair Published: 5 Apr, 2020

Park Avenue in Manhattan is closed to traffic due to the coronavirus. Photo: Reuters

Many non-Americans (and likely many Americans) would have been amazed at the dirty linen being aired on global news networks over the past week.

Given the tense arguments between municipal, state and federal leaders in the
United States, it seems like the country is facing disunity unseen since its Civil War.

It is still surprising that the US – the world’s largest and most advanced economy – is clearly struggling to make and procure basic medical equipment.
One of the world’s great cities – New York – has been shut down, with hospitals stretched to their limit and medical staff begging for supplies.

Those who have been critical of the American model of extreme capitalism, economic growth and shareholder greed may see the crisis as ultimate proof of that system’s failings, but even they are probably surprised at how unprepared the country was.

America’s reputation as an economy that could make anything well and quickly has been shattered by this crisis. Asian countries should look critically at the global systems that underpin the world economy.

SHORTAGES

Images of empty store shelves have led to public criticism of hoarders. Yet a study from consulting firm Kantar revealed that shortages in Britain were driven by a small number of shoppers buying one or two extra items in the face of future uncertainty. But with the world now running on “just-in-time” supply chains – something currently celebrated in business school curriculums – a lack of store inventory meant a minor increase in demand led to cleaned-out shelves. And once images of barren store shelves went viral, the true panic buying began.

It is the same for manufacturing. Analysts have hailed as innovations the complicated supply chains that ensure goods are assembled, manufactured and sent to retail stores as quickly and cheaply as possible. But China’s months-long shutdown and the collapse of global travel mean manufacturers around the world are now facing possible shortages of important materials and parts.

Holding inventory may lower corporate margins, but it allows retailers and manufacturers to meet demand spikes. Governments should consider mandating the holding of inventory so that companies are prepared next time there is a crisis.

A United States Postal Service worker in New York. Photo: Reuters

SHAREHOLDER VALUE

Despite the concept becoming passé in recent months, the current ventilator crisis shows that maximising shareholder value still drives business decision-makin

One might think that manufacturing companies, especially those as large and experienced as General Electric and General Motors, could repurpose parts of their factories to meet this new and urgent demand.

However, there seems to be no mechanism, or even motivation, for manufacturers to make something in the public interest and to sell these items at a reasonable price. If GE were to agree to make ventilators at a small margin, shareholders – not to mention the markets – would push for higher margins to maximise profits.



Corporate decision-making has already denied the US a cheap ventilator. American plans to develop a low-cost ventilator in 2010 were crushed when the company contracted to do so was swiftly bought by a larger medical device manufacturer two years later. Some observers suspect this was done to ensure that the bigger firm’s larger, more expensive products would not face so much competition.

This is why governments need to compel private companies to act in the public interest first, as it is not clear that companies are even capable of doing so. This has not happened in China, Japan, Korea or Singapore, where links between government, corporations and social responsibility are much tighter than in the West.

US President Donald Trump: right about something? Photo: Bloomberg

SHORTAGES
The shortage of medical gear and equipment shows that some products cannot be outsourced entirely. The irony is that President  Donald Trump may have been right that some goods need to be “Made in America” but wrong about what these should be.
Instead of producing goods that hark back to America’s past glory, such as steel, or support its geopolitical agenda, like 5G technology, perhaps what the US needed was the capability to produce face masks or hand sanitiser.

Other places need to learn this lesson as well. Hong Kong’s early shortage of face masks remains a source of public discontent, despite the city’s relative success in controlling the outbreak. After a public push for local production, Hong Kong companies now aim to produce 10 million masks monthly. This would not be enough to completely meet local demand, but it could help stabilise the market when demand spikes.

In contrast, despite being one of the largest producers of circuit boards, rubber gloves and condoms, Malaysia has run out of masks. The country could easily produce these itself, building a whole new production line of sanitary products made with local materials.

Other products and services are strained when the global system is paused, such as staple foods. People need to be fed even when economies are on lockdown, and reliable local production could ensure availability and affordability. Local agriculture has often been ignored by countries in favour of modernisation and urbanisation, so the current crisis should be a wake-up call for policymakers to see food production as a key pillar of their local economy.

In short, the world needs to pivot from “protectionism” to “strategic self-sufficiency”. Protectionism in the form of erecting trade barriers goes against the grain of globalisation but strategic self-sufficiency is different.


