Amid the coronavirus outbreak, Morocco's quick response was "timely and well-conceived", Brazilian economist Otaviano Canuto, Senior Fellow at the Policy Center for the New South, said in an interview with MAP.

Canuto, who is an expert in international macroeconomics, development economics, poverty reduction and international affairs, also commended the initiative of HM King Mohammed VI to support African countries in the fight against the pandemic.

The Royal initiative is a "praiseful effort" to support other African countries, he said, noting that the crisis is hitting hard particularly the poorer countries, where difficulties to flatten the epidemic and recession curves are even taller, and shocks from abroad have been intensive.

"The battle against the new coronavirus is a global one, and either we succeed globally or it will come back to haunt us all," he pointed out.

I consider Morocco’s quick response as timely and well-conceived, making it indeed a template for what other developing countries should implement, he said.

In Morocco, "damage has been limited and some control over the pandemic has been obtained", he said.

"It is worth emphasizing the complementarity of actions by public institutions, the private sector and civil society," said the former deputy minister for international affairs at Brazil's Ministry of Finance, adding that on the health level, priority was given to augmenting the supply of infrastructure available.

At the economic level, a special fund with resources corresponding to 3% of GDP was created in order to respond to both supply and demand shocks, he recalled.

By distributing aid to households in a precarious condition and by granting aid to vulnerable businesses, smoothing the landing of the economy and flattening the curve of the recession have become feasible, he went on, adding that looking for external financing was also swiftly pursued, as Morocco, like other developing countries, has also been impacted by shocks from abroad.

While foreign direct investments, revenues with tourism and remittances are falling, monetary policy has also helped, by facilitating access to finance in cases of businesses facing cash flow needs, he said, noting that targeted social assistance is a fundamental component of the policy package, facing the challenge of improving the identification of potential beneficiaries.

The global coronavirus crisis and the race for available ventilators and medical equipment have raised these sectors to a strategic status from any country perspective, Canuto stressed, noting that as one takes into account the high likelihood of similar health events in the future, it becomes clear how relevant it will be to count on domestic production in some of them, at least in some areas.

This may also be an opportunity to develop local capabilities of manufacturing more efficiently and at lower costs, he said.

The coronavirus crisis is primarily a public health issue, demanding containment policies that inevitably lead to shocks to economic activity, added the professor of economics at the University of São Paulo (USP) and the University of Campinas (UNICAMP).

A major reason for containment is the widespread perception that, given the dynamics of infection—and corresponding numbers of people in need of clinical care—local clinical care capacities risk being swamped, with higher death tolls, in a ‘do-nothing’ scenario.

Therefore, policies to flatten the pandemic curve and gain time become vital, regardless of whether they reduce the absolute number of infected cases at the end, he explained.

But the pandemic curve generates a recession curve that also needs to be flattened, he said, adding that the coronavirus pandemic has led to both negative demand and supply shocks to the economy.

"That’s where an extraordinary role of the state as a catastrophe insurer comes to the fore, providing fiscal support, including additional resources for healthcare systems, income transfers to crisis-affected people, tax relief, as well as credit available at favorable conditions to vulnerable firms," he said, adding that these emergency and temporary measures, with rising public debt as the form of finance, are geared to minimize the disruptive consequences of the temporary but deep sudden stop of the economy.