New Zealand’s delta COVID outbreak grows amid race to vaccinate

WELLINGTON — New Zealand prided itself on being a model for beating COVID-19 but is now grappling with a new delta-variant-fueled outbreak that has prompted a return to some of the world’s strictest lockdown rules, shuttering swaths of the economy.

By Friday, the number of community cases in the outbreak had risen to 347, up a record 70 from a day earlier — modest numbers by global standards, but alarming for New Zealand. Apart from 14 infections in the capital Wellington, all were in the largest city, Auckland.

Prime Minister Jacinda Ardern, who caught global attention last week when she reimposed the tightest level 4 restrictions over only a single case, and her aides are expressing confidence that New Zealand can stop the spread and limit the economic damage. But over a year and a half into the pandemic, Ardern may well face her biggest test yet, and officials are coming around to the notion that a new strategy will be needed sooner or later.

Until Aug. 17, New Zealand had not seen level 4 controls in place since April 2020. But on Friday, Ardern announced that Auckland was likely to remain under the full restrictions for two weeks beyond the previous deadline of next Tuesday. This means residents of the commercial capital will still be under stay-home orders, except for essential workers, while schools and most retail businesses will remain closed.

Areas south of Auckland are to move to the still-strict level 3 at midnight on Tuesday. This level provides more leeway for going to work or school if necessary, but non-essential businesses cannot have customers on site.

On Thursday, Ardern had told the media that the rules were “having an impact” but that “delta is very tricky.” On Friday, she said that although the latest numbers suggested a plateau, caution was still needed.

Apart from small outbreaks in Auckland in August last year and February this year, New Zealand had lived without COVID-19 in the community for over a year and the total death toll stands at just 26. Sports stadiums, restaurants and bars were full and everyday life was largely normal, except for border controls that stopped most people from leaving or entering the country.

A short-lived quarantine-free travel bubble with Australia was suspended in July as outbreaks took hold there, particularly in New South Wales, where more than 800 new cases have recently been recorded daily. Asked last week why New Zealand was imposing such strict lockdown measures when only one case had been confirmed at that time, Ardern pointed to Australia.

“We want to be short and sharp rather than light and long,” she said. “We’ve seen what happened in Sydney. We don’t want that experience here.”

There have been few signs of public opposition to the lockdown, aside from small and scattered protests in the largest cities, with participants numbering no more than about 50. Still, the government has been widely criticized for the slow rollout of vaccines, with only a little over 20% of the population of 5 million fully inoculated so far.

Judith Collins, leader of the opposition center-right National Party, blamed the lockdown on inaction by the government to quickly secure doses. “Their complacency and inability to ensure supply and delivery of the vaccine roll-out has left New Zealanders as sitting ducks; completely vulnerable to the delta variant when it inevitably got into the community,” Collins said.

Vaccinations have been ramped up since the end of July. As of Friday, the campaign has administered more than 3.1 million doses of the Pfizer vaccine, the only shot being used so far in New Zealand, including around 1.3 million in the last month alone. Just days before the latest crisis, the government outlined a gradual reopening of the border from early next year, by which time all New Zealanders apart from young children should have had the chance to be vaccinated.

No one knows for sure how long the outbreak will last, especially given the increased contagiousness of the delta strain. But University of Otago epidemiologist Michael Baker, who has been advising the government, is upbeat that the lockdown will work.

“I feel very confident that a level 4 lockdown will stop this virus,” Baker said. “We are very good at doing lockdowns in New Zealand.”

The economic toll is also uncertain, however. Finance Minister Grant Robertson said that nationwide level 4 lockdowns cost the economy about 1.5 billion New Zealand dollars ($1 billion) a week, but that the government was in a strong position to help affected businesses and workers.

New Zealand had rebounded from the recession caused by the pandemic last year, recording quarterly gross domestic product growth of 1.6% in the three months to this March and 2.4% year on year. Unemployment fell to 4% in the June quarter, down from a pandemic high of 5.3% in the September quarter last year.

“The great news is that the New Zealand economy has outperformed all of the expectations,” Robertson said. “We’re in a much stronger position than we expected to be, so New Zealand has the capacity to deal with this.”

The central bank, the Reserve Bank of New Zealand, had been expected to raise its key interest rate, the official cash rate, from a record low 0.25% last week because of the economic rebound. However, the announcement of the lockdown prompted it to sit tight, while indicating rises were still on the horizon.

The outlook for interest rates and the economy is dependent on how long the COVID-19 infections and lockdown last. If the situation can be brought under control within weeks, the economy is expected to quickly recover, economists said.

The streets of Auckland, the epicenter of New Zealand’s outbreak, are largely empty on Aug. 26 amid a strict lockdown.   © Reuters

“We’re currently assuming a successful health response, that pent-up demand dynamics are similar to previous lockdowns, that fiscal stimulus works just as well as before, and that any deterioration in economic confidence is short-lived,” ANZ Bank chief economist Sharon Zollner said. Still, she added risks were skewed to the downside.

Among the risks for New Zealand, which relies heavily on exports of agricultural products and tourism, are continuing turbulence in world trade and travel, and the uncertainties around effectively tackling COVID-19’s delta variant.

COVID-19 Response Minister Chris Hipkins says delta raises questions about the government’s future pandemic strategy as well. New Zealand would not be able to keep relying on lockdowns to keep the pandemic at bay.

“We really need to drive up our vaccination rates and we’re really focused on doing that … and preparing for a different kind of future,” Hipkins said over the weekend. “But at the moment we don’t know what that will look like.”


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