I decided not to publish the original part 2 of “A nightmare” as I’d written it. The changes since I wrote it just two weeks ago have made it outdated already. Which shows just how drastically COVID-19 is changing the world we live in.
Every day is different. Things are not going to be the same again for a very long time. Structural changes in society and how business is conducted are likely outcomes from this crisis. Much as how 9/11 revolutionized security measures throughout the world, COVID-19 could well do the same for how societies are managed and businesses are run.For instance, we will no longer maintain a large office. We’re a think tank, our researchers and writers can work just as well from home, even more productively without the 3- to 4-hour daily commute. Online buying, already growing at unprecedented rates, is going to accelerate even faster. The Walmarts of the world are shifting — or suffering, especially the smaller physical stores. Three weeks ago, I forecast a worst case for GDP of 3 to 4 percent. NEDA, never the doomsayer, said last March 24 that a 0.6 percent contraction is possible if the virus is not contained. That 4.3 percent is its best case, but that was before the two-week extension. The 5 to 6 percent best case I thought possible two weeks ago if everything went right is now thrown out the window. How much worse can it get? Will this downward trend continue, or have we now reached the lowest point of what to expect for the economy?
With Luzon in lockdown until April 30, and accounting for 72 percent of national GDP, the lost production, lost spending, and lost job opportunities are becoming more apparent in their magnitude as the days and the hours go by.
We’re looking at the need to give cash to an estimated 18 million households who’ve lost the income of their breadwinners, and will continue to until this is all over — and that could be months. Lack of national IDs and the speed needed challenge the DSWD’s ability to cope, made even more difficult by the fact that all are working from home without the needed infrastructure. Reliance should shift to the local barangay level where the officers know everyone in their local community — they know the people who have lost their job, their income, and those who haven’t. The challenge, though, is how to get the correct level of money to the eventual recipients without any of it being lost on the way.
One way to ensure that money gets to the people in need is for the government to provide funds to companies so they can continue to pay employees their wages. This is also so that employees can conform to the lockdown without having to worry about running out of money to buy food and medicine. Businesses, especially
MSMEs, need to be assured through financial support that they will be able to continue to operate after the lockdown is over, so the hit on the economy will be tempered.
That means government has to subsidize.
Giving certificates that can be used in supermarkets, food outlets, and pharmacies, as the government is now doing, is a smart way to ensure the money is used as intended.
Getting money to the people quickly will be the biggest handicap to surviving this crisis. People can’t be left without food and water.
The continued lockdown until end-April is the best option for the country given its limited health care resources. That should retard the spread of the infection, enabling the health care system to recover and regroup and buy time until a cure becomes available, and for some semblance of decent economic activity to return. But as I said in my column two weeks ago, we may not get that cure if the DOH doesn’t lift its price controls.
The key to success is the cooperation of the population to stay home, and for government (with the generous help from private groups) to assist those who have lost their daily livelihood so they can stay home. These are extraordinary times and they demand extraordinary solutions — we cannot rely on textbook solutions which don’t have a pandemic situation to practice on.
It’s a grim time.
Email: wallace_likeitis@wbf.ph