Public Sector Practice

How to restart
national economies
during the
coronavirus crisis
By recognizing differences among regions and sectors, governments
can get people back to work faster and safeguard our livelihoods.
by Andres Cadena, Felipe Child, Matt Craven, Fernando Ferrari, David Fine,
Juan Franco, and Matthew Wilson
April 2020
© Bet_Noire/Getty Images
 Around the world, life as we know it has changed
drastically. Global leaders and millions of citizens
are facing the challenge of a lifetime. The COVID-19
pandemic is threatening not only healthcare
systems, but also the livelihoods of citizens and the
stability
of economies.
As our colleagues wrote in “Safeguarding our
lives and our livelihoods,” the shock to our lives
and livelihoods from the virus-suppression efforts
could
be the biggest of the past 100 years.1 If we do not
stop the virus, many people will die. If attempts
to stop the pandemic cause severe damage to
social and economic networks, people will
experience large-scale suffering in the medium
and long term. The world must act on both of
these fronts— suppressing the virus and
mitigating the negative
impact on citizens’ livelihoods—at the same time.
The progress we make on those fronts will
determine the shape of the economic recovery
(Exhibit 1).

1
Kevin Buehler, Arvind
Govindarajan, Ezra Greenberg,
Martin Hirt, Susan Lund, and Sven
Smit, “Safeguarding our lives and
our livelihoods: The imperative of
our time,” March 2020,
McKinsey.com.

Exhibit 1

The economic impact of the

COVID-19 crisis encompasses a
range of scenarios.
Scenarios for GDP impact of COVID-19 spread,
public-health response, and economic policies
A More
scenarios
likely sce

B nse i succeeds but

e v measures are not
Effectivenes e suficient to prevent
tt Rapid
e s of the and recurrence so
r public- effectiv r physical distancing
health e e continues (regionally)
response control s for several months
of virus p
spread o
Strong n
public- s Broad failure of
health e public-health
respons , interventions
e b Public-health
succeed u response fails to
s in t
Vir v
control the spread of
us controlli the virus for an
i
spr ng extended period of
r
ea spread time (eg, until
u
d in each vaccines are
s
an country available)
d within
pu 2–3 r
bli months e
c- c
he u
alt r
h Ef s
res fe Public-
po ct health
response
How to restart national economies during the coronavirus
2 crisis
 Viru r l se s
s n a s
Virus V
cont y partially
contai i Ineffect
offset
s
aine ned; r t e t
d d econom
slow u o interven r
but ic
recove s u
sect damage
ry t b Se c
or ;
c r u lf- banking t
dam t u
o e rei crisis is
age; r
n n nf avoided
low a
t d f or ;
er l
a u ci recover
long
i l ng y levels
- Virus g
ter n l A3 re muted d
recurrence; r ce
e a
ssi B5
m slow long- o
tren d w e m
term growth, on
d ; t c a
muted world dy E
gro h o g
wth
recovery na f e
s , n mi f ;
t s o cs e
r t m kic c
GDP o r i r
t
n o c e
in; i
g n c
Time Pandemic
A1
wi v
o
escalation; g B1 r de e
slow g e sp v
Vi progression w re e
r c i r
ru toward o o o ad n
s economic r ba y
w v t
re recovery t l e nk e
cu h d r ru r t
rr y pt v o
en r cie e
r
ce e n
e p
; b an t
b r
sl o i
o e
o u cr o
u -
w n ed n
n c
lo d s
d r
ng de S i
- fa t s
te ult
A2 r i
r s; o s
m po n
gr P te g
o nti f
V a A4
w al u
i n
th ba p n
r d
nk o d
u e
in l a
s m i m
i
cri c e
r c
sis y n
e t
c e a
Pande B2 r
u s l
mic e
r c Par s s
escala
r a tiall p
tion; l
e o
prolon a
ged
n a effe n n
downt
c t ctiv s d
e i
urn e
; o int
withou n m
t erv p
; o
econo r ent r m
mic e ion e e
recove t d v n
ry u e Poli e t
n u
res t
m
pon
Wo rs e