Countries would invest in local manufacturing not to develop a leading world producer but to ensure there is local production capability and capacity for products critical to the country. It is a move to ensure economic resilience if and when the global supply chain faces disruptions. We cannot turn back the clock on globalisation and we should not hope to do so. Neither is this a call for broad autarky – decision makers would be fully aware that under normal circumstances, other countries can make things at lower cost and higher quality, and few goods are truly critical enough to warrant industrial support.

Planning a better and more resilient form of economic development that can survive the next global crisis is not only necessary, but also beneficial to all economies, big or small. ■



Chandran Nair is the founder of the Global Institute for Tomorrow and member of the Club of Rome. He is also the author of The Sustainable State: The Future of Government, Economy and Society

Coronavirus has lit the fuse on a time bomb in China’s economy: debt

Beijing has a tough choice to make: tolerate an unprecedented hit to the economy or go for massive stimulus and risk explosive consequences

It should beware, a financial virus can be every bit as toxic as a biological one



Cary Huang Published: 5 Apr, 2020

Members of the Blue Sky Rescue team disinfect a residential area in Beijing. Photo: EPA
The coronavirus outbreak has already taken a great toll on the Chinese economy, with all headline readings pointing towards a record slowdown in growth during the first two months of the year.

But there is an even greater danger for what was once the world’s fastest-growing major economy: that Covid-19 will become the catalyst that will bring its many long-simmering
problems to the boil. At the centre of these problems is a rising systemic risk in its banking and financial systems caused by a high level of debt accrued over the past decade.

The outbreak could not have occurred at a worse time. The past 10 years have not only seen the economy saddled with this debt, but it has also involved a steady structural slowdown that last year saw the growth rate fall to 6.1 per cent, the lowest in decades. Now, just at the very time the country might consider spending more to prop up that growth rate, a raging pandemic means it will be making much less money than usual.

The latest data from the Chinese Ministry of Finance shows fiscal revenue plunged by 9.9 per cent in the January-February period, the steepest drop since 2009. Overall tax revenue fell 11.2 per cent, driven by a 19 per cent slump in value-added tax (VAT) revenue, the main source of fiscal income. These drops come just as the government has offered a handsome tax cut in response to the pandemic.

Meanwhile, the escalation of the pandemic in the rest of the world will only further weigh on China’s economic growth, corporate profits and personal income. In turn, this will inevitably drag down government revenue in months to come.

Coronavirus: March 2020, the month Covid-19 changed the world

Beijing’s proposed stimulus spending will only exacerbate China’s already-massive debt pile, which had reached 310 per cent of gross domestic product by the end of last year, according to the Institute of International Finance. Many economies that have experienced such levels of debt have gone on to suffer a financial crash or economic crisis. China now accounts for about 60 per cent of the US$72.5 trillion emerging market debt.

A deleveraging campaign had reduced Beijing’s debt mountain in 2018. But it has since returned to credit-driven stimulus to support growth and combat the effects of its
trade war with the United States.

About 80 per cent of China’s debt stock was accumulated over the past decade as the country strived to achieve the politically significant milestone of doubling its economic sizefrom 2010 to 2020. The milestone was a key goal in President Xi Jinping’s Chinese dream of “national rejuvenation”.

While the coronavirus threat has receded in China itself, any hope of an early recovery is forlorn as Covid-19 is still ripping through the major developed economies – essentially, China’s customers and trade partners. Plunging demand from abroad will create a second shock wave that will hit China’s export-oriented economy just as it is recovering from the first shock of having to lock down its cities.

China’s balance sheet will be hit by both dwindling revenue and a spiralling demand for spending. Rising corporate debt, surging local government borrowings, and soaring non-performing loans for commercial banks are three areas that could wreck its fragile financial and banking systems. The non-financial corporate debt-to-GDP ratio jumped from 93 per cent in 2009 to 153 per cent last year, one of the highest in the world. The Institute of International Finance warned that China was the major driver of global non-financial corporate debt. China’s bond defaults also hit records in 2018 and 2019.


Coronavirus could cause global food shortages by April as export curbs worsen supply chain problems


Meanwhile, China’s local government debts will jump as a result of more infrastructure-driven stimulus. This will add to a debt pile already worth up to 40 trillion yuan – about 40 per cent of the country’s 100-trillion-yuan GDP last year. S&P Global Ratings has singled out local government financing vehicles as being chiefly responsible for the accumulation of hidden debt. At issue is that while local governments want to spend more, their income from land sales, the main source of local fiscal revenue, is decreasing. The Ministry of Finance said revenue from land sales, which are off-budget, fell by 16.4 per cent in the first two months of the year.


