Covid19's cost

As he announced the closure of borders, shutting down of bars, extension of the suspension of classes and establishment of a multi-stakeholder committee to deal with the economic ramifications of covid19, the clear message of Prime Minister Dr Keith Rowley was of the serious impact this pandemic will have on the economy. The implication: Tighten your belts.

Responsibility in this situation, however, involves more than just avoiding panic buying, reckless exposure, and skylarking from work. It must entail careful consideration of the ramifications of a diminished workforce, uncertainty in the local and global economic sphere, the fall in petrochemical revenues, as well as heightened systemic risk. The contagion is not just biological, it is financial.

The Cabinet sub-committee, of which Rowley has now assumed chairmanship, charged with tackling the response to the financial side of things must urgently implement measures to fulfill a number of objectives.

Firstly, it must examine what stimulus measures, if any, can feasibly be used to bolster economic activity at a time when consumer spending will be negatively affected. For example, should Finance Minister Colm Imbert exercise his statutory power to issue directives to the Central Bank in relation to interest rates, following similar measures adopted in countries like the US in an effort to counter the anticipated fall in economic activity?

The committee has to consider what measures can be realistically enacted at short notice with a view to cushioning the blow. Given the already delicate pre-covid19 economic environment, this will be a challenge.

Secondly, the committee must also ascertain the degree of import cover available, a matter which may now be critical given disruption of the supply chain of various commodities. In terms of financing, the cover provided by the Heritage and Stabilisation Fund is of some comfort. However, our heavy reliance on food imports should be a cause for concern.

Thirdly, the committee has to attend to Tobago. This will involve coordination with the Tobago House of Assembly and its Secretary of Health, Councillor Tracy Davidson-Celestine. There have also been calls from Tobago hoteliers and business bodies for consideration of the impact of the anticipated fall in tourist arrivals and the disruption of supply to supermarket shelves.

Fourthly, while there is a separate committee on labour matters, the labour dimension will undoubtedly have a cost. This means the committee will have to have some degree of involvement in those matters as well as they are fleshed out in the coming days, weeks, months.

No one can see the future, but the crisis underlines the importance of contingency planning. It is worth noting that there have long been calls for us to become more self-reliant on matters such as food production. Ironically, this deadly pandemic might move us closer to giving that matter the attention it deserves.