Every year, visitors arrive in Italy in droves to enjoy its sun and fun, good food and music, its rich cultural heritage and amazing landscape. The country is vibrant and is never dull. Visitors spend huge sums of money and get good value for what they spend. They come to enjoy what Italy has to offer.
Covid-19 has put a sudden halt to all these. The country has never seen anything like it since the Spanish flu of 1918-1920, when 50 million people died and another 500 million got infected. Third only to the USA and Spain in terms of confirmed coronavirus cases, Italy in seven-plus weeks has seen over 130,000 of its citizens getting infected, and over 17,000 dead. The recovery rate in Italy has been lower than other countries and the mortality rate has been higher. The country, which once proudly claimed to have one of the best public health services in the world, is on its knees.
Why is that so for Italy, a rich industrial country with a good universal health service and social security? What went wrong? What are the chances of its quick recovery, and what impact is Covid-19 expected to have on this placid, playful, enjoyable country?
Covid-19 virus, imported from abroad
The spread of Covid-19 in China towards the beginning of winter of 2019 did not ring much of an alarm bell in Italy. There was a general feeling that whatever that was happening in far-off Wuhan would be controlled by China.
Italians overlooked one thing: late winter was the beginning of the tourist season, which was expected to bring a large number of tourists to Italy. The economic prosperity of China was enabling their people to explore countries far away from their borders. Italy was one of their favourite destinations. In 2019, Chinese visitors spent over 650 million euros in Italy, up by 40.8 percent year-on-year. Although this was still a small percentage of their global spending, the growth had been amazing. Milan, the fashion capital of the world, attracted fashion lovers, and the nuovi ricchi (new rich) Chinese were flocking there in larger numbers. The lakes and mountains, Venice and Verona, attracted the tourists more than other parts of Italy.
And the industries in the North were also attracting many Chinese business people. Some were not only spending money but were also carrying virus from their southwest Wuhan region. The densely populated region of Lombardy, with a significant presence of industrial workers, provided the right backdrop for the quick spread of the virus.
And the unwary Italians helped spread the virus
The Italians, looking forward to the spring and the Easter vacation, were unaware of what was happening. Their social cohesion, close proximity in social dealings and gatherings, emotional attachment requiring hugs and kisses created the right "environment" for the quick spread of the virus.
With highest elderly dependency ratio, Italy was very vulnerable
Covid-19 affected the elderly (70+ years) much more than the younger population. Italy has one of the highest ratio of elderly in the world. Its elderly dependency ratio of 23 percent is second only to Japan (28 percent). Good life style gives Italians high longevity of about 84 years (86 for females and 82 for males). But with age, body functions decline, organs start failing and the elderly people become deadly targets for Covid-19.
Italians may have had poor immunity to disease
But it is not the elderly factor only. Italians probably have much less immunity compared to others, especially compared to the people from the developing countries. Their liking for fresh meat and fish, vegetables and fruits, olive oil, and their general rejection of frozen and unhealthy fast food have given them an enviable food culture. They do have fast food, but these are fresh food like pasta, pizza, panino, tramezzino (sandwiches) and salads. Most bars serve hot food at lunch time, with a liberal choice of fish, fruits and vegetables.
The combination of healthy and tasty food, high sanitary standards, and the general hygienic conditions have a downside: low tolerance to impurity. Purity prepares their body to accept the best only, and even a slight deviation is not accepted. Even a mild form of Covid-19 can become a lethal virus for them.
Whose fault is this? Nobody's. Italy paid the price for its Mediterranean climate, high elderly dependency ratio, good food and good health standards. It is sad, but this is the reality.
Can Italy roll back the spread of Covid-19 soon?
Responding to the quick spread of Covid-19 in the North, the government has imposed lockdown measures with strict restrictions on movements, between regions and gradually between municipalities. Hefty fines of a maximum 4,000 euros were imposed on violators, and nearly 100,000 cases of penalty were recorded. The fear of Covid-19, the financial setback if caught by the police, or both, made Italians adhere to the guidelines of social distancing rather strictly.
