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EconomyEconomyScience& TechnologyEnvironment& EnergyLong-termPlanningIndustry& HigherEducationSocietyEducationTel. 972-4-8292329 Fax. 97-4-8231889Technion City, Haifa 3200003, Israelwww.neaman.org.ilSeptember2020Build Back Better:Toward a Visual StrategicPlan for SuccessfulEmergence from COVID-19The Case of IsraelProf. Shlomo MaitalElla BarzaniGraphics: Adva Gilad-Yakir

Build Back Better:Toward a Visual Strategic Planfor Successful Emergencefrom COVID-19The Case of IsraelPart IA Survey of ‘Build Back Better’ ResearchResearchers:Prof. Shlomo MaitalElla BarzaniGraphics: Adva Gilad-YakirSeptember 2020Technion, Haifa 3200003Tel. [email protected] 04-8231889

No part of this publication may be reproduced without prior written permission from theSamuel Neaman Institute except for the purpose of quoting short passages in reviewarticles and similar publications, with an explicit indication of the source.The opinions and conclusions expressed in this publication are in the opinion of theauthor(s) and do not necessarily reflect the opinion of the Samuel Neaman Institute .

3ContentsContents . 3Abstract. 4Introduction: Predicting the Pandemic . 4Predicting the Pandemic . 5Build Back Better: A Survey of Research on Disaster Recovery . 7Origins of “Build Back Better” . 7Debt Phobia . 9It Takes a Village . 11Disaster Capitalism . 13Risk Reduction & Risk Management. 14Economic Impact . 15Summary & Conclusions . 16References . 17

4“For a healthy politics to flourish, it needs reference pointsoutside itself — reference points of truth and a conception ofthe common good.”Prof. Moshe Halbertal, Dept. of Philosophy,The Hebrew University of JerusalemAbstractThis three-part research paper proposes a strategic long-run plan for Israel, asit emerges from the COVID-19 pandemic. It is based on three key sources: (a)a landmark pre-pandemic UN report, on how nations can build back better afternatural disasters, along with related research,3 (See Part I), (b) a new book byRuchir Sharma, 10 Rules for Successful Nations1 which includes extensiveglobal historical data, (See Part II) and (c) in Part III, a visual approach forbenchmarking economic, social and political performance of Israel, relative toother nations, which we call the SNI Wheels of Life.2Currently, Israel and other nations focus single-mindedly on dealing with thepublic health crisis caused by COVID-19, as well as on the short-term economiccrisis it has brought. This is understandable, with widespread unemploymentand even hunger. The resulting crisis, however, has the potential for initiatingpowerful long-term reforms.In this report, Part I, we conduct a survey of recent research on the theme of‘build back better’ – how capable nations bounce back and rebuild after naturaldisasters, with the overarching theme of Build Back Better.Introduction: Predicting the PandemicThe global pandemic that began in late December 2019 caught most of theworld’s nations unprepared. Israel is no exception. This occurred, despitenumerous warnings. (See Box).A crucial element in “build back better” is the degree of preparedness for thecrisis, in advance of its occurrence. Consider, for example, the hurricanes thatregularly strike the Atlantic coastline and inland regions of the United States.The official hurricane season for the Atlantic Basin is from June 1 to November30; the peak of the season is from mid-August to late October. It is known withcertainty that powerful hurricanes will occur during this period.Yet when Level 5 Hurricane Katrina occurred in August 2005, it caused over1,200 deaths and 125 billion in damage, particularly in the city of New Orleans

5and the surrounding areas. The emergency response from federal, state andlocal governments, led by FEMA – Federal Emergency Management Agency,was widely criticized, and its head was forced to resign as a result. FEMA simplywas not prepared.With 1.4 billion international arrivals (trips) per year, and with a globalecosystem in which goods, services, people, information, and money flow freelyfrom country to country, it was not difficult to predict that a highly contagiousvirus would spread rapidly from country to country. Yet in large part, no nationwas fully prepared for the resulting pandemic.Hence, an important part of any emergence strategy must be to (a) debrief,analyzing lessons learned from the pandemic, specific to each country, and (b)implement plans to deal with future such pandemics, if and when they occur,with emphasis on rapid reaction.Predicting the PandemicWe were warned. Here is the proof:Bill Gates, TED talk, 2015: If anything kills over 10 million people in the nextfew decades, it’s most likely to be a highly infectious virus rather than a war,”Gates said. “Not missiles, but microbes.” Gates noted that many countriesworked for years to reduce the risk of nuclear war, and needed to give similarattention to a massive mobilization against a killer virus. “We’ve actuallyinvested very little in a system to stop an epidemic,” he said, echoing warningsin recent years from infectious disease doctors. “We’re not ready for the nextepidemic.”Vaclav Smil, “Global Catastrophes and Trends” (book), Sept. 2012:“Consequently, the likelihood of another influenza pandemic during the next 50years is virtually 100 percent”

