How Countries Could Rebuild Their Economies During & After The Lockdowns?
The lockdown and the spreading of the COVID-19 have altered our lives. Since February of this year, self-isolation has become a norm, congregations no longer take place, Zoom meetings have become the new hangout places and ‘work from home’ is the new mantra.
The impact of the COVID-19 on the world has been unprecedented. There has been a halt in global economic activity and trade and commerce have shrunk. It seems as if the world has been hit by an invisible enemy. The world going into lockdown is akin to how people tried to protect themselves during the Second World War.
The developed and developing economies need to take prompt action to ensure that life goes on. First, the countries need to keep their hospitals and healthcare staff working at optimal levels. Health workers must be protected and rewarded for their efforts. Special efforts are needed to procure proper medical equipment including suits, gloves, and masks. In China, over 1700 healthcare workers have been affected by Covid-19. More than 100 health workers in Italy have died because of the virus which includes 30 nurses and nursing assistants. Over 80 healthcare professionals have lost their lives in the UK. These include Medhat Atalla (Doncaster Royal Infirmary), Ann Shepherd (Moir Medical Centre in Long Eaton), Grant Maganga, mental health nurse, Manjeet Riyat, Royal Derby Hospital, Dr. Rajesh Kalraiya, Queen’s hospital, Jitendra Rathod, a specialist cardio-thoracic surgeon. Clinical staff, assistants, nurses, doctors, surgeons, and specialists from the medical field are vulnerable. The hospitals, as we all know, are working under an emergency. We must be thankful to all the healthcare workers and staff who are actually the frontline soldiers for the world in this fight against COVID-19.
Second, there will be a need to bolster the economy and trade in the coming months. The COVID-19 virus has disrupted all sectors of the economy. More than 26 million people in the US have lost their jobs. China’s GDP fell 6.8% in January-March 2020, the first largest decline to the country’s economy since 1992. A loss of 0.8% to 1.3% loss to GDP growth in Pakistan is also estimated.
According to the Asian Development Bank (ADB), Covid-19 could cost the world US$ 2 trillion to US$ 4.1 trillion, which is nearly 2.3% to 4.8% of the world GDP. Instead of creating new organizations to monitor, observe and implement strategies to counter the adverse impacts of COVID-19, the governments need to use the available human resource and institutions. They must start transforming the existing infrastructure in line with the demands of the economy.
Third, the manufacturing business has been facing limitations as all production and distribution of goods has been halted. The procurement of raw material and the distribution channels have been disrupted. According to Statista, when comparing the statistics of January-February 2020 to 2019, the motor vehicle sector in China saw a 31.8% decline in manufacturing while manufacturing of general machinery was reduced by 28.2%. According to McKinsey Global Institute, the six sectors that will take the longest time to recover or restart are commercial aerospace (by the fourth quarter in 2021), air and travel (by second quarter 2021), insurance carriers (by fourth quarter 2020), oil and gas (by third quarter 2020), automotive (by third quarter 2020) and apparel/luxury (by second to third quarter 2020). Manufacturing concerns need to develop a strategy on what to produce and how much to produce. Priority must be the main objective.
Fourth, the governments across the world must provide relief to the manufacturing concerns during this period of distress and lockdown. They should also think of providing stimulus packages once the lockdown is lifted and life returns to normalcy. According to the UN, a US$ 2.5 trillion Covid-19 rescue package is needed for the world’s emerging economies.
The world can come out of this predicament when the countries forge a clear vision, have a strategy to back their vision, employ available resources and think of restoring people’s livelihoods.