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The road to recovery is paved with challenges

The Philippines has probably had the longest COVID-19 quarantine period in Asia. The government clearly took the virus threat early on and quite seriously. Although we lacked the testing and treatment capacity in the early days of the quarantine, I believe the lockdown made a difference in containing the spread of the virus. Perhaps, without it, our case numbers would have been much worse than the latest reports tell us. We will never really know but I would like to think that the 60 days of ECQ counted.

Unfortunately, the lengthy quarantine period may have pushed the economic safety nets beyond their limits. We have to remember that it was the health crisis that caused the government to deliberately put the economy in a state of crisis. Therefore, the cure to the economic crisis is dependent on the cure for the pandemic. The scale and scope of social relief programs, business shutdowns and employment disruption are beyond anything we have experienced, much less planned for. This is unprecedented, indeed, and conventional economic wisdom is at odds with the calls of our health experts.

Other countries have managed to get the virus under control. Thailand has had no reported new case of COVID-19 in more than a month. Vietnam had the earliest success, while Singapore had a run of cases in the construction sector but they have since arrested the rise. The spread in Malaysia is now contained. The Philippines and Indonesia remain as the hotspots in the region. The good news, though, is that testing and treatment capacity has increased significantly.

The argument of saving lives (the health experts) versus livelihood (the economic experts) eventually becomes meaningless; in the end it’s both about saving lives. Without a functioning economy, businesses remain shuttered, trade and commerce is halted, unemployment rises, incomes are disrupted, people struggle to meet their daily needs, calls for government relief grow and public coffers are emptied without any new tax revenues to replenish depleted funds. There is no good ending to this vicious cycle.

Understandably, the economic managers of government are increasingly pressing the case for jump-starting the economy. The business sector is, for obvious reasons, backing them up. The longer recovery initiatives are put-off, the longer it will take to return to any degree of normalcy – not to mention how much costlier it will be. I think the government is taking a balanced approach by trying to re-open the economy in a measured way while preserving minimum health standards. The most critical success factor to this is the cooperation and vigilance of the citizenry. Wearing a mask and face shield, for example, reduces the probability of spreading – and catching – the virus by up to 99%. If this is diligently followed, the speed of opening up the economy can be accelerated.

Another critical success factor will be the ability and effectiveness of local government units to address any surge of cases in specific clusters. It seems that the mayors are working to make this happen. The business sector is also supporting the national and local governments by implementing their own testing and tracking protocols. Together this will improve detection and treatment. Ultimately, this will, again, lead to a faster yet measured revival of economic activity.

Micro, Small and Medium Enterprises (MSMEs) are the most challenged in terms of meeting the contingent health costs of reopening their business.  Perhaps, government can consider some tax relief to offset these costs.

Beyond supply side considerations, equally important success factors are demand stimulus and the restoration of consumer confidence.

We need to be confident that we can safely go about our daily lives with a reduced or managed risk to exposure to COVID. We have no maps to help navigate us through this unprecedented health and economic crisis. We can, however, each do our part and truly heal as one nation.

Vincesocco101@gmail.com


Source: Manila Bulletin (https://mb.com.ph/2020/09/28/the-road-to-recovery-is-paved-with-challenges/?utm_source=rss&utm_medium=rss&utm_campaign=the-road-to-recovery-is-paved-with-challenges)

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