6Preparing for the Next Pandemic, By Michael T. Osterholm, Foreign Affairs,July/August 2005: “This is a critical point in our history. Time is running out toprepare for the next pandemic. We must act now with decisiveness andpurpose.” And in “Deadliest Enemy: Our War Against Killer Germs”, he warned,the US is not properly prepared for a pandemic.Robert G. Webster, “Flu Hunter: Unlocking the secrets of a virus”: “Nature willagain challenge mankind with an equivalent of the 1918 influence virus. Weneed to be prepared.”In 2018, the US intelligence community’s Worldwide Threat Assessment teamwarned that “a novel strain of a virulent microbe that is easily transmissiblebetween humans continues to be a major threat”.In the 2019 threat assessment: “We assess that the United States and the worldwill remain vulnerable to the next flu pandemic that could lead to massiverates of death and disability, severely affect the world economy, straininternational resources and increase calls on the US for support.” [The Trumpadministration, without explanation, postponed the DNI’s annual WorldwideThreat Assessment which warns that the U.S. remains unprepared for a globalpandemic. The office of the DNI was scheduled to deliver the Assessment tothe House Intelligence Committee on February 12].US AID Director Jeremy Konyndyk, Politico, 2017: “At some point a highly fatal,highly contagious virus will emerge, like the 1918 Spanish flu pandemic, whichinfected one-third of the world’s population and killed between 50 and 100million people”. He added that President Trump is unprepared for such apandemic.US National Security Council, Dr. Luciana Borio, director of medical andbiodefense preparedness: in 2018: “The threat of pandemic flu is the numberone health security concern. Are we ready to respond? I fear the answer is no”.(John Bolton disbanded the NSC team).2006: Massachusetts Flu Pandemic Preparedness Plan: public health officialspredicted as many as 2 million people could become ill. [4.25 million peoplehave so far been ill with the coronavirus in the US and the numbers mount].Stephen Soderberg’s movie Contagion, released in 2011, is about a fictionalvirus called MEV-1, which became a global pandemic after a bat spread it to apig, who spread it to a person . The fictional virus had a 72-hour incubationperiod and high fatality rate.Albert Camus’ 1947 novel The Plague described an epidemic in Algeria .Few listened to the modern-day prophets. There were far more of them thanthe few listed above. Indeed, fake news/conspiracy mongers blame Bill Gates

7for the pandemic (along with George Soros), even though the Bill and MelindaGates foundation has donated, by some reports, over 350 million to COVID19 mitigation and innovation.We have consistently turned a deaf ear to wise experts who warned ofimpending disaster and urged us to prepare. Perhaps after the pandemic, wemay listen more closely.Build Back Better: A Survey of Research on DisasterRecoveryOrigins of “Build Back Better”The bureaucracy of the United Nations is not often seen as a wellspring ofinnovative, pathbreaking ideas. “Build back better” is an exception. The UnitedNations Office for Disaster Risk Reduction employed this mantra, and a set ofaction items to implement it, in 20173. But the origins of “BBB” go back to 2005,when former US President William (Bill) Clinton was appointed special envoyfor tsunami recovery, by the UN Secretary General, and issued a report in 2006,titled Key Propositions for Building Back Better 4.Clinton’s 10 key propositions for building back better are shown below, in thebox, slightly shortened. Build Back Better: Clinton’s 10 Propositions1. Families and communities drive their own recovery. 2. Recovery mustpromote fairness and equity. 3. Governments must enhance preparedness forfuture disasters. 4. Local governments must be empowered to managerecovery efforts, donors should devote more resources to govt. recoveryinstitutions. 5. Good recovery planning depends on good information. 6. UN,World Bank, and other multilateral agencies must clarify their roles andrelationships. 7. The expanding role of Red Cross/Red Crescent carries greatresponsibilities for quality in recovery efforts. 8. From the start, governmentsmust create the conditions for entrepreneurs to flourish. 9. Beneficiariesdeserve agency partnerships that move beyond rivalry. 10. Good recovery mustreduce risks and build resilience.

