How to minimize the impact of the coronavirus on the economy – POLITICO

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The coronavirus pandemic is bad for business. Local lockdowns, restrictions on social gatherings and travel disruptions have slowed economic activity, cut off supply chains and forced companies to furlough or lay off workers. So far, injections of government cash have kept many sectors afloat. But with further lockdowns and restrictions all but certain and government support scheduled to end, the economic outlook in Europe is looking dire.

How bad is it likely to get, and what can be done to minimize the damage?

Do capitalism differently

Mariana Mazzucato is a professor at University College London, and the author of “The Entrepreneurial State: Debunking Public vs. Private Sector Myths” (PublicAffairs, 2015) and “The Value of Everything: Making and Taking in the Global Economy” (PublicAffairs, 2018).

What happened after the 2008 financial crisis cannot happen again. Back then, governments injected more than $3 trillion into the financial system but failed to direct that liquidity toward good investment opportunities. As a result, most of the money ended up in the financial sector — instead of supporting the real economy — and taxpayers were left with the same broken, unequal, carbon-intensive economy as before.

Now, in response to COVID-19, governments are again flooding the market with liquidity — but this time they must lay the foundations for an inclusive, sustainable recovery. Some are already structuring their assistance to ensure a symbiotic relationship with the private sector. The French government, for instance, has made bailouts to the automobile and airline sectors conditional on reducing carbon emissions, and the Danish government has refused to rescue businesses using offshore tax havens.

These are good first steps. But we must set our ambitions even higher, using the recovery to do capitalism differently.

Governments need to attach smart conditions to bailouts that protect public interests, such as measures requiring companies to retain workers or prohibiting share buybacks. They must also govern public-private partnerships, ensuring that the rewards of public investment — such as funding the research and development of a COVID-19 vaccine — are returned to the public instead of handed over to the private sector. This requires governing intellectual property so that it fosters collective intelligence and not private rents.

We also need more ambitious investments in underlying health systems and public-sector capacity. This is the opposite of what is happening in countries like the United Kingdom, where such capacity is increasingly outsourced to consulting companies.

If we don’t fix the problems that have destabilized our economy for decades, we will continue to go from crisis to crisis. The time for change is now.

Revamp Europe’s social contract

Miguel Otero-Iglesias is a senior analyst at the Elcano Royal Institute in Madrid.

The economic effects of Europe’s battle against the coronavirus are close to those of a full-blown war: Our liberties are curtailed, traveling is reduced, fear is widespread and consumption and investments have been subdued. We can’t afford to treat the situation like we would any other macroeconomic recession. For all intents and purposes, we are at war, and we don’t know whether it will last a year, two years or more. We know when wars start, but we never know when they will end.

As the months have gone by, countless businesses have closed and unemployment has risen. Europe urgently has to take action.

First, stick together. We know that countries that pull together perform best in the long run.

Second, worry about winning the war against the virus, not the rise in national debt. Build an adequate health response with strong primary and hospital care; invest in testing, tracing and isolating capacities; and keep cash flowing to workers and companies.

Third, create a solvency procedure to decide which companies are illiquid but solvent and which are insolvent and need to go. Keynes needs to meet Schumpeter. Banks and states will have to work together.

Fourth, use this crisis to make your country more resilient and fair. Use spending to further long-term goals that are green, digital, inclusive and innovative.

Finally, make a mid-to-long-term plan for reducing the debt overhang via higher growth, slightly more inflation and an increase in taxes for those at the top. In other words, Europe needs a new post-war social contract.

Invest in the future 

Valdis Dombrovskis is executive vice president of the European Commission for an economy that works for people and European commissioner for trade.

With a growing number of EU countries facing a second wave of the virus, we know that difficult months lie ahead. Workers will be hit hard as restrictions are put in place to contain the pandemic. They, and the companies they work for, will need maximum support.

The good news is that we know much more about the virus than we did at the start of 2020. We are better prepared when it comes to medical care and protective equipment, and there is good progress in developing a vaccine that will be made available to many millions of people.

Still, we can’t underestimate the toll the pandemic is having on our economies. As long as the health emergency lasts, we know we must continue to give unprecedented support to companies and workers. 

At the EU level, our priority remains the same: protect people’s lives and incomes, keep businesses afloat and support the broader economy. The safety nets we established during the first phase of this crisis are still available and we encourage countries to make as much use of them as possible.