How to restart national economies during the coronavirus

crisis
3
 Worse r. In livel
Knock-on effects and Better
economic policy Latin iho
response Americ ods
Effectiveness of a, .
government economic
some Ma
policy
countri ny
So far, most w
es cou
governments, i
reacte ntri
businesses, d
d es
and citizens e
quickly hav
have rightly s
and e
focused on p
ordere res
saving lives. r
d pon
We have e
weeks ded
seen a range a
of wit
of responses, d
comple h
from drastic r
te unp
(the e
lockdo rec
complete s
wn ede
lockdown of t
while nte
the Wuhan r
case d
region in i
numbe lev
China) to c
rs were els
more gradual ti
still of
(restrictions o
relativ bot
on public n
ely h
gatherings s
low, fisc
and the o
with al
promotion of n
the and
physical p
goal of mo
distancing in u
flatteni net
some b
ng the ary
European li
curve sti
countries and c
and mul
North m
reduci us
America). o
ng the to
Other v
speed blu
countries e
of nt
such m
transm the
as South e
ission. eco
Korea have n
no
followed a t
Countri mic
third path. ,
es are imp
Based on a
also act
massive t
coming of
testing and l
to the
contact e
grips crisi
tracing, this a
with s.
approach has s
the For
allowed them t
second exa
to control the s
impera mpl
spread of the o
tive: e,
virus without f
saving the
imposing a
How to restart national economies during the coronavirus
4 crisis
United States d pe Wh
recently e ra at
passed a $2 b tiv syst
trillion t e ems
stimulus . — nee
package. S sa d to
o vin be
Yet m g in
tremendo e liv plac
h
us eli e to
a
uncertain ho rest
v
ty e od art
remains a s— safe
about ll is ly?
what to t jus
do next, h t In
on both r as this
fronts. e pe arti
e rpl
Most cle,
.
national exi we
H
health o ng. pro
systems, w Sh pos
particularly in oul e
some s d two
emerging h all fra
markets, are o ec me
insufficiently u on wor
prepared for l o ks
d
the task at mi for
t
hand. c rest
h
Countries e se arti
thus face y cto ng
daunting p rs an
questions: r receiv eco
Should the o e the no
quarantine c same my.
continue? If e treat The
e
so, for how ment? first
d
long? Should How is
?
it be a blanket do we desi
quarantine for restar gne
T
all regions and t the d to
h
age groups? econo hel
e
Many my in p
countries some gov
s
have large, geogr ern
e
informal aphies me
c
economies, witho nts,
o
crowded ut the
n
living resurg priv
d
conditions, or ence ate
high levels of of the sect
i
household virus? or,
m
How to restart national economies during the coronavirus
crisis
5
 and flattening the curve. should expect that restarting time
nonprofits Given what’s at stake, it’s economic activity will only
think through not too soon to begin lead to more transmission. Case — Systems for
when to thinking about what it numbers and, more importantly, effectively
open their will take to restart the hospitalizations need to be low identifying and
economies, economy. In the words of enough for a health system to isolating cases and
and the perhaps the greatest manage individually rather than contacts, including
second wartime leader in history, through mass measures. digital tools for
outlines an “This is not the end. It is real- time sharing
approach for not even the beginning of A second factor in thinking of critical data
how to do the end. But it is, about this is the strength of the (however,
so. perhaps, the end of the systems in place for detecting, different systems
beginning.” Governments managing, and preventing new will be
Many worldwide should cases. Elements of these appropriate for
countries are recognize the hard work systems include the following: different countries
still in the still to come and and contexts)
depths of adequately prepare for — Adequate medical capacity,
crisis, with the next phases of the especially of intensive care — Adequate medical
hundreds of crisis. units (ICUs), for those with resources,
deaths every severe disease including trained
day. But doctors, beds,
others seem — Ability to perform a and personal
Prioritizing both
to be diagnostic test for COVID- protective
lives and
19 with a fast turnaround equipment
livelihoods:
When to release — Public sy
constraints? educa st
tion e
The threat of COVID-19 to
infor m
lives and livelihoods will
med s.
fully resolve only when
by If
enough people are
the we
immune to the disease to
best com
blunt transmission, either
scien bine
from a vaccine or direct
tific a
exposure. Until then,
evide syst
governments that want
nce em’
to restart their
availa s
economies must have
ble level
public-health systems
of
that are strong enough
These stre
to detect and respond to
eleme ngth
cases. Leaders should
nts with
recognize that regions may
can be an
differ significantly in their
combi asse
readiness to restart their
ned to ssm
economies.
provid ent
e a of
The first and most obvious
measu the
factor in determining
re of inte
readiness is the number of
streng nsit
new cases in a given area.
th for y of
Regions with significant
public- viru
ongoing transmission
health s
How to restart national economies during the coronavirus
6 crisis
 transmission, Re
Response leaders ad
we can Low
can plot in
evaluate any subnational regions es
region’s s
(states, counties, to
readiness to cities, hospital- re
restart activity influenced zones,
st
ar
(Exhibit 2). and so on) on this t
These two matrix to evaluate ec
dimensions o
when each can n
determine four restart some o
stages of measure of m
readiness to re- y:
economic
open the activity. Regions with S
economy, with t
strong public-health a
Stage 4 the systems and few or g
least ready and e
no cases, where 1
Stage 1 the tracking and S
most. One isolation of t
broad a
transmission chains g
observation on are still feasible, e
2
countries’ might behave
S
varying stages differently than t
of readiness: regions with weaker a
g
many emerging public-health e
markets are systems that are 3
especially further along on the S
t
concerned with epidemic curve. In a
the question of many emerging- g
e
how to add ICU market countries, 4
capacity. including several in
Latin America, many
elements are
important but the
main obstacle is ICU
capacity. Achieving
the necessary
capacity requires
highly coordinated
efforts and a
detailed
management
system.