China’s commercial banks also face a severe test as bad debts are likely to rise. Even before the outbreak, China’s banking system was a ticking time bomb, with the state having to step in to rescue a string of embattled medium-sized lenders. A Financial Stability Report released by the People’s Bank of China at the end of last year described 586 of the country’s almost 4,400 lenders as “high risk”. Data from the China Banking and Insurance Regulatory Commission shows there has been a steady rise in the non-performing loan balances of commercial banks since the middle of last year, a result of Beijing scaling back itsdeleveraging campaign.

China’s policymakers face a difficult choice: tolerate an unprecedented slowdown or go for massive stimulus and risk detonating a financial time bomb.

China’s economic planners have a habit of relying on massive levels of debt-financed stimulus whenever growth slows. The closed nature of its financial system affords policymakers the luxury of complacency, as they have a war chest of US$3.1 trillion in foreign exchange reserves.

All the signals suggest this is what they will do once more, despite the risk. Leaks suggest Beijing has amended its 2020 budget to raise the deficit to 3.5 per cent of GDP from an original cap of 3 per cent to fund this massive stimulus. Analysts say the actual fiscal deficits could jump much higher than last year’s 4.9 per cent, which included off-budget sheet borrowing and spending. Indeed, a meeting of the politburo, China’s top decision-making body, on March 27 suggested scaling up the stimulus package, with calls to raise the fiscal deficit ratio, increase issuance of Special Treasury bonds, and raise the quota of local government special bond issuance. Policymakers have also directed commercial banks to tolerate a higher threshold for bad loans, hoping to keep thousands of small and medium-sized enterprises from collapsing. The government has already sped up the issuance of bonds. The issuance of special-purpose bonds almost tripled to 950 billion yuan in the first two months of 2020, compared with last year.

It is to be expected that China’s debt will rise substantively in coming months, as in all previous crises. However, Beijing should beware that this time its fiscal measures will be limited. They will help only the country’s internal issue of supply and do nothing for external demand. China should exercise extreme caution: a financial virus can be as toxic, contagious and lethal as a biological one if it is allowed to spread. ■




Cary Huang is a veteran China affairs columnist, having written on this topic since the early 1990s. He joined the Post in 2004, and was based in Beijing between 2005 and 2013, first as a correspondent and then as bureau chief. He was previously China editor at The Standard from 1992 until 2004.

Coronavirus is paving the way for a return to military rule in Asia

Poor leadership, weak institutions and public mistrust have exposed the fragility of countries which have embraced democratic reform

As the going gets tough, some are falling back on militaries that still command extensive networks of power and influence

Asian Angle by Michael Vatikiotis Published: 4 Apr, 2020

Philippine President Rodrigo Duterte visits a military checkpoint during the coronavirus lockdown. Photo: Presidential Security Group

As governments in Southeast Asia struggle to contain the spread of Covid-19, poor leadership, weak institutions and high levels of public mistrust have exposed the fragility of countries that made a transition to more democratic government over the past two decades. The worry is that coping with Covid-19 will mean a return to authoritarian habits, backed by military power.

Two trends are discernible. The first is the tendency in those countries that have experienced either direct military rule, or periodic military intervention, to fall back on the military to lead or bolster management of the health crisis.

The second is that post-transition governments that allowed some measure of decentralisation but which retained extensive centralised power, are seeing an erosion of control as communities introduce their own preventive and protective measures. This may tempt governments to pull in the reins and roll back decentralisation.

Indonesian President Joko Widodo. Photo: Reuters

Indonesia illustrates both trends amply. President Joko “Jokowi” Widodo dithered and delayed a firm response to the spread of Covid-19, following advice he was given by his inner circle of the dangers of social unrest if restrictions on movement were too stringent. Initially, the president relied on cabinet members such as health minister Terawan Agus Putranto, who made a mess of messaging at a critical moment.

Then in mid-March, the president pivoted and appointed someone else to lead the government’s task force. Lieutenant General Doni Monardo was already head of the country’s national disaster agency. On March 13, the former special forces general was appointed chief of the Covid-19 task force. Since then, local media reports say, he has not left his office: a black couch is marked up with yellow tape to remind people to keep a safe distance when they visit him.

