Well, we now have what you might call scant evidence that the answer is not good at all. It’s far from convincing, complete or decisive proof of anything. But it is concerning and worth keeping an eye on. You see, the nation with the highest percent of vaccinations in the world is seeing a COVID-19 surge. Read that again. And the island is implementing lockdown like restrictions. Schools have been closed and sporting events cancelled. So far. I’m talking about Seychelles. Over the past days, the country’s COVID cases have spiked, despite 62% of the adult population being vaccinated. Bloomberg has this headline: ‘World’s Most-Vaccinated Nation Activates Curbs as Cases Rise’. The rise is large too: The BBC has more data: ‘The archipelago of nearly 100,000 people recorded close to 500 new cases in the three days to 1 May and has about 1,000 active cases. ‘A third of the active cases involved people who had had two vaccine doses, the country's news agency said. ‘The rest had either had a single dose or were unvaccinated.’
Four-fifths of cases are locals, the rest tourists. So this isn’t an entirely imported problem. The vaccines used were a mix of China’s (60%) and AstraZeneca’s (40%) vaccine. Hopefully not actually mixed in any one person… What should we make of all this, scientifically speaking? I’m not sure. Nor do I care to guess anymore. The virus seems designed to humiliate anyone with an opinion about it. But the severe threat that keeps me up at night is another wave of COVID-19 in a nation that has been vaccinated. Whatever ‘been vaccinated’ actually means… Seychelles is a very small sample size, 62% is not 100%, and the vaccines are just two of the many available. But the rising cases aren’t going to help me sleep any better… What will financial markets make of the news? Well, back when we were all googling where Wuhan is, markets weren’t worried. Now we’re googling where the Seychelles is… Consider this article as me getting on the record about the news from Seychelles. I won’t be able to say ‘I told you so’ if markets crash in coming months as vaccines turn out to be less effective in reality than assumed in trials. But at least you won’t be completely taken by surprise if all hell breaks loose as the recovery evaporates. Maybe they’ll call it the Seychelles financial crisis? Australia left behind If vaccines, which were supposed to save us, come with a load of ifs and buts, that may mean lockdowns and quarantines continue. The precautionary nature of the measures continuing would be just as precautionary. The UK and much of Europe might well open up if vaccine effectiveness is limited. The cost and benefit calculation may or may not suggest lifting restrictions. But can Australia open up? Can we risk an outbreak in parts of the nation that have so far been comparatively spared? I think Australia’s politicians will say ‘no’. Their pitch of keeping COVID-19 out of Australia would be undermined completely if they ever let an outbreak happen. And so Australia is stuck with a precautionary level of policy so precautionary that it doesn’t allow a return to normal. I’ve called it ‘Australia’s Sakoku’, named after Japan’s 214-year isolation from the world in the 17th, 18th and 19th century. Nobody was allowed to leave or enter and trade was limited. I’m not going to tell you what my wife’s ancestors did to Christian missionaries found wandering their lands… No doubt subscribers laughed at the idea of Australia being similar to Japan in Sakoku. Until the recent India drama… Don’t worry too much, I’m sure they won’t be fining Australia’s cricketers $50,000 or jailing them for returning from India. And they’re the ones who could actually afford the fine… The more relevant point is that all this has costs. And Australia, while escaping COVID-19 quite well, is now stuck in a corner. Japan fell behind under Sakoku, as all nations do when they try to shut themselves off from the world. As Australia would if it tries to remain isolated. Of course, I’m biased. I’m stuck in Japan, waiting to fly home. My family have never met my daughter, after a year and four months of troublemaking… That’s a small problem compared to what others have experienced during COVID-19. But it’s also a problem that very few nations in the world impose on their citizens… Here in Japan, COVID-19 cases are also rising. But life continues on as normal, as far as I can tell. Except for the masks everywhere, people are barely changing their lifestyles. Unlike in Sydney… But don’t get sidetracked. The real story could end up being Seychelles, not Sydney. Good luck sleeping… Until next time, Nickolai Hubble,
Editor, The Daily Reckoning Australia Weekend | 