Exhibit 2

The local response matrix can

help governments understand
the COVID-19 outbreak in
regions more precisely.

How to restart national economies during the coronavirus

crisis
7
 th the
system mat
Low system readiness and low
Medium
virus spread
system readiness and low
Highvirus
system
spread
s
readiness and low virus spread
rix
strengt eve
hen. ry
day
V
i
Th ,
e usi
m ng
at real
Medium system readiness and medium
High system
virusreadiness
spread rix
and medium virus spread -
Low system readiness and medium virus spread
do tim
es e
no dat
t a. A
o rob
r ffe ust
u r ma
s Medium system readiness and high
Highvirus
system
spread
readiness and high virus spread
Low system readiness and high virus spread ab nag
s so em
p lu ent
r
te -
e
a gu info
d id rma
High eli tion
ne syst
Lo s em
w H
i bu can
g t hel
P h
u m p
bl ay cou
ic
- be ntri
h a es
e use
us
al
th ef thei
system ul r
Positions r to ow
on the i ol n
matrix will g to dat
not be h ai a to
static; t d tail
regions will a de or
move s cis thei
upward as p io r
case u n res
numbers b m pon
fall and li ak se
better c in to
control - g. loca
mechanisms h Govern l
are e ments real
established, a can itie
and to the l update s.

How to restart national economies during the coronavirus

8 crisis
In time, other scientific breakthroughs
could also transform this dynamic— Exhibit 3 C to D
• The city
an effective vaccine, an accurate Bthe path
illustrates C would
reach its
D
antibody test, significant new that a large city, next
treatments for COVID-19—assuming region, or other normal,
wherein
they are available at scale and geography might its V
healthcar i
deployed widely. This article does not take toward e capacity r
factor in this impact. economic has u
expanded s
readiness. suficiently
, the virus
spread is s
moderate, p
and the city r
Exhibit 3 deploys e
Stage 1 a
Governments must slow the spread of the virus measures d

before opening up parts of the economy.