Looking ahead, we are focused on potential for economic growth. Our recovery plan, Next Generation EU, is designed to spur reforms and investments that will generate growth and jobs, and to make our economies more digital and climate-neutral. 

Meeting this challenging moment is also an opportunity for transformation. Countries that want to use the EU recovery fund will need to present plans that move their economy in that direction, with at least 37 percent of spending on climate and at least 20 percent on digital. 

To make the most of these funds, which are expected to start flowing in 2021, countries will also have to tackle inefficiencies in their public administrations and improve their business environment. This is how we can build back our economic strength, and build back better.

Ditch austerity

Rebecca Christie is a visiting fellow at Bruegel.

COVID-19 is a global killer. Austerity needs to succumb.

As long as governments are willing to find the money to backstop their economies, Europe has a chance at containing economic damage while the medical threat is front and center. If, however, old fears about inflation and the general evils of high debt come back to the fore, the EU risks cutting its own lifeline.

We know the virus doesn’t respect borders. It would be a pity if politicians used European negotiating venues to seek limits on their peers, rather than creating conditions in which all can prosper.

Global markets have shown that they are willing to invest in high-quality European debt. Meanwhile, inflation has fallen so low that more of it would be good for the economy, not a danger. While it’s possible to conceive of a time when those two conditions aren’t baked into the outlook, it’s not a near-term threat in the way that anti-borrowing philosophies might be.

The European Central Bank has so far been able to stand firm in its commitment to support the economy and lift inflation back up to target. Politicians need to support this effort and independently pursue fiscal paths that, as the ECB’s Isabel Schnabel said, serve as a complement to what monetary policy can offer.

Racism and xenophobia are the other big accelerators to worry about. Voters in the developed world have a disconcerting history of limiting social welfare when their nativist fears are triggered. Policymakers who want a healthy population and a healthy economy need to make sure they are creating conditions for the health of all of their citizens, not just the white ones.

Spend smart

Silvia Merler is head of research Algebris Policy & Research Forum.

The economic impact of reimposing tight lockdowns at a time when economies are still in recession and emergency public support is on the verge of being phased out in some countries will be high. Another plunge into lockdown carries the risk of disastrous consequences on output, employment and economic potential.

Enforcing social-distancing and mask-wearing, incentivizing teleworking in sectors where it is feasible and safeguarding critical social spending toward vulnerable groups are all key to avoid a painful hit to economic activity and social cohesion in the immediate term.

To ensure resilience on a longer horizon, governments will have to plan carefully how to spend the resources made available via the EU’s €750 billion recovery fund. The smartest way forward would be to prioritize investment in areas that can put the economy on a path to higher potential growth, such as education and training, research, digital, and green infrastructure.

Prioritize long-term success

Creon Butler is director of the global economy and finance program at Chatham House.

It didn’t have to be this way. China, South Korea and New Zealand have all managed to find ways to suppress, contain or even eliminate the virus. They are now reaping economic and social benefits.

As we try to get on top of the virus again, we should be asking three questions: What went wrong the first time? How can we ensure it will be different this time? And what is the long-term strategy to restore our way of life without being hostage to the uncertainties of vaccine development?

The answers will inevitably differ between countries, but three common elements are certain.

First, governments need to rebuild trust by providing an honest explanation of why the first round of lockdowns failed and start communicating quickly and openly with the public.

Second, they need to set out a clear and credible strategy focused on suppressing and eventually eliminating the virus. This is as much an economic necessity as it is a health imperative.

Individually, our goal should be to minimize our total close contact with others, while prioritizing those contacts that are most important to us. Collectively, we need to prioritize those activities that are most important to the long-term success and stability of our societies, such as school and university education.

Governments must also spend generously and equitably — as many did at the start of the crisis — to provide financial support to those who have been forced to stop working through no fault of their own. They need to fix urgently “track-and-trace” systems, even if this means rebuilding a failing system from scratch, and to accelerate economic and social adaptations (such as enabling infection-free international travel, holding socially distanced school exams or addressing the mental health crisis).

Third, governments must take action decisively, and, where the science indicates, pre-emptively. They must publish and then stick to clear and transparent metrics, share information to the fullest extent with local and regional governments and, wherever possible, make decisions collaboratively.

Kicking the can down the road is not an option.

