There's good news and bad news, and the focus has rightly been on the bad.
The covid19 pandemic has brought about a spectacular collapse in the global economy. Stock markets, commodities and bonds have nose-dived, central banks have failed to stem the tide, legislatures squabbled over trillions in aid. Job losses are legion, international supply-and-demand chains have been disrupted: producers face labour challenges, and house-ridden consumers are spending less. Travel and tourism have all but come to an end.
The IMF predicts a recession as bad as during the 2008 global financial crisis or worse. And, with astonishing timing, a full-fledged oil price war has erupted between Saudi Arabia and Russia. When it rains it pours.
And locally it has definitely been pouring. Methanex has decided to shut its plant in Point Lisas. Finance Minister Colm Imbert estimates the oil revenue shortfall could be as much as $5 billion. At the same time, the Finance Minister needs to find money to fund the dramatic beefing-up of the health system needed to carry us through the storm.
When it comes to following the State’s guidance about not congregating, some may be "harden." But because most people are complying, our businesses are now feeling the pinch. Even banks have had to trim their opening hours.
“Companies around the world are having to adjust their plans to be able to survive in these difficult times,” noted the TT Energy Chamber last week. “One of the options being taken by companies is to decrease the production of commodities for which there is falling demand.”
Yet, there’s another side. It may seem facile, especially to those who have lost their jobs, but it’s important not to ignore the opportunities that have also emerged.
For instance, social distancing has brought about a dramatic paradigm shift in how we do business. Necessity is the mother of all invention, and workplace practices that yesterday seemed reserved for a select group of millenials are now standard.
The IMF, for all its bad news, still expects recovery in 2021. To get there, it is paramount to prioritise containment and strengthen health systems everywhere. While there is a risk our hospitals may become overburdened, this pandemic has already tested and shored up our capacity as never before, preparing us, in the long run, for anything else on the horizon.
Additionally, the State is promising the payment of income tax refunds, and VAT refunds too are finally coming. The government is providing support in the form of food cards for thousands of families.
The eagle-eyed among us will sniff out investment opportunities that arise every time there is a fallen market. Perhaps banks will finally have something to do with that excess liquidity. Turning to the IMF or Andean funding is normally something looked at with suspicion, but emergency funds that would otherwise be unavailable now are. The Heritage and Stabilisation Fund is not our only cushion.
Whether life after covid19 will look like a sci-fi dystopia or not will depend on how well we are able to appreciate these sides of the coin.