KT edit: Stimulus packages should focus on the poor, middle class
This pandemic threatens to ravage the global economy and communities; the scale of the challenges we are confronting is unprecedented and mounting by the day.
Published: Wed 25 Mar 2020, 9:00 PM
Last updated: Wed 25 Mar 2020, 11:31 PM
With a fifth of the world's population under some form of lockdown, economic challenges that appear on the horizon seem intimidating. Fact is the global economy is staring at a recession or could even stall if steps are not taken soon. Looking at the rapid spread of coronavirus infections more countries could respond with stringent measures to buy time against Covid-19. Shutting down society is the most effective way to protect people and save lives. Children, the elderly and people with underlying health conditions are the most vulnerable to the march of this pathogen.
This pandemic threatens to ravage the global economy and communities; the scale of the challenges we are confronting is unprecedented and mounting by the day. The world hasn't experienced such a health disruption in a hundred years that is threatening to take down economies with it. History cannot guide our leaders in such tumultuous times. Perhaps they need to start from scratch to get it right. A lockdown of society could slow life down and limit the spread of the virus, thereby sparing already strained health systems from the rising toll which no country wants. The measure worked in China and South Korea. When half of the world's population lives on less than $5.50 a day, it is not hard to imagine the debilitating impact of such extreme steps on lives and livelihoods. At this point in time, it is not just the people who are at the bottom of the wealth pyramid who are struggling to survive but also the middle class, many of whom might be out of jobs as soon as we recover from this pandemic.
The labour market can be brutal. This virus threatens the lives of millions, and could compound their suffering when a global recession hits hard. The blow will be hard to bear for ordinary folk. Small and medium businesses are struggling to stay afloat, supply chains are getting snapped, transport and logistics are coming to a halt, schools, colleges and universities have been shut for months, airplanes are spending more time in hangers than in the air. All this will have a domino effect on the entire economic ecosystem. Besides, this health shock could soon lead to a larger crisis that includes extreme poverty, mental health issues, and more.
The struggle to contain Covid-19 is emblematic of the unique challenges that countries are facing during this turbulent time when community health is the immediate concern. An economic crisis is looming and if we don't want to get to a depressing state of economic lockdown, measures must be taken now, when the chips are down. Any lockdown, as heavy-handed as it may seem, is necessary, but it will make the impending economic pain more bearable. Compassionate economic measures must be rolled out as community controls are being tightened for health security. But these economic packages should be realistic in scope, easily implementable and designed to benefit the weakest sections. Stimulus measures are noble, but deliverables matter, not the size of the package. Leaders should think from the viewpoint of people who struggle to put bread on the table. Local administrations and activists could help during such times, and governments would do well to have their ears to the ground. Direct schemes such as cash transfers to bank accounts are a start.
Free health camps for the poor, distribution of grains, cereals in villages with restricted access to markets, slashing charges of essential services like electricity and water in cities (announced by the UAE) could help. The US is announcing a $2 trillion package, European governments would be pouring billions in their economies. India has also announced an aid package of Rs150 billion. The UAE has also taken a slew of stimulus measures worth billions. Moreover, there are financial initiatives to help residents in Abu Dhabi. More measures could follow that cover all seven emirates. These are hard times that demand humane decisions. This pandemic is upending the world order, but countries, communities and corporations will emerge stronger if they focus on people over profits. The poor matter, so does the middle class, who bear the burden of real economies through their sweat and toil. Open borders, technology and greater mobility made the world prosperous, but a germ that is invisible to the naked eye, has exposed vulnerabilities among mighty nations who have been brought down to earth. Yes, people matter. Profits can wait.