Will a vaccine really stop the coronavirus?

 Around the world, throughout this harrowing year, we’ve chanted a mantra: “This will all end once we have the vaccine.”  Well, it might not end right away. The infection rate depends not only on medical technology but also on behavior.  The announcement of an effective vaccine may cause people to believe that the virus is no longer a threat.  They will take off their masks and put on their party hats.  Such risky behavior may raise the infection rate again. For a while, we may be worse off with the vaccine than we were without it.

While we’re at it, let’s note two more ways that behavior affects the covid-19 disease:

Misinformation.  This summer, people interpreted the government’s rollback of lockdowns as meaning that the virus was no longer a problem, so they abandoned masks and social distancing. That might explain the abrupt surge in cases in the United States (and Kazakhstan?). But this problem might be temporary, because people benefit from correcting their mistakes.  And political leaders gain from providing the facts: In the US, the Democratic contender for President, Joseph Biden, is capitalizing on President Donald Trump’s deliberate understatement of the pandemic’s danger early this year.

External cost.  People are not penalized for transmitting the virus anonymously, so they will take too many risks. They will party without worrying that they might pass on the virus to somebody else, because it is not likely that the transmission will ever be traced back to them.  This is a permanent problem, because people don't have an incentive to resolve it. The government could address it by fining the maskless, but that's a political nonstarter.  However, although the problem won’t vanish tomorrow, it may not always be large.  People do consider how their actions affect their family and friends; the external costs are larger for crowded events, like block parties and (darn!) baseball games.

Let’s look on the bright side: Most epidemics do end after a vaccine appears.  But this time, it may take time.  – Leon Taylor, tayloralmaty@gmail.com

Why Uzbekistan doesn’t go against the grain

 

 

As a regional economy grows, complex production often migrates from the more developed areas of the region to less developed ones. Exhibit A: Central Asian agriculture.  For years, southern Kazakhstan exported flour to Uzbekistan, Tajikistan and especially Afghanistan; Kazakhstan has had hundreds of flour mills.  Now Uzbekistan imports less flour than before from Kazakhstan – and more wheat, which it mills into flour in Shimkent and sells to Afghanistan, elbowing Kazakhstan out of the global flour market.  In fact, by 2019, Uzbekistan had become the biggest importer of Kazakhstani wheat.

 

One reason that countries buy less flour from Kazakhstan these days is that they have imposed barriers on flour imports in order to build up their own mills. In Shimkent, for example, 70% of the flour mills were idle in 2019; so the Uzbek government sought ways to put them to work.  It taxed flour imports but not grain imports; Kazakhstani grain shipping through Uzbekistan was also taxed. True, the high cost of rail transport from Kazakhstan has also cut Kazakhstani exports.  In any case, flour mills in Kazakhstan were unprofitable last year, although planned quotas on wheat exports this year may lower wheat prices for mills in the country.    

 

Wheat exports from Kazakhstan have increased over the long term despite occasional bad weather.  For instance, recent drought withered the harvest in Kostanay Oblast’, pushing up wheat prices in 2019.  Nevertheless, wheat exports from Kazakhstan to Uzbekistan more than doubled from 2014 to 2018, to 2.3 million tons, reports a Kazakhstani business weekly, Kursiv. Over the same period, Kazakhstani exports of flour to Uzbekistan dropped by more than a fourth, to 658 thousand tons. This year Nur-Sultan limited grain and wheat exports to ensure cheap bread for Kazakhstanis during lockdowns.

 

Kazakhstan can offset part of the lost Afghan market by selling to China, but it will face a severe quota. Might the next step be retaliatory tariffs in Kazakhstan on imports from Uzbekistan?

--Leon Taylor tayloralmaty@gmail.com

 

 

Good reading

Laura Kopzhasarova.  Importery nastupaiut na pyatki.  Kursyv. September 12, 2019.  The main source for this post.

 

References

Yevgeny Gan. Mneniy. Kursyv. September 12, 2019. 

Interfax Kazakhstan. President of Kazakhstan’s Union of Grain Milling Companies Yevgeny Gan:

We need to find a new transport route for grain exports to Afghanistan.  September 2018.

Almaz Kumenov.  Kazakhstan introduces wheat, flour export quotas.  Eurasianet.org. March 3, 2020.

Miller Magazine.  Grain and flour market in Kazakhstan.  Undated.