Leave room for renewal

Megan Greene is an economist and senior fellow at Harvard Kennedy School.

The shape of the economic recovery will be determined first and foremost by the trajectory of the virus. With new COVID-19 cases spiking across Europe and additional restrictions imposed in many countries, a slowdown has already begun. But economic policy determines the shape of the recovery, too. 

The expiration of fiscal measures such as the furlough scheme in the U.K. and the sales tax cut in Germany is inappropriate in the face of a second wave. Government policies to mitigate the impact of the virus on workers and firms should still be viewed as catastrophe mitigation rather than fiscal stimulus.

Still, there is a balance to be struck. Governments should extend fiscal support to avoid a wave of insolvencies, which could prompt a downturn. But policymakers must be careful not to prop up so-called “zombie” companies and keep workers attached to firms and industries that are realistically never coming back. After a major economic dislocation, old firms are typically wiped out and replaced by new, more productive entrepreneurs — creative destruction, in economic parlance. If too much fiscal support is offered for too long, this process of renewal and growth is undermined. 

In addition to maintaining support at the domestic level, policymakers must get the EU recovery fund off the ground. It represents a potential lifeline for countries with little fiscal space to immediately respond to the crisis. 

With real yields negative across Europe, it should be a no-brainer for governments to borrow to support workers and small companies and avoid a recession in the face of a second wave. Doing so with a longer-term perspective makes even more sense: National and European institutions should support infrastructure projects that retool the economy for sustainability, generating high wage, high-hour jobs, boosting consumption and investment and addressing climate change — one of the biggest challenges of our time. 

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Brexit and the digital economy – State aid, data adequacy and Britain’s tech ambitions | Britain

IN SEPTEMBER Dominic Cummings, chief adviser to Boris Johnson, wrote to government employees laying out the government’s ambition for post-Brexit Britain to become a hothouse in which to grow technology companies with trillion-dollar valuations. Freedom from the EU’s rules about what financial support states may and may not provide to the private sector would help, he said, as the government would be able to pump public money into technology companies, stimulating a new generation of British giants.

There’s a problem with this vision. In order to get a trade deal with the EU, the government may have to give up the freedom to pump money into companies. And if it does not get a deal, another impediment may prevent its unborn tech giants from seeing the light. If the EU does not judge its data protection rules to be adequate after January 1st, and British entities may process Europeans’ data only after jumping through regulatory hoops, any potential technology giant will be hamstrung.

That is because Britain’s 66m people cannot alone sustain a trillion-dollar tech firm. Alibaba, Google and the like serve user-bases ten times that large. The pool of users of similar size most immediately available to Britain’s future tech giants, in which they would not be competing with Chinese or American ones, is the 446m folk of the EU. But the hard Brexit that would hand the levers of state aid over to Mr Cummings would almost certainly cut British companies off from Europeans’ data.

That is because European courts do not approve of British intelligence practices to which Europeans’ data is subjected upon being processed in the UK. Most recently, on October 6th, the European Court of Justice (ECJ) ruled that telecoms providers cannot be required to gather data on their users on behalf of security services on an ongoing basis, as Britain’s Investigatory Powers Act insists. Britain has used the country’s membership of the EU to argue that it has the right, as all member states do, to carry out national-security functions without interference. This has left a stalemate, and EUUK data flows untouched.

But once Britain is no longer a member of the EU, this defence falls apart. Britain will suddenly be in the same boat as America. The ECJ has been examining the transfer of EU citizens’ data to America for years, again citing concerns about overreach by its security services. In July the ECJ ruled that the blanket agreement which had facilitated EUUS data transfers, known as Privacy Shield, was not sufficient to protect Europeans from American spying.

The American technology giants are continuing to serve their European users through what are known as Standard Contractual Clauses (SCC), agreements negotiated directly with the EU over the terms of data transfer. Already onerous, the July ECJ ruling made them even more so, requiring companies seeking an SCC to prove that the transferred data will be treated according to EU law. Mature tech giants, with teams of expensive lawyers and data-protection experts, can easily bear those costs. Embryonic ones cannot.

These issues may be averted with a last-minute deal on data adequacy, even a temporary one. But any deal with the EU seems unlikely to come with the free-and-easy state aid rules that Mr Cummings seems to see as the key to building big tech companies. The EU wants tech giants too, to combat America’s and China’s digital influence. Quite why Mr Cummings imagines the EU would be keen on competition in the European market from state-backed British companies is unclear.

