Building Resilience: How Switzerland and the United States Are Responding to the Coronavirus Pandemic

The coronavirus caught every country and government off guard. But policymakers, health experts, businesses, and the public have begun to adapt, and there are already lessons to be gleaned from the experience that can inform the ongoing response to the coronavirus, and to future pandemics. This article is based on five ASF CONNECT talks from the spring 2020 series.

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by Karina Rollins

Government Responses, Diplomacy, and Trade  

For U.S. Ambassador to Switzerland Edward McMullen (YL 1995), the most compelling aspect of government responses to the novel coronavirus (COVID-19) “is how well democracies are able to respond to crises.” Democracies share information, they are transparent, and they include an entrepreneurial aspect and a humanitarian focus, he explains during the first ASF CONNECT conference call in April 2020.

In responding to COVID-19, both Switzerland and the United States have had bold leadership, says Ambassador McMullen, and both countries have strong economic foundations that will allow them to weather the economic downturn that resulted from the coronavirus lockdown measures. For these reasons, he believes that a V-shaped recovery is possible in both countries once all restrictions are lifted.

Government Aid. In the meantime, the large-scale aid packages passed by both governments are crucial. As Markus Diethelm, chairman of ASF’s Swiss Advisory Council, described Switzerland’s aid package, which is true in the U.S. as well, government aid is intended “to create a buffer to counter the government-directed recession and to avoid a wave of bankruptcies.” Diethelm also points out that innovation and flexibility will play an important part in economic recovery.

Any recovery must also be fine-tuned to the needs of the people, says Ambassador McMullen, so there are essentially two main priorities for recovery: (1) keeping people safe, and (2) keeping a strong focus on the economy.

From the Coronavirus Aid, Recovery and Economic Security (CARES) Act, which includes the Paycheck Protection Program (PPP) for small and medium-sized businesses, to the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which included direct cash payments to Americans, the U.S. relief packages are, indeed, aimed at protecting the public’s health to preventing economic collapse. The same is true for Switzerland.

Economics. Economic relief comes in different forms—not all must be monetary. President Donald Trump, says Diethelm, “has done remarkable things to reduce regulation” even before the pandemic, which includes enforcement of contractual rights. Specifically related to the pandemic, President Trump signed an executive order for “Regulatory Relief to Support Economic Recovery” on May 19.

Ambassador McMullen states that foreign direct investment (FDI) in the United States must continue in order for the economy to recover fully. Most U.S. embassies around the world remained operational (mostly through teleworking), including the one in Bern, continuing to offer support to Swiss business people, and offering advice on how to “move” between Switzerland and the United States under lockdowns and flight restrictions.

The ambassador also believes that the “realignment of supply chains all over the world” due to widespread recognition of the problems associated with relying on Chinese supply chains “will create an opportunity for the United States and Switzerland”—the two most innovative countries in the world—to deepen their strong relationship even further.

Shared Values. Swiss Ambassador to the United States Jacques Pitteloud says that “the U.S.-Swiss relationship has been at its highest levels over the past several years.” In a conversation with ASF chairman Robert Giuffra (YL 1996) in early May, he stresses the shared values of the two stable, open, and free-market democracies, stating that the U.S. and Switzerland “are not allies (because Switzerland is neutral), but friends—which is even better.” He points out that “interpersonal relationships are crucial” for the “two highly intertwined nations.” (ASF has been fostering these interpersonal relationships through its annual Young Leaders Conference since 1990.)

The United States is already Switzerland’s no. 2 trading partner, and, due to ever-increasing trade in goods and services, is set to become Switzerland’s top trading partner (overtaking Germany). Ambassador Pitteloud echoes Ambassador McMullen’s point about realignment of global supply chains, when he talks about the “re-centering” of Western countries “on supplies they know they can trust.” These developments would likely strengthen the U.S.-Swiss economic relationship even further, long term, with “new mechanisms” and a “new balance.”

Ambassador Pitteloud also hopes that the pandemic will lead to a revival of research and increased cooperation with countries that up to now, have “paid lip service” to free trade, but have yet to engage significantly with the rest of the world.

The U.S. Export-Import Bank. President and chairman of the board Kimberly Reed (YL 2001) describes the Exim Bank as “an important part of our country’s trade toolbox” in a talk in early June. Exim is the key U.S. agency that assists American companies, especially small and medium-sized businesses, with financing and facilitating exports to other countries. Exim’s mission is to support U.S. jobs through exports. Like other banks and businesses, Exim has kept up its work through staffers working from home and using video conferences to conduct meetings. Reed says that Exim was one of the first banks to offer pandemic relief measures to its clients, which Exim has extended until August 31.

There is a Swiss counterpart to Exim—Swiss Export Risk Insurance (SERV), which also introduced coronavirus support measures.

Science, Medicines, and Partnerships

Pharmaceutical companies have been racing to develop tests, treatments, a cure, and a vaccine for COVID-19. Swiss pharma giant Roche has been at the forefront of the efforts to develop tests for the virus. Roche chairman Dr. Christoph Franz says in a talk in mid-May that Roche is now focusing on developing “specific, high-quality, antibody tests,” which show whether a person has had the coronavirus in the past.

Roche has so far never been involved in making vaccines, but, like those who are, Franz recognizes that a vaccine most likely will not be available in 2020. As for treatments and cures, developing completely new medicines from scratch will take several years of development.

What makes an antibody test (as opposed to tests that detect the presence of the virus) so important, is that many people have been known to be asymptomatic carriers, which means that many people had, have, and will have the virus without even realizing it. Widespread antibody testing would allow knowledge of which regions and cities may already have built up a level of so-called herd immunity. Of course, what is still unknown, is how long this immunity will last, as that is different for every virus. Franz says that, “we will soon know more about the connection between antibodies and immunity.” 