The two-star general has close ties to other members of the president’s inner circle, who have military backgrounds, observers say. The Jakarta military commander, Major General Eko Margiyono, was also appointed to lead the team in the capital, which has been badly hit by infections, killing more than a dozen doctors.

A joint police and military patrol enforces coronavirus measures in Indonesia. Photo: EPA

Even before re-election last year, Jokowi showed an inclination to rely on the military to make up for weak, often factional civilian bureaucracy, and also because many of the country’s problems are beyond his own experience and ability. Often this has made sense because the Indonesian military is a large, relatively cohesive organisation that can draw on an extensive network across the country because of a strategy of internal security that in the past ensured that soldiers were posted in every village. As The Jakarta Post commented in mid-March: “Having clung to power or revolved around it for most of the nation’s history, former military figures are able to tap into the ample resources of a well-established network of influence.”

The Indonesian military’s reach down to the local level may help protect the integrity of the central government. Many governors, mayors and local heads of communities have started imposing their own lockdowns to prevent the spread of the virus, challenging central authority. Asked about this recently, Doni Monardo said the deputies of provincial governors were the regional military commanders – implying a more effective and assertive chain of command.

How the coronavirus may change the geopolitics of Southeast Asia
23 Mar 2020


There is no question that even in countries where civilian primacy has been long established, governments have turned to the military to accelerate the implementation of Covid-19 countermeasures, although this has dredged up memories of military intervention at the political level.

In the Philippines, the lockdown of Manila and other areas of Luzon was quickly enforced by the military and police. Philippines army chief Lieutenant General Gilbert I. Gapay posted on social media that “as the country’s fight against Covid-19 is expected to impair some of our government services, the Philippine Army is projected to perform functions beyond its major roles”.

That’s all very well, but some reports from areas where the Armed Forces of the Philippines already operate in a counter-insurgency role say that overzealous commanders have operated checkpoints more stringently, which has become a source of tension.
Some have commented that the current situation is a de facto state of martial law, but the president’s office has stated multiple times that the quarantine is not, nor is it leading to, martial law. Still, people were not comforted when President Rodrigo Duterte later said he had “given a go signal” to the military and the police to shoot people violating the lockdown orders.

A soldier disinfects Silom Road as a coronavirus measure in Bangkok, Thailand. Photo: Xinhua

Thailand has experienced nothing but military rule since a coup in 2014. An election last year partially restored a parliamentary system of government, but the former army chief who launched the 2014 coup, General Prayuth Chan-ocha, has remained as prime minister. His handling of the Covid-19 crisis so far has been heavily criticised for being too little, too late.

Initially it seemed the experts would fill the policy vacuum as groups of doctors connected with civil society pressured the government to roll out measures to tackle the crisis. But as the number of cases went up and local administrators and strongmen in the provinces began to put their own restrictions in place, the army stepped in. Prayuth has now declared a state of emergency and a panel set up to oversee the crisis reportedly does not include medical experts and is mostly composed of senior military officers.

Members of the Myanmar Red Cross disinfect a street as a preventive measure against the coronavirus in Yangon. Photo: AFP

It’s the same in Myanmar, where the civilian-led government of Aung San Suu Kyi has been struggling to contain the powerful military since elections in 2015. When the government finally woke up to the threat of Covid-19 at the end of March, the response was to form an emergency task force comprised mostly of military and one civilian-led ministry – social welfare. This has mostly had the effect of stricter controls over media – with hundreds of websites shut down – and barring humanitarian access to conflict-wracked Rakhine State on the grounds that ongoing military operations are a priority.

In many countries around the world, fears of social unrest and the lack of trust in government authority are resulting in a resort to tougher law enforcement. But the integrity of political reform has always been weak and prone to setbacks in Southeast Asia, particularly in countries where the military has a long history of political intervention, such as Indonesia, Myanmar and Thailand. Notions of civilian primacy are weak, and, with a paucity of external threats, the army sees itself as the guardian of internal national security, especially in times of crisis. The aftermath of the Covid-19 crisis could therefore see a weakening of boundaries that had begun to strengthen between military and civilian power. 

Michael Vatikiotis is the author of Blood and Silk, Power and Conflict in Modern Southeast Asia