This article appeared in the Britain section of the print edition under the headline “Inadequate”

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what are their views on Covid-19, healthcare and the economy?

What happened in the debates?

Convention speeches are one thing. But the real test of these two pairs was during the presidential debates, when the American public finally saw the political opponents face each other on the debate stage.

Mr Trump and Mr Biden went at each other hammer and tongs in the first of three debates on September 29, but who won the first election debate?

In a bad-tempered and at times chaotic debate, the candidates ripped chunks out of each other on their records and issues such as the economy and race.

Mr Trump was rebuked several times by Chris Wallace, the moderator, for speaking over his opponent. At one point, after incessant interruptions from the president, Mr Biden said: “Will you shut up, man?”

On the weekend of October 3-4, the Trump campaign announced something of a relaunch of their campaign after the turmoil of the president’s illness, using the banner “Operation MAGA”, which stands for Mr Trump’s campaign slogan – Make America Great Again.

Mike Pence, the US vice president, went head-to-head in the vice-presidential debate that took place on the night of October 7 with Kamala Harris, the Democratic presidential nominee, in Utah.

There were two more presidential debates scheduled but when it was  announced the October 15 debate would be held virtually because of Mr Trump’s coronavirus diagnosis the president refused to participate. 

“I’m not going to do a virtual debate,” Mr Trump told Fox News, calling the decision “ridiculous” moments after the Commission on Presidential Debates announced the changes.

The final presidential debate was held at Belmont University in Nashville, Tennessee, on October 22. Donald Trump delivered a much less combative performance than his first meeting with Biden, as he repeatedly portrayed his rival Joe Biden as an establishment politician unable to bring about real change.

The debates were streamed by all major US networks, including ABC, CBS, NBC, Fox News, CNN and MSNBC.

Read more: Who won the vice-presidential debate?

So how do the candidates match up? We analyse the strengths and weaknesses of each politician. 

Joe Biden 

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The ’90 per cent economy’

Veteran forecaster Chris Richardson, from Deloitte Access Economics, doesn’t expect the economy’s production to get back to what it was at the end if last year until late 2021 or early 2022. He says our economy will be at least 3 per cent permanently smaller than it would have been had the pandemic not happened.


Even so, maintaining a bit over 90 per cent of the economy’s output in the face of a deadly pandemic has been quite an accomplishment.

In a way we’re fortunate the coronavirus outbreak happened in 2020 rather than in 2000 because, even two decades ago, the economic damage would likely have been far more severe.

Technologies that facilitate remote work have allowed millions to keep doing their jobs during the crisis. A study by the consultancy AlphaBeta, a part of Accenture, found the tools that enable remote work and collaboration permitted 3.2 million Australian employees to keep doing their work safely during the pandemic, including about 1.6 million who may have otherwise been unable to do any work at all. That’s a vast amount of economic output that would have been lost before remote working became possible on a mass scale.

At the same time, online shopping has helped keep our homes stocked with goods during the pandemic, delivery apps have made it easy for us to keep eating meals from our favourite restaurants at home and the digital delivery of movies, apps and music have kept us entertained.

But the strange circumstances of the 90 per cent economy will have lasting consequences. The adjustments made to sustain economic activity during the pandemic have altered the behaviour of businesses, workers and consumers.


Take businesses first. There has been an astonishing acceleration in the use of digital technology during the past seven months. AlphaBeta’s research found Australian companies have, on average, increased their adoption of some digital technology during the COVID-19 period by as much as the previous 10 years. The uptake of digital collaboration options, such as video-conferencing, has been especially swift. Most businesses intend to continue using these new tools and practices after the pandemic has passed.

Associated with this shift has been the vast, unplanned experiment in working from home. Before the pandemic Australia had been something of a laggard when it came to remote work. On the day of the 2016 census only 4.1 per cent of non-farm employees reported working from home, only marginally higher than in 2006.

But this year a legion of employees had their first taste of working from home, and many liked it.


A survey published last month by Sydney University’s Institute for Transport and Logistics Studies showed three in four workers believed that, post-COVID-19, their employers were more likely to support work from home than they did before the pandemic. A separate study by Swinburne University researchers John Hopkins and Anne Bardoel found three in four managers now believed their staff would do more remote work after the pandemic than before it.