8Clinton’s 10 propositions refer specifically to natural disasters, such as the 2004Indian Ocean tsunami, among the deadliest natural disasters in human history,with at least 230,000 people killed or missing in 14 countries. As we write this,the novel coronavirus pandemic has killed 823,000 people worldwide andinfected over 23 million. All of Clinton’s BBB propositions apply to the currentpandemic, which is itself a kind of natural disaster, to a greater or lesser degree.For example, efforts to develop a vaccine are national in nature. But individualsand families are being forced to rely on their own resilience andresourcefulness, as government relief efforts often fall short. And while effortsare focused on ‘flattening and lowering the curve’ (of those infected), there mustbe ongoing efforts to learn how future pandemics can be dealt with, and futurerecoveries managed, with far greater competence.The follow-up UN report3 offers a four-stage program for BBB -- also highlyrelevant to the pandemic emergence and recovery – defining BBB in concreteterms as this staged process: Reconstruction – restoration of resilient critical infrastructures, servicing,housing and livelihoods required for the full functioning of a community Recovery – Restoring and improving livelihoods and health, as well aseconomic, physical, social, cultural and environmental assets Recovery Framework – Establish a common platform for the wholecommunity to build, sustain and coordinate delivery of recovery capabilities (nota plan but a “strategy outlining long-term goals and the way progress ismeasured”. Rehabilitation - Restoration of basic services and facilities for the functioningof a community or a society.Again, there is strong emphasis on community. Again and again, we have seennational governments struggle to manage the pandemic, issuing country-wideedicts that do not meet the needs of specific communities – those less affectedby the pandemic and those extremely impacted by it. for example, many monthsafter the onset of the pandemic, authorities in Israel are working to adaptlocalized strategies, with a “stoplight” system that defines communities as red,green or orange, in degree of infection.

9Debt PhobiaThe lockdowns implemented to curtail spread of the coronavirus impacted theeconomies of the world disastrously. Second quarter 2020 data show declinesof 20-25 % in Gross Domestic Product, followed by slow recoveries. Withmassive unemployment, and widespread fear and uncertainty, personalconsumption collapsed; this component comprises some 70% of GDP in manyWestern countries, and its decline led to bigger falls in gross capital formation.So with two key components of GDP in free fall, a huge shortfall in spendingand in demand occurred. Only government has the ability to offset it, andprevent catastrophic unemployment and bankruptcies.The last comparable macroeconomic shock of this magnitude occurred in the1930’s. Many important lessons can be learned from this episode, especiallythe policies of President Roosevelt and his New Deal, beginning with hiselection in 1932.5, 6 (See Box).The US, Israel, EU and other countries have spent heavily on pandemic relief.The result has been soaring budget deficits. Many elected officials havebecome alarmed, a phenomenon known as debt phobia. This could lead tosharp cuts in relief spending, precisely when such spending is desperatelyneeded. The paradox is that if governments stop stimulating the economy, thedebt burden will in fact grow, because even if the numerator of the debt/GDPratio (public debt) remains constant, the denominator (GDP) may shrink. ManyEuropean Union nations learned a bitter lesson, in the wake of the 2008financial collapse, that austerity (slashing budget deficits in the face of debtphobia) is counterproductive and destructive.