At the same time, the large and well-reputed Italian health service system sprang into action, though a bit late. They were hugely overstretched, without adequate supplies of PPE. The doctors and nurses were exposed to the virus infection. This resulted in their high rate of casualties (more than 60 doctors died in Italy as of March 30, 2020). But they fought bravely. The EU failed to extend support to its member nations but support, though late, came from Germany, and later from China, Cuba, Russia, Germany, and from the USA (financial support of USD 100 million).
There is a cautious optimism in Italy that they may have turned the corner and it is on its way to recovery. However, the data are still oscillating, and the virus still has a firm grip on Lombardy and piedmont regions of the country. The much-anticipated drift to the poor South has not materialised, although it cannot be ruled out yet. The government is optimistic; there are even talks of a much-improved situation before the Easter (Pasqua) and opening of schools in May. New infection rates have gone down, though very slightly, and lately, the daily death rate seems to be going down. But the overall scale of the Covid-19 infection, the critically ill, and death remain huge.
As of April 8, the total confirmed cases in Italy stand at 135,586 and total deaths at 17,127. The rate of mortality in Italy is much higher than the global mortality rate. The higher death rate is the reflection of the higher proportion of elderly patients and low initial preparedness of the country.
The decline in new infections is expected to ease the pressure on the overstretched health care providers. It will allow them to focus on their own health and at the same time on the Covid-19 patients, leading to a better rate of recovery, and decline in the rate of increase of the critically ill. While the death rate will probably continue for some more time, the decline in the patient intake will gradually choke it.
How quickly can the spread of the infection be rolled back?
So far, Italy has been able to contain the spread of the virus in its places of contagion (i.e. the North) and the infection rate has declined slightly in recent days. The government has been able to stop the southward drift of the virus, but still the danger lurks.
Recovering from this dire situation is not just about containing the virus now, but also ensuring that it does not recur, like the Spanish flu which relapsed three times. Research and containment measures have to keep pace with the growing challenge of keeping track of the virus in all its mutated forms. Hopefully, new vaccines under test will be a game changer in this scenario.
What are the economic and social impacts of Covid-19 for Italy?
With a deepening of the crisis, a severe recession for the global economy has been forecasted by many. Italy will have its share—the tourist industry (which contributes 13 percent of Italy's GDP), and SMEs are likely to be hit hard. The small operators will not have the capacity to restart their broken and bankrupt businesses, unless they are rescued by appropriate financial support. Million of workers will be affected. The agricultural South will also be hit, but maybe much less intensely as their working capital requirements for starting a new agricultural cycle would be smaller compared to that for small and medium industries. The "hidden" economy of Italy, the family-run businesses, the arts and craft industries, can provide the much-needed support to the recovery of the rural economy.
The ethnic Italians, with their usual social bondage, fall back support in terms of rural properties, local communities, and relatives, will be better placed to recover than the migrant workers.
The government has already announced that all workers who have INPS would be paid a subsistence allowance of 600 euros per month during the lockdown period; the unemployed will be given food and 100 euros a month. These programmes will stretch the fiscal capacity of the country, and national debt will increase significantly. The announcement by the president of the European Union about a support fund of 800 million euros for worst-affected countries, as well as a solidarity fund for recovery, are right initiatives under the present circumstances.
Apart from the lowering of living standards of the poor, Covid-19 will also leave some social scars. Italy will be looking for 200,000 additional agricultural workers. The generally tolerant and welcoming Italians may also drift to the right, and take their frustration on the migrant workers. There could also be a political shift of countries to the right, unless government policies can restore their jobs and income early.
The Covid-19 crisis will also impact Italy's elderly population. The economic downturn, price increase, lowering of the value of stocks and assets may impose a severe downward pressure on the welfare of the elderly people. It will increase their isolation and their sense of insecurity. The care service provided to them through the traditional family institutions will continue, but a large number of them who would need such services may find it difficult to get them, both because of the shortage of such services as well as their own resource constraints.
And lastly, the Covid-19 fallout can be expected to have a serious impact on the unity of the European Union. A number of questions will be debated intensely: what value did EU add when the countries were on their knees? Much anger is expected to be ventilated. But then, it can also lead to a new resolve to give the EU project a new life, to work together to defeat something which no country working alone can defeat—pandemics like Covid-19 and climate change.
Atiqur Rahman is a former Lead Strategist at IFAD.