Return to Normal. A complete “return to normal”—meaning a life without any of the ongoing restrictive containment measures—depends on a vaccine, says Franz. Even if not all people get vaccinated, once a vaccine is available to those who do want it, life can “substantially” return to the way it was. There will probably be lingering effects, such as reduced travel and more video conferencing. Franz sees a continuing development of the U.S.-Swiss economic relationship, as countries that are already trusted partners will tend to focus even more on that trust in uncertain times. And, trust is especially important when dealing with products on which people’s lives depend—such as pharmaceuticals and diagnostics. Many medicines and test kits, for example, are made of components from multiple countries, and supply-chain security is of the utmost importance.

As for those individual components, manufacturers of the end product “will not rely on one supplier exclusively,” says Franz. Many countries’ dependence on generic drugs, enormous quantities of which are made in China, has “become a sensitive issue” says Franz, and in the future, policymakers “should remind [them]selves of what has helped in this crisis”—“reliance on stable and proven partners, and acting in the spirit of strategic partnership.”

Public-Private, U.S.-Swiss Partnership. Massachusetts biotechnology company Moderna, the U.S. National Institutes of Health, and Swiss drugmaker Lonza are collaborating on a COVID-19 vaccine—which passed the Phase 1 trial in mid-July with promising results, inducing an immune response, with mild side effects, in every participant. While more research is needed, this is the first U.S. vaccine candidate for COVID-19 to be included in a peer-reviewed medical journal.

Airline Industry and Air Travel

Airlines have been one of the hardest-hit industries during the pandemic. At the peak of lockdowns and travel restrictions, Germany’s Lufthansa, for instance, was losing 1 billion euros every hour, Markus Binkert (YL 2006), CFO of Swiss International Air Lines (SWISS), points out in a talk in late May. SWISS, which is part of the Lufthansa Group, never shut down completely, operating instead on a minimal schedule, such as reducing its four or five daily flights from Switzerland to New York to three flights a week. SWISS has been losing several million dollars per day.

To survive, SWISS, like airlines in the United States and European Union, needs government support, which it has received. That government support does not, however, take the form of state ownership (direct investment), as is the case with Lufthansa, for example. In return for a €10 billion bailout, the airline will give the German government a 25.1 percent ownership stake. U.S. airlines received a $25 billion bailout from the government, with future ownership stakes a possibility. The Swiss government agreed on a nearly $2 billion aid package for the aviation industry, which includes SWISS, Edelweiss Air, and companies that provide services to the industry.

Currently, every country, state, and airline has its own regulations on how to contain the spread of COVID-19, something that Binkert says will have to be addressed.  

Binkert hopes that SWISS will be back at 50 percent capacity by September. This would be the first phase of returning to regular passenger travel. 2021 will be key in finding the right balance between ramping up capacity and cost efficiency.

The Passengers. While ticket prices will be lower in the short term as airlines try to fill seats, over the medium term and long term, says Binkert, flying will become more expensive, as it did after 9/11. Binkert says that airlines might also ask themselves whether they need to offer first-class sections in the future, possibly expanding business class and economy class instead. Logistics will have to change, such as serving only pre-packaged food to avoid contamination, and doing away with the in-flight magazine, an obvious germ concentrator. Many of the new measures to keep passengers from getting sick during travel will take place behind the scenes, such as the cleaning of armrests and seatbelts, says Binkert.

Hopeful Outlook

As Markus Diethelm has said: Crises bring out the true character of people and the true leaders of countries. A crisis is also a test of resilience and technology, says Diethelm.

Both the Swiss and American publics have put their lives on hold—foregoing vacations and business trips; canceling major conferences and cultural events; closing schools, stores, restaurants and bars, museums, movie houses, and theaters; wearing masks for essential errands; being sure to keep that “social distance” from the people around them, even staying completely away from loved ones in nursing homes; and generally accepting restrictions on their lives that few would have believed possible in February. For the most part, the Swiss and Americans have indeed been resilient.

As for the technology—the pandemic is a glaring reminder that, despite the truly amazing advances in life-saving, diagnostic, and therapeutic medical technology, something that is invisible to the naked eye, such as a virus, can still bring the world to its knees.

At this very moment, scientists and researchers the world over—not least in Switzerland and the United States—are working on developing treatments, cures, and vaccines. Since this is 2020, not 1918, the world has real reason to hope that the end to COVID-19 may soon be in sight.  

The end of mask-wearing, physical distancing, and video meetings cannot come soon enough—as Ambassador McMullen and so many others recognize about life: “Nothing replaces human contact.” And, as Christoph Franz reminds everyone: “Don’t forget that one day the crisis will be over.”

 

Listen to the first five ASF CONNECT talks, from the spring 2020 series, here:

Ambassador Ed McMullen

Ambassador Jacques Pitteloud

Dr. Christoph Franz

Markus Binkert

Kimberly Reed

 

Additional reading:

Ashley Nunes, “How COVID-19 Will Change Air Travel as We Know It,” BBC.com, July 9, 2020.

Clare O’Dea, “What Switzerland Did Right in the Battle Against Coronavirus,” MarketWatch, June 15, 2020.

Chris Isidore, “Airlines Say Massive Job Cuts Are Inevitable After Bailout Money Dries Up,” CNN Business, May 10, 2020.

John Chambers, “Coronavirus Should Inspire Businesses to Prepare Their Supply Chains for the Future,” Fortune, April 12, 2020.

Philip A. Wallach and Justus Myers, “The Federal Government’s Coronavirus Response—Public Health Timeline,” Brookings Institution, March 31, 2020.