The office isn’t dead. But the evidence suggests things won’t go back to the way they were.

Professor David Hensher, the director of the Institute for Transport and Logistics Studies, says the “new normal” for how Australia’s workforce balances time spent working from home versus time at the office might not become apparent until late next year. But he anticipates a substantial fall in work-related travel around big cities with major implications for the use of transport infrastructure, demand for office space and the character of our central business districts.

“There will be a decline in activity around our CBDs but quite a bit of that will relocate to the suburbs,” he said.


Meanwhile, the pandemic has been altering the way we consume and spend. A recent survey by the McKinsey consultancy found a majority of Australians had tried “new shopping behaviours” since the onset of the pandemic and most intended to continue with them. While many old spending behaviours will return once health risks fade, new habits picked up during the crisis will persist. That will also have sweeping repercussions.

The coronavirus-induced downturn has changed the way businesses, workers and consumers behave. Our economy will be fundamentally different as a result.

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Bumper harvest coming but can agriculture save the Australian economy?

The drought has broken in parts of Australia, but the recovery of farming won’t necessarily save us from a recession

(Image: Adobe)

It’s been a bad year for everyone except the grain farmers. After a painful drought gave way to the wettest winter in four years, farmers across the country are braced for a bumper harvest.

It’s a rare economic success story in a year when Australia slid into its first recession in three decades. But is it enough to help drive our post-COVID economic recovery?

When it rains, it pours

The numbers show just how the grain producers’ fortunes have turned.

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We’re running scared – and that’s a challenge for the economy

One of the trickiest aspects of the economic debate is breaking down which costs arise as the direct result of government lockdowns and which would arise anyway from the simple “fear factor” of the existence of the virus itself.

Economist Jeff Borland from the University of Melbourne has been reviewing the growing literature in the United States which compares economic outcomes, like consumer spending or mobility indicators, across jurisdictions that have pursued varying degrees of lockdown.

Illustration: Dionne GainCredit:

The main way COVID-19 affects economies is through reduced household spending, be it on flights, meals out or shopping in malls.

There are two potential mechanisms for this. First, and most directly, spending is crimped when governments impose laws strictly prohibiting economic activity – like, for example, leaving your house – in an attempt to curb the spread of the virus. But second, there are also the voluntary actions individuals take in their desire to avoid contracting the virus themselves, or spreading it to others. Indeed, countries like Sweden which have pursued a lighter touch approach to lockdowns have still suffered a significant reduction in their economic activity thanks to these precautionary actions.

In Australia, Borland says our lower economic output is attributable to both government policies and individual voluntary precautionary actions. His rough run of the numbers suggests the blame lies about “half and half” between the two. What does that mean?

Well, Daniel Andrews is not as omnipotent as some would make out. Amid recriminations, and severe frustration with lockdown rules, it’s important to remember that even absent the harsh lockdown measures, Melburnians would likely have engaged in some degree of self-isolation in recent months amid rising COVID-19 cases, and that would have hurt the economy too.

Says Borland: “You can’t blame the lockdown for all of the reduction in economic activity that has occurred. A lot of that would have occurred anyway.”

And yet, lockdowns are clearly not blameless: “It’s still the case that the restrictions have had some effect on reducing economic activity and then it’s a matter of whether you think those short-term costs are worth it for the longer-term benefits.”

The long-term benefits of lockdowns are that, if successful, they limit the spread of disease and give consumers greater confidence that they can go back to their economic activities sooner with less risk of contracting COVID-19.

According to Borland, to date it appears the benefits of lockdowns have exceeded the short-term pain: “I think that yes they definitely have, particularly when you look at what’s happening in Europe at the moment and having to go into second lockdowns.”


Studies in the US have shown that consumer spending is closely – and inversely – linked to COVID-19 case numbers and death rates. “The point is that everything comes back to the disease.”

Which is one way to look at it and certainly for many people, fear of actually contracting coronavirus remains their driving concern. To what extent that is justified, given low mortality rates for healthy individuals, is another matter. But fear can become a hydra-headed thing during a pandemic. And fear kills economies.

As restrictions ease, there is a hanging dread that rising caseloads may provoke yet another harsh government lockdown that would be difficult, mentally, for many.

There is, of course, continued fear of losing your job, or having insufficient income to continue meeting household expenses. The point at which these other fears become more terrifying than fear of the actual disease itself is hard to judge. But these are no mere bogey men.

