The novel coronavirus, also known as COVID-19, has thrown the world economy into a tailspin, and the difficulties are just beginning for North America as more cases emerge and businesses weigh their options.
The U.S. Centers for Disease Control and Prevention reported 849 cases nationwide as of March 10, and more than 118,000 cases worldwide (numbers continue to climb), including more than 4,000 people who have died from the Coronavirus.
The stock market has responded, plummeting to a low on Monday not experienced since December 2008. While the market rebounded somewhat Tuesday, it remained turbulent, and analysts have stressed to the New York Times that any recovery in the markets will likely be tenuous.
A Brief Overview of the Virus
The outbreak of COVID-19 originated in Wuhan, China, and has spread to 91 other countries, according to the CDC’s count as of Tuesday, March 10.
Researchers are still figuring out how easily the novel Coronavirus spreads. What we do know is that many carriers initially fly under the radar with few or no symptoms. The incubation period is considered relatively long — infected persons can harbor the virus for two weeks or more before showing signs and symptoms that tend to include fever, cough, respiratory issues and shortness of breath (much the same as those of the flu or a cold, though the COVID-19 mortality rate is much higher at 3.4%, according to World Health Organization (WHO) estimates). Meanwhile, an asymptomatic “super-spreader” can disproportionately infect a large number of people (10 or more). For perspective, during the SARS epidemic in Singapore, a mere five super-spreaders were responsible for 144 out of 204 cases.
The virus has profoundly shocked Italy, a country home to 60 million people and to Europe’s worst outbreak. The country is in total lockdown to try and contain the virus’ spread. On March 10, media reported that within a mere 24 hours (Monday to Tuesday), Coronavirus killed 168 more people in Italy. That brings the country’s total death toll to 631. Italy’s significant elderly population makes the country’s burden more severe. Italy remains under quarantine orders until at least April 3rd — people are being told to stay at home; schools and universities are closed throughout the country; and public gatherings including funerals and weddings are banned. As news reports are putting it, “there is no red zone, just Italy.”
The Economic Fallout
CNN Business reports that Italy’s nationwide restrictions may plunge the world’s eighth largest economy into a steep recession.
Globally, issues began with supply-side disruptions due to the closure of Chinese factories. Meanwhile, global demand — both business and consumer spending — has dropped. Corporations have responded by reducing output and cutting workers. Laid-off employees have contracted their consumption, and even those who remain employed have started to pull back out of fear. Slower economic activity is weakening gross domestic product (GDP) and government budgets.
As for Italy, Prime Minister Giuseppe Conte said the government will respond by pumping more money into the economy to mitigate the impact of the outbreak.
And as for the U.S., on March 10, no consensus was reached during President Trump’s lunch with Senate Republicans concerning ways to boost the economy and blunt the impact from the spreading coronavirus, sources told CNN. Trump has said he’ll discuss with Congress tax cuts and aid for hourly employees out of work to help the economy cope with the impact of the epidemic.
As economists are warning, Italy’s situation today could become any country’s fate tomorrow. Below, Native Business weighs the coronavirus’ potential impact on Tribal economies.
Events & Hospitality
Cancellations of high-profile events like South by Southwest in Austin, Texas, and the Indian Wells tennis tournament in Southern California have a ripple effect, depriving economies of customers and revenue. These trade shows, entertainment and sporting events are being canceled due to fear of the infected mingling with the well in a giant petri dish. Experienced hoteliers know all too well the story of Legionnaires’ Disease, the potentially life-threatening type of pneumonia that killed 29 members of the American Legion who stayed at the Bellevue-Stratton Hotel in Philadelphia in 1976.
With such strong Native investment in the hospitality industry — the casinos, hotels, resorts and performance venues that bring in big bucks for many Tribes — a threat like COVID-19 could prove major to certain Tribes’ prosperity. Gaming Tribes are exploring avenues to offset revenue loss, such as mobile sports betting and online casino gaming — where legal.
Looking to government aid: Trump’s top economic advisers have reportedly raised the idea of paid family sick leave and targeted relief for industries hardest hit by the outbreak — specifically the tourism industry: hotels, airlines and cruises, reported CNN.
NIGA’s Big Show Isn’t Canceled
While cancellations such as South by Southwest set a nationwide precedent, Indian Country seems to be responding on a case by case basis. NIGA’s annual Indian Gaming Tradeshow, scheduled for March 24-27 in San Diego, is still a go, according to organizers — but cautiously so. Chairman Ernie Stevens, Jr. announced earlier this week that NIGA’s “tradeshow team is working closely with the San Diego Convention and Tourism Authority, as well as local hotels, to ensure preventive measures are in place to keep our attendees safe and surrounded by the best sanitary conditions available.”
Seattle: Ground Zero (in the U.S.)
Seattle, with the most COVID-19 cases and deaths so far in the United States, is our domestic “ground zero” for the outbreak, and the livelihoods of the 29 Tribes based in the state of Washington could be affected.
As of March 10, two more people in Washington State died of Coronavirus, bringing the death toll in the state to 22, and the overall U.S. death toll to 29.
From an economic standpoint: consumers aren’t spending in the Puget Sound area, The Seattle Times reports. But Washington’s Tribes might take some solace in the fact that, prior to COVID-19, Seattle was experiencing a record economic boom thanks to the tech industry, and the very nature of online business might see it through the crisis. Put simply, if people prefer to stay indoors and do their shopping online, and if businesses encourage virtual workplaces, e-commerce and cloud computing could see business increase. That’s a ray of hope for Seattle and the surrounding areas; Washington’s Tribes can hope that such stability would carry over into their own businesses.