An illustration of how a city might move through four stages

Rea
din
A
Low
ess
to
rest
art
eco
no
my: High

S
Low
t High
a
g Public-
e health
system
1
Countries avail
S
t may also able
a have to to
g
e choose som
adequate e
2 metrics to coun
S measure tries.
t
a virus Alter
g spread. nativ
e
The e
3 optimal metr
S metric ics
t would be migh
a
g the rate t
e of inclu
transmissi de
4
on, but the
this case
Journey to the placing the city in a position to start reopening its
economy through Stage 3 measures demands grow
next normal
a large th
A to B B to C
• Mandatory testing rate
lockdown • As the economy reopens, the capacity of the healthcare
measures in system is significantly expanded, thus allowing a move to capacity and
Stage 2
Stage 4 slow
measures that may the
the virus
spread, • City may return to Stage 3 or 4 if virus spread soars not be cum
after reopening
How to restart national economies during the coronavirus
crisis
9
 ulative total of Low
transmission slows. Hig
cases. h
Other regions do not Public
need to undergo the -
Exhibit 4 health
same restrictions and
shows how system
could potentially
one country In ma
resume some of their
might look on summa trix
economic activity.
the matrix. In ry, allo
When coupled with an
this example, regions ws
understanding of each
many regions can be
region’s relative
need to catego
economic importance,
maintain rized
as we describe below,
strong into
this information
measures until four
enables leaders to
the speed of stages
quickly identify places
the of
where more jobs are at
stake—which in readin
turn may help ess to
leaders prioritize reopen
efforts on building parts
healthcare capacity. of the
econo
my
Exhibit 4 (Exhibi
t 5).
O@cials must track the public-health response by For
region. each
Region 15 stage,
An illustrative snapshot of one country’s regions, three weeks into the crisis
leaders
Readiness can
to restart Low define
economy:
the
Stage 1 level of
V
Stage 2
i Region 5 intensi
Stage 3 r ty of
u
Stage 4
s
actions
Region 1 Region 7 to be
Economi
s taken,
c
relevanc
p allowin
e, r Region 17
e g them
region
a to
d
Region 11
adjust
policie
s and
specifi
c
actions
.
Furthe
rmore,
the
High local-
respon
se
How to restart national economies during the coronavirus
1 crisis
for coordination of policies among what to expect, which in : eac
regions and avoids conflicting turn can facilitate h
solutions that could exacerbate the economic actions on a A sec
transmission. It could also offer mass scale with fewer tor.
citizens and businesses an idea of hiccups. For
n
inst
u
anc
Exhibit 5 a e,
n aut
At each stage, governments can implement c hori
policies that open parts of the economy: an e ties
illustration. d mig
ht
a defi
Readines ne
p
s to imp
p
restart ort
r
economy anc
o
e
Stage 1 Stage 2 a
usi
c ng
Population Higher risk Restrictions to transit in Stay at home or at
specified zones, times, and designated location
h met
days of the week With an rics
understa suc
Others No restrictions, but No restrictions but nding of
remote work is remote work is highly h as
recommended recommended each tot
region’s al
Economic Essential All sectors are allowed to Government begins to economic em
sectors operate, and key supply prepare the management structure,
chains operate on a of key supply chains in plo
market basis partnership with the governm ym
private sector ents can ent,
quickly vul
Others All sectors are allowed Most sectors are allowed
identify ner
to operate to operate but they need
to comply with specific places abl
social distancing and where
health protocols e
the job
Transport No restrictions to Some restrictions to economy s,
intraregional mobility; intraregional mobility, no can be or
interregional mobility is interregional mobility restarted
allowed but only between allowed con
regions in Stage 1 . To do trib
that well, utio
Assembly Events of up to 200 Events of up to 50 people governm n to
people are allowed in are allowed in public and ents can the
public and private private spaces
spaces assess eco
both the no
risk of my
Re e transmiss (Ex
sta c ion and hibi
rti o the t
ng n relative 6).2
the o economic
loc m importan This
al y ce of anal

How to restart national economies during the coronavirus

crisis
1
 ysis might • Agriculture
Some strategic sectors of the • Financial Low
require further
economy will need and
elaboration for
to operate even in insurance
subsectors and
lockdowns, including • Public
individual jobs. A administrati
healthcare, defense
characterization on and
and security, and
at this level of defense
Group 1
procurement of
• Manufacturi
detail could
strategic goods and ng
minimize the
services such as food,
loss of jobs that Sector 12 Sector 1
medicine,
entail only a low
energy, water, gas,
risk of R
and communications. i
Remaining sectors can s
be gradually reopened Sector 2 k
Sector 10
Group 2
regionally, as the Sector 7
Sector 4
o
public-health crisis
f
abates. One group
could start operating t
as a region’s readiness Sector 3 rSector 9
moves Group
from3 a
n
Stage 4 to Stage 3. A
s
transmission. second group could m
start operating once i
Sector 11 Sector 5 s
the region is in Stage
Sector 8 s
2, when the riskSector
of 6 i
transmission is o
relatively under n
control. High
Others could open
later, once the speed Low
Hig
of transmission has h
been minimized or Econo
mic
clear protocols have releva
been created to nce
account for the (varies by country)