10 Lessons from the 1930’sI asked Harvard historian Prof. Lizabeth Cohen, whether a premature cut in USgovernment relief spending could be damaging, based on the 1930’s: Here isher response5:“A pull-back too soon is indeed a real danger. The Republicans in Congressand the White House are already working to curb national spending. Given thatthis pandemic is not fading any time soon, we will not be able to get back to anormal economy and people will continue to face unemployment, evictions,hunger, ill health, and much more. Many mayors and governors have beenexemplary in their efforts to put people before budgets, but only the federalgovernment can take on debt. These lower levels of government will soon needto balance their budgets. Many policy makers and economists, in fact, feel thathad the federal government spent more in response to the 2008 financial crisisthe nation’s recovery would have been quicker. Will that lesson be learned? Ihope so, but a lot will depend on the November election.” Well before the pandemic, Prof. Manuel Trajtenberg7 made an exhaustive studyof Israel’s underinvestment in government services and proposed sharplyraising Israel’s public consumption-to-GDP ratio, to repair longstandinginfrastructure decline, while maintaining the ratio of public debt-to-GDP ataround 60%, lower than OECD levels. The pandemic caught Israel’s healthservices unprepared, with too few doctors, nurses and hospital beds. A buildback-better approach following the pandemic should apply Trajtenberg’ssystematic model, while using the randomized controlled trials approach to testthe most effective ways to spend public money. Randomized controlled trials,the method used to test safety and effectiveness for vaccines and drugs, hasbeen applied by Economics Nobel Laureates Duflo, Banerjee and Kremer totest and implement evidence-based approaches for public policy. 8, 9

11Trajtenberg’s approach can overcome chronic debt phobia, while meeting vitalneeds and overcoming shortfalls in public services.It Takes a VillageA strong theme in the BBB literature is the crucial role played by family,community and village. Zhao et al.10 study the aftermath of the Wenchuan earthquake in China, in2008, which over 69,000 people lost their lives in the quake, including 68,636in Sichuan province; 374,176 were reported injured, with 18,222 listed asmissing. Goulding et al.11 review the recovery efforts following the 2011 Tohukuearthquake and ensuing tsunami in Fukushima, that decimated a nuclear powerplant. Press reports show a disastrous aftermath: The tsunami swept theJapanese mainland and killed over ten thousand people, mainly throughdrowning, though blunt trauma also caused many deaths. The JapaneseNational Police Agency report confirms 15,899 deaths, 6,157 injured, and 2,529people missing across twenty prefectures, and a report from 2015 indicated228,863 people were still living away from their home in either temporaryhousing or due to permanent relocation. Aryal et al.12 review disaster relief in Nepal, in the wake of the Ghorkaearthquake in Nepal in April 2015; it killed nearly 9,000 people and injurednearly 22,000. Francis et al.13 survey ‘build back better’ efforts in New Zealand, following the2011 Christchurch earthquake The earthquake struck the Canterbury region inNew Zealand's South Island and was centred 6.7 kilometers (4.2 mi) south-eastof the centre of Christchurch, New Zealand's second-most populous city. Theearthquake caused widespread damage and killed 185 people. Yang et al.14 review the work of a Korean NGO, implementing a DRR program(disaster risk reduction) in Myanmar, in the wake of a disastrous cyclone.

12Cyclone Nargis was an extremely destructive and deadly tropical cyclone thatcaused the worst natural disaster in the recorded history of Myanmar duringearly May 2008. The cyclone made landfall in Myanmar on Friday, 2 May 2008,and sent a storm surge 40 kilometers (24 miles) up the densely populatedIrrawaddy delta, causing catastrophic destruction and at least 138,373 fatalities.These five natural disasters between 2008 and 2015 disrupted the lives ofmillions and caused almost a quarter of a million deaths. While there are majordifferences between a global pandemic, and a local or regional natural disaster,many important lessons were learned by scholars, in the wake of theseearthquakes and storms.“Most activities were responsive (to the disaster) rather than preventive(preparing in advance)14. Even though typhoons in South Asia are common,and with global warming, are growing more frequent and more intense; andeven though earthquakes are frequent in Japan, and to a lesser degree,elsewhere, preparedness is quite limited. Japan is an exception: every citizenthere has a ‘go-bag’, in readiness for evacuation, for example.This applies to pandemic preparedness as well. Despite experts’ prediction thata pandemic was inevitable (see above), personal protective equipment (PPE),ventilators, masks, and other equipment were in short supply for months, inmost countries.Effective disaster relief was community-based. For example, in the Fukushimadisaster, a discipline known as community based operations research wasimplemented – defined as “emphasizing place, space, community to real lifeproblems [to] prioritize the needs and concerns of disadvantage humanstakeholders”11. The global pandemic has shown enormous variance in itsimpact on communities. In the US, poorer areas, indigenous Americans, Blackand Latino populations, factory workers, etc. have been disproportionatelyaffected. Each community has different needs and concerns, and they must beaddressed at the community level.‘Build back better’ has been employed for well over a decade. In the ChineseWenchuan disaster, it was applied at the village and community level. Themantra itself inspires hope by specifically and directly tackling local needs andconcerns, that existed before the disaster, and leveraging the disaster as anopportunity to confront and eliminate them.10Disaster relief is often managed ‘top down’ – from national agencies, who bringrelief to communities. The literature shows that a ‘bottom up’ approach mustalso be integrated and strengthened. Communities know their own needs best,can articulate them, and should be empowered and enlisted to help meetthem.11