How Bad Can It Get?
Worldwide, the travel and tourism industries are taking some of the biggest hits, which is a bad sign for Indian Country, with so many Tribal businesses tied to resorts and casinos. In northern Italy, the hardest-hit region of Europe, hotel bookings are down over 70% in Milan and Venice. Air travel to Europe was down nearly 80%, according to ForwardKeys. As Covid cases spiked in Italy, cancelations began to outnumber new bookings. As of March 9, the entire country of Italy is essentially closed to travel in or out, in an attempt to contain the outbreak.
COVID-19 Hits Tribal Land
Indian Country’s first confirmed case of coronavirus occurred on the Confederated Tribes of the Umatilla Indian Reservation, in Oregon near the Washington border. The person who contracted the virus is a worker at the Wildhorse Casino Resort, which shut down completely for two days while the facility underwent a deep clean, then reopened on March 4. Three close contacts of the employee tested negative for the virus, and the casino stressed that he worked in an area of the casino that is closed to the public and did not have anything to do with food service.
Is Indian Country Prepared?
The threat of economic disaster for Indian Tribes looms as it does all over the world.
The coronavirus has overwhelmed Italy’s health system with hospitals operating at 200% capacity — and that could be an indication of the strain put on national, state and Tribal health care resources.
Tribes are rushing to figure out how to protect populations and save lives before businesses. The Native population is 5.2 million, in 574 federally-recognized Tribes, many living on the 320 reservations scattered across the country.
The underfunded Indian Health Service looks to play defense with just 12 Tribal Epidemiology Centers. “We don’t have links with our Tribal health departments and/or state health departments in order to share data or real-time incidence, prevalence and any kind of mortality data or information related to this,” said Dean Seneca, executive director of Seneca Scientific Solutions in Cattaraugus, New York, and a Tribal member of the Seneca Nation. “Our systems are just not in place in order to do good active surveillance.”
Time Is of the Essence
On the national scale, there’s a lot of finger-pointing right now, with accusations that the federal government didn’t act quickly enough when COVID-19 was gaining momentum overseas. Wildhorse Resort & Casino in Pendleton, Oregon, moved quickly to shut down its facilities — not only the casino but also the hotel, convention center, movie theater, children’s center and the restaurants — for the deep clean. For businesses threatened by the coronavirus, swift and decisive action is key. Wildhorse played it smart by closing so many venues, rather than trying to clean one while letting the others operate normally. When dealing with a contagious disease about which so much remains unknown, nipping incidents in the bud appears to be the best policy.
Don’t Hesitate; Communicate
Businesses facing coronavirus are essentially in a crisis situation and as most crisis managers will tell you, communication and information are the most valuable commodities. Employees, partners, vendors and customers want to know what is going on, and more than that, they want to feel the business is doing something to meet the challenges. Lack of information breeds confusion and misinformation — which will tend to spread, as it were, virally in conversations over social media and text messages.
Crisis communications managers interviewed by Oregon Business recommended forming an internal crisis team consisting of the CEO, CFO, CMO, and heads of departments including IT and HR. With an evolving threat like coronavirus, the crisis team would want to meet daily, and communicate to all constituencies as frequently as necessary. “One thing clients don’t plan for is all the different constituencies that will require communication,” said Lisa Heathman, “everyone from internal audiences to external stakeholders. Sometimes this includes law enforcement and compliance entities.”
A Cherokee Nation leadership team — comprised of physicians, nurses, infection prevention, and other subject matter experts — are meeting daily to review contingency plans for the coronavirus, News on 6 reported, adding that Cherokee Nation Health Services intends to initiate their own virus testing soon.
As decisions are being made with an eye to protecting personnel and perhaps even saving lives, a business’ plans and commitments will be disrupted. In today’s litigious society, doing the right thing may leave a business — whether a casino or a mining company — with some level of legal exposure. Furthermore, recent rulings connected to the opioid epidemic, in which courts are proving more sympathetic to citizens than corporations, raise the spectre of actual personal injury lawsuits over COVID-19.
What if a Tribal business is taking all reasonable precautions and acting in good faith, but an employee or customer still gets the virus? Proactive businesses are enlisting lawyers from various fields — trade, health care, employment, privacy and corporate law — to make sure the business is protected.
Can Tribes Play the Sovereignty Card?
The Navajo Nation announced its COVID-19 Preparedness Team on February 28. Although risk to the Nation is considered to be relatively low, the Tribe is concerned that the federal government could send infected medical workers to the reservation. “The IHS has commission corps officers helping at our facilities, and sometimes those individuals are sent out to other ‘hot zones,’ or areas that might be affected by this outbreak,” said Jonathan Nez, Navajo Nation President. “It’s not up to us, but the part that is up to us is reentry into our sovereign Nation.”
The Navajo Nation requested that any workers who’ve been in a hot zone remain outside the Nation for 45 days afterward. The Navajo might not need to invoke sovereignty rights in this way, but it’s a possible option for Tribes who might find that their best interests conflict with government edicts.
Meanwhile, two large South Dakota Tribes have imposed travel restrictions in response to the Coronavirus outbreak.
“This ban is necessary given the spread of the COVID-19 virus,” Rosebud Sioux Tribe President Rodney Bordeaux said on Friday to prevent government-funded travel. “There are too many unknowns and lack of test kits to determine who may be carrying it.”
New Oglala Lakota Tribal President Julian R. Bear Runner followed suit by implementing a travel ban for employees and requesting off-reservation residents and visitors remain outside Pine Ridge Indian Reservation until travel restrictions are lifted.