activity’s higher risk Whe pro

of transmission. n toc
secto ols
2
rs to
Few metrics are available to describe specifically how an
economic activity contributes to transmission. Until a better start low
metric is available, we use a proxy based on the number of to go er
people interacting closely and for longer periods.
back the
to pot
Exhibit 6
work, enti
Governments can prioritize sectors based on their leade al
economic relevance. rs for
must furt
An illustration of how countries might prioritize sectors instit her
ute tra
Essential • Healthcare healt ns
sectors that • Public transportation h and mis
must be open • Utilities beha sion
at all times: • Information and communications vioral . In
How to restart national economies during the coronavirus
1 crisis
almost Additionally, each sector Exhibit 7
every and subsector may need
sector,
Protocols for safety and health are
to implement specific
businesses essential in every sector.
requirements and
will need procedures to guarantee Illustrative measures
protocols to the health of workers
maintain Cross-cutting measures1
and the rest
physical of the community.
distancing R trol
Public-health leaders and e • Encourage remote work
and prevent industry associations m for the next 3–6
a o
could work together to months
resurgence of t Health and • Create
design protocols for each e hygiene remote-work
new cases: subsector in the days policies that
remote work, before the quarantine is w offer
hygiene- and o employees
lifted. They could also r productivity
health- Reporting incentives
collaborate to provide k
oriented i • Ensure a
resources that educate n
guidelines, minimum
citizens and workers on g distance of 1.5
frequent how to apply those meters between
Enforcement two people1
monitoring of protocols.
people’s P • Define regulation to
h establish maximum
temperatures capacity in closed
Exhibit 7 illustrates y places
for early s
general and sector- • Suspend any in-person
i events that
detection of specific protocols to c congregates more
new cases, restart operations. a than 25 people
reporting of l
These recom- • Monitor people's
relevant temperature in all
mendations are based d buildings and shops
information to on McKinsey research i daily
the health s • Request
and the experiences of t
authorities, employee
several Asian countries a quarantine
and n when the
—such
enforcement c slightest
i COVID-19
measures to symptom
n shows up
guarantee g
compliance. • Establish daily
Indeed, the disinfection procedures
adoption of • Promote
mandatory health
these and hygiene
T protocols for
protocols and e employees (eg,
others can m washing hands,
heavily p wearing masks and
e gloves)
influence a r
sector’s a • Report to relevant
t health authorities
position on of any case with
u
the matrix. COVID-19
r symptoms
Jobs can be e
• Report the chain
redefined in of contagion to
a relevant health
ways that n authorities
make them d
• Perform random
safer to checks across
c sectors to
restart. o ensure
n compliance

How to restart national economies during the coronavirus

crisis
1
 • Im ict maximum
po • Imple capacity of
ment stores on per
se commu square meter
fin nicatio basis
es n and
marke • Ensure that all large meetings
in
cas ting are held online
campai • Set
es gns to differen
of encour tiated
no age e- work
nc comme shifts
rce (eg,
om
• Implement tax days,
pli nights,
an exemptions to e- weekend
ce commerce s,
holidays)
• Altern for
ate administ
remot rative
e work staff
with
face- • Set differentiated check-in,
to-
face food, and check-out times
work • Create a
as carpooling
much scheme for
as employees in
possibl order to prevent
e, them from
especi moving by
ally for public transport
admini • Extend opening times or
strativ
e staff commercial establishments
• Re • Set specific hours to serve
str high-risk population

1
All of these protocols should be clearly defined by local authorities based on their context and
needs.

How to restart national economies during the coronavirus

1 crisis
Technology will play an important
role in “licensing” people to return
to work, but each country will have
to consider privacy issues in
introducing such systems.

as China, Japan, Singapore, and South Korea—that

people to return to work, but each country will
have begun to use them.
have to consider privacy issues in introducing
such systems. The local-response matrix should
be refreshed frequently to guard against a rise
in transmission. Resurgence is a real risk and will
Countries need to introduce an additional level
inevitably occur in many locations.
of granularity to their efforts to protect lives and
livelihoods. Our approach requires continual
Countries are naturally anxious to restart their
strengthening of the healthcare system through
economies. So are citizens. But countries that
such factors as capacity for widespread testing,
deliberately shape the next normal, rather than
increased capacity of local ICUs, and the ability
moving to the next stage haphazardly, will have
to monitor and quarantine chains of transmission.
greater success in saving both lives and livelihoods.
Technology will play an important role in “licensing”

Andres Cadena and Fernando Ferrari are senior partners in McKinsey’s Bogota office, where Felipe Child and Juan Franco
are partners. Matt Craven, MD, is a partner in the Silicon Valley office. David Fine is a senior partner in the London office.
Matthew Wilson is a senior partner in the New York office.

Copyright © 2020 McKinsey & Company. All rights reserved.