Unfortunately, there are plenty of things to fear during a pandemic, including fear itself. Helping Australians to manage these competing fears and maintain a good quality of life during this period of intense uncertainty is the defining political challenge of our time.

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China’s revival is propping up the global economy

Given all these nice numbers, is it possible that China could be pulling off that hallowed V-shaped recovery? Factories are humming, exports are up and property sales in big cities exceed pre-COVID levels. After a slow start, rising consumer confidence is finally beginning to translate into higher spending. Retail sales jumped 3.3 per cent in September from a year earlier, a separate report Monday showed. Any drop-off would leave China’s revival lopsided and more exposed to exports. That’s a dicey prospect when recoveries in the US, Europe and Japan are proceeding with caution. Another qualifier is the role that China’s authoritarian political system played in locking down nationwide activity hard and early. The government also pursued reopening aggressively.

While the US is often derided abroad for prevaricating on masks, squabbling about fiscal stimulus and its thicket of national and local politics, democracy is never going to be perfect. The US remains the world’s largest economy, which has deployed a significant pile of assets to the globe’s benefit. The Federal Reserve led major central banks in flooding the financial system with liquidity, shoring up markets and unleashing a raft of special lending facilities. The Fed’s dollar swap programs with counterparts in the West and some important emerging markets eased a troubling shortage of greenbacks.

Important as China’s steps to stimulate its economy have been, they don’t come close to packing the same punch.

In fact, the People’s Bank of China has been pretty neutral, a considerable factor behind the yuan’s appreciation. The PBOC’s relative discretion is partly thanks to the stability the Fed brought to markets.


This comeback is welcome, and with it, the repudiation of skeptics who asserted Beijing had finally met its match with the virus. Yes, COVID-19 taught us that its four-decade expansion wasn’t infallible. China’s economy is mortal. Long live China’s recovery.

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.


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BHP dumps $3.5 billion expansion plan at Olympic Dam in ‘body blow’ for SA economy

Mining giant BHP has shelved a planned multibillion-dollar expansion at South Australia’s Olympic Dam, after studies of the ore body revealed underwhelming prospects.

The information was contained in BHP’s first quarter report, released this morning, which also detailed a $500 million smelter upgrade the company said would create 1,500 jobs during construction at the site.

While the report stated that Olympic Dam had yielded more than 50,000 tonnes of copper — the highest quarterly production since December 2015 — BHP said it would not be continuing with its planned $3.5 billion Brownfield Expansion (BFX).

It is not the first multi-billion dollar project at Olympic Dam the mining company has walked away from in the past decade.

“The studies have shown that the copper resources in the southern mine area are more structurally complex, and the higher grade zones less continuous, than previously thought,” BHP said.

“We have decided the optimal way forward for now is through targeted debottlenecking investments, plant upgrades and modernisation of our infrastructure.”

BHP also revised Olympic Dam’s projected maximum copper production from 350,000 tonnes per annum, to 300,000, following the drilling assessments.

“This will in turn lower potential future water requirements and support long-term sustainability of Great Artesian Basin,” the company said.

‘Body blow’ for SA economy

The expansion was slated to increase Olympic Dam’s annual copper production from 200,000 tonnes to up to 350,000 tonnes, as well as boosting its level of gold, silver and uranium production.

It was also expected to create 1,800 jobs during construction, and 600 additional permanent operational roles thereafter.

“This is a body blow for South Australia’s economy, it’s a body blow for the resources sector,” said Opposition mining spokesman Tom Koutsantonis.

“Those jobs were vital, we needed those jobs, we needed that investment,” he said.

SA Mining Minister Dan van Holst Pellekaan said BHP’s announcement was “disappointing”, but insisted the expansion had simply been delayed, not abandoned.

Mr Pellekaan said the government had received written confirmation from BHP late last week that they would ‘continue expansion’ of the Olympic Dam mine, but would not say whether the company specifically referenced the Brownfield Expansion.

“What we’re actually talking about is significantly increasing the production of copper.

“BHP has committed to investing $1.5 billion in Olympic Dam over the next two years, amounting to 1,500 jobs.”

BHP did not indicate an alternate timeline for the Brownfield Expansion in its quarterly report.

Nearby deposits ‘encouraging’

BHP emphasised that third-phase drilling of copper deposits at Oak Dam, 65 kilometres southeast of Olympic Dam, delivered “encouraging results”.