13Disaster CapitalismFor some, capitalism is itself a disaster. iNaomi Klein15 notes how in theaftermath of the 2008 global financial crisis, itself caused by greed-is-goodunrelated capital markets, credit swaps and junk mortgages, the new capitalistsystem restored the playing field for Wall St., banks, hedge funds, etc., in someways more favorably than before.But the term disaster capitalism has an opposite, utterly different employment16.The authors studied the aftermath of the disastrous L’Aquila earthquake in Italyon April 6, 2009.The earthquake was felt throughout central Italy; 308 people are known to havedied. Seven members of the Italian National Commission for the Forecast andPrevention of Major Risks were accused of giving "inexact, incomplete andcontradictory" information about the danger of the tremors prior to the mainquake. Six scientists and one ex-government official were convicted of multiplemanslaughter for downplaying the likelihood of a major earthquake six daysbefore it took place and each was sentenced to six years' imprisonment -however the verdict was overturned on appeal. Criticism was also applied topoor building standards that led to the failure of many modern buildings in aknown earthquake zone: an official at Italy's Civil Protection Agency, FrancoBarberi, said that "in California, an earthquake like this one would not havekilled a single person". [Wikipedia].The authors note that disaster risk reduction (DRR) and the resilience paradigmhave existed since the 1980’s. The focus is on “building community resilience.”iSee Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism. Picador; 1st edition (June 24,2008). “Disaster capitalism operates by delivering massive shocks to the system and then using theensuing period of anarchy, fear and confusion to reassemble the pieces of what it has broken into anew configuration. This is what was done in the aftermath of the financial crisis (of 2008).”

14Disaster capitalism involves “a shift from centralized civil protection to decentralized inclusive community empowerment systems”.Klein focused on how unscrupulous individuals extract private advantage fromdisasters. This has been widespread in the pandemic, with panickygovernments throwing money at anyone who promised masks, PPE,ventilators, etc. In the top-down centralized relief effort after L’Aquila, theauthors conclude that “despite expenditure of around 22 billion euros 11 yearsafter the earthquake, red zones still exist (areas that suffered intense damageduring the earthquake and are deemed unsafe to build on) and over 10,000people live in temporary housing . [The top down approach resulted in] rentseeking, elite capture, corruption, and organized crime infiltration, instead ofenabling inclusive social learning and socially sustainable transformation” (16 p.18).This disaster capitalism is being repeated in governments’ desperate race for acoronavirus vaccine. Billions are invested up-front in pharma companies, bigand small, on weak promises that a vaccine will emerge, removing any risk fromthe companies themselves. Will the public trust the result, even if an effectivevaccine does emerge, when profit rather than public health drives the process?Risk Reduction & Risk ManagementThe definition of ‘build back better’, according to its originator the UnitedNations17 is: “the use of the recovery, rehabilitation and reconstruction phasesafter a disaster to a) increase the resilience of nations and communities throughintegrating disaster risk reduction measures into the restoration of physicalinfrastructure and societal systems.”The core of build back better is DRR – disaster risk reduction – simply, as theBoy Scouts say, “be prepared”. Preparing in advance reduces the risk ofmassive disaster and loss of life. Dube studies BBB and DRR in the context ofefforts in Zimbabwe.