“Further high-grade mineralised intercepts of copper, with associated gold, uranium and silver have been confirmed,” the company report stated.

“The project will now move to planning for early stage design-evaluation and commencement of resource definition drilling in the first half of the 2021 calendar year.”

Oak Dam is not yet operational, and Mr Koutsantonis said he did not believe it would become so for another decade.

“The idea that we can miss out on investment now, and wait another ten years before we even start digging, I think is laughable,” he said.

BHP said it would continue to study options for growth at Olympic Dam over the long term.

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Eno Morales’ party claims victory in Bolivian election as former economy minister Luis Arce wins presidential vote

Arce, meanwhile, appealed for calm in the bitterly divided nation saying he would seek to form a government of national unity under his Movement Toward Socialism party.

“I think the Bolivian people want to retake the path we were on,” Arce declared, surrounded by a small group of supporters, some of them in traditional Andean dress in honor of the country’s Indigenous roots.

To win in the first round, a candidate needs more than 50 per cent of the vote, or 40 per cent with a lead of at least 10 percentage points over the second-place candidate. The independent counts, sponsored by the Catholic Church and civic groups, showed Arce with a little over 50 per cent of the vote and a roughly 20 point advantage over centrist former President Carlos Mesa, who also acknowledged defeat.

Officials said final results could take days.

Arce, who oversaw a surge in growth and a sharp reduction in poverty as Morales’ economy minister for more than a decade, will struggle to reverse the nation’s fortunes.

The boom in prices for Bolivia’s mineral exports that helped feed that progress has faded and the coronavirus pandemic has hit the impoverished, landlocked Bolivia harder than almost any other country on a per capita basis. Nearly 8,400 of its 11.6 million people have died of COVID-19.

Arce, 57, also faces the challenge of emerging from the long shadow of his former boss, whose support enabled the low-key, UK-educated economist to mount a strong campaign.

Exiled former president of Bolivia Evo Morales says he may now return. Credit:Getty Images

Anez’s government tried to overturn many of Morales’ policies and wrench the country away from its leftist alliances. Newly installed electoral authorities barred Morales from running in Sunday’s election, even for a seat in congress, and he faces prosecution on what are seen as trumped-up charges of terrorism if he returns home.

Morales, who turns 61 this month, said at a news conference in Buenos Aires, Argentina, on Monday that he plans to return to Bolivia, though he did not say when.

Like Arce, he took a conciliatory tone and called for “a great meeting of reconciliation for reconstruction”.

“We are not vengeful,” he said.

He declined to say if he would have a role in the government. But few expect the sometimes-irascible politician — Bolivia’s first Indigenous president — to sit by idly.

A boyhood llama herder who became prominent leading a coca grower’s union, Morales was immensely popular as Bolivia boomed, but support faded due to his reluctance to leave power, increasing authoritarian impulses and a series of corruption scandals.


He shrugged aside a public vote that had set term limits and competed in the October 2019 presidential vote, which he claimed to have narrowly won outright. But a lengthy pause in reporting results fed suspicions of fraud and nationwide protests followed, leading to the deaths of at least 36 people.

When police and military leaders suggested he leave, Morales resigned and fled the country, along with several key aides. Morales called his ouster a coup.

All seats in the 136-member Legislative Assembly also were also being contested, Sunday, with results expected to echo the presidential race.

“Bolivia’s new executive and legislative leaders will face daunting challenges in a polarised country, ravaged by COVID-19, and hampered by endemically weak institutions,” said the Washington Office on Latin America, a Washington-based human rights advocacy organisation.

Morales led Bolivia from 2006 until 2019 and was the last survivor of the so-called “pink wave” of leftist leaders that swept into power across South America, including Brazil’s Luiz Inacio Lula da Silva and Venezuela’s Hugo Chavez.

Morales expelled the US ambassador in 2008, though the embassy in La Paz has remained open.

Arce may have benefited from overreach and errors by Morales’ enemies. Anez, a conservative senator, proclaimed herself interim president amid last year’s tumult and was accepted by the courts. Her administration, lacking a majority in congress, tried to prosecute Morales and key aides while undoing his policies, prompting more unrest.

“A lot of people said if this is the alternative being offered, I prefer to go back to the way things were,” said Andres Gomez, a political scientist based in La Paz.

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