15Amaratunga18 reports on a global survey of DRR, at the local level, conductedunder the UN in Latin America, Asia, Africa, Europe and Arab states. Althougha wide variety of tools exist for reducing disaster risk and mitigating disaster –such as local government self-assessment, and Disaster ResilienceScorecards, and many others – “a majority of local governments did not useany tools to support DRR”.Saya et al.19 argue that “countries and communities are much better equippedto ‘build back better’ when they have taken actions to strengthen recoverycapacity and decision-making effectiveness prior to the onset of disaster”. Anessential component of BBB is BP: Be Prepared. But few do so.Fernandez et al.20 summarize BBB research and observe, expectedly, that“numerous experiences have proved that it is easier said than done”.Iyengar et al.21 emphasize the key role of entrepreneurship, as a way to buildadaptive capacity in community-based healthcare organizations. Localcommunity-based entrepreneurship – initiating and implementing creativeideas, often without major resources, to improve wellbeing – is a vital part ofany BBB program.Economic ImpactThe pandemic has had a massive impact on local, national and globaleconomies22,23. The core trade-off has proved very difficult to optimize -between saving lives (public health) and saving jobs (economy). A bitterargument rages. Lock down severely, diminish the spread of virus, and thenopen the economy? Or open the economy, with public health measures, as apriority? As second and even third waves sweep over nations that hadpreviously thought they had overcome the pandemic, uncertainty mounts.Maital & Barzani24 survey recent efforts to simulate the impact of thecoronavirus pandemic. This is a necessary first step to simulating the economicimpact of the pandemic. They note that there is considerable confusion in themetrology of COVID-19 – the particular measures used to track and assess thepandemic. These simulations are crucial, because they are widely used bypublic health officials in designing current and future policies.Botzen et al.25 provides a useful survey of economic modelling of naturaldisasters. They make an important distinction between direct effects, on GDP,employment, unemployment and incomes, and indirect effects – short and longterm losses, arising from disasters, that are not directly measured. The latterinclude, for the pandemic, mental health and post-trauma disorders, and

16disruption of the movement of people, goods and information. The indirecteffects for the current pandemic may be particularly large.Summary & ConclusionsIn this study, Part I of three parts on Build Back Better, we have surveyed theliterature on disaster recovery, focusing on ‘build back better’. This three-wordmantra, now adopted even in the US presidential election campaign, isseductive, logical, but rather poorly implemented. A key theme of our surveyhas been the crucial role of local communities and neighborhoods.Disaster relief is generally assumed to be national, international and top-down.Again and again, we have seen scenes of well-meaning aid pouring in todisaster-stricken areas, aid which often is inappropriate and unusable. Withclimate change, for example, communities face a growing need to organize andprepare. Yet the pressing problems of short-term needs often push asidelonger-term considerations, such as the risk of natural disaster, which includespandemics.The global pandemic has caught the world largely unprepared, lacking keyresources that could have saved lives. It may occur that stockpiles ofventilators, PPE’s, masks and other equipment will in future be set aside. Butthis is insufficient. Strategic preparedness plans are needed, trickling down allthe way to local communities and neighborhoods. And as we emerge from thepandemic, a key part of recovery efforts must be to repair all the deficiencies,inequalities, shortages and mistakes that made the pandemic far worse than ithad to be. In our real-time diary of Israel’s stop-start approach to COVID-19,we observe how little we understood about COVID-19 and how slowly, haltingly,we learned (26 Maital and Barzani).We can build back better. To do so, we will need to enlist every possible ounceof creativity and innovation27. And we will need to figuratively open our windowsand implement best-practice benchmarking, observing what other countrieshave done and adapting their innovations to our needs and situation 28, 29. Itremains to seize this mantra, which everyone can embrace, and translate it intodetailed, effective, pragmatic action plans.

17References1Ruchir Sharma. The 10 Rules of Successful Nations. Penguin: London, March 2020.2S. Maital, T. Buchnik. Wheels of Life in Israel. S. Neaman Institute for National Policy Research,2017. ael3Build Back Better: In recovery, rehabilitation and reconstruction. UNISDR – UN Office for DisasterRisk Reduction, 2017.4Clinton, W. J. (

'build back better' - how capable nations bounce back and rebuild after natural disasters, with the overarching theme of Build Back Better. Introduction: Predicting the Pandemic The global pandemic that began in late December 2019 caught most of the world's nations unprepared. Israel is no exception. This occurred, despite