There is light at the end of the Covid-19 tunnel, with an approved vaccine expected shortly and new super-swift testing and tracing capabilities. However, businesses remain desperate and fearful, and that is to be expected.
This Virgin Islands swimming instructor met his key sponsor on a recent breezy day at a marina and resort on Tortola. The marina and resort manager — a charismatic man with a relaxed bonhomie — was unusually melancholic. He was clearly burdened with the horrific impact that the pandemic was having on his business.
“We need a national plan for reopening, Mr. Igwe,” he asserted. “My revenues are down over 50 percent, and that is having dire repercussions for my customers and employees. There is only so much we can bear before we may have to close down, even if that means for one season.”
Now, this writer has supported the government’s posture that it will be directed by the science — and only by the science — in its plans for reopening the territory and economy. However, he fully appreciates the concerns of business that relies on an open and free market and a stress-free trading environment.
Closed borders, lockdowns and curfews are excellent for containing and controlling the spread of the coronavirus. However, they are also a death knell for any economy.
So far, 2020 has been a miserable year. The coronavirus has killed hundreds of thousands around the world. And it has also confined the rest of us to our homes for much longer than usual as the virus has ravaged the VI economy, especially travel and tourism.
And in the colder countries to the north, especially North America and Europe, as autumn days get colder and shorter and Covid-19 cases surge, a dismal time looms ahead. Covid-19 appears to be a nightmare that will never end.
The cries of the tourism and maritime industry in a territory like the VI are understandable. In the US, Canada and Europe, businesses have been supported by trillions of dollars of government stimulus. A territory like the VI simply cannot afford such generous support to keep the population in jobs and out of poverty.
Consequently, the end to this horrible time is the hope that a vaccine will be forthcoming soon. Scientists around the globe are racing to develop a vaccine. Regulators everywhere are fast-tracking approval processes.
While it is not yet clear whether any particular vaccine will prove to be safe and effective, pharmaceutical companies are preparing to crank up production of many promising candidates. Governments are even creating a market for vaccines by placing big orders in advance. If at least one of these bets pays off, 2021 will be a much happier year.
A vaccine offers investors renewed confidence. That is the main economic benefit in a vaccine short term.
When investors — who run the global economy — feel confident, there is frequently a rising confidence of consumers and businesses. That is usually the path out of recession. Economics is first and foremost about confidence.
The hope is that once a vaccine is approved and widely distributed, humanity will finally be free to hug elderly relatives, socialise with both friends and strangers, move around as we please, and get back to work more or less normally.
In the meantime, governments like the VI’s, which do not have the power to create trillions of dollars of stimulus, must use every effort to ensure their economies survive by listening to the cries of their businesspeople.
One option for the VI is creating a regime of pandemic worker who will test, trace and isolate residents and aliens as a means of driving normality in the economy. That regime should be supported by a Covid-19 tax and levy on travellers, who should rightly cover the costs of such a programme.
New technologies, like wristband trackers and cell phone applications, should enable Covid tracers to keep an eye on travellers who enter the territory after testing negative.
A look around the world will reveal that the VI is not unique in having locked borders and having implemented severe travel restrictions. And until a vaccine is approved and widely distributed, this is going to be the norm everywhere.
In Europe, a second surge is forcing another round of restrictions and local lockdowns. The US — the world’s worst affected country — is already seeing a second surge that is worrying scientists.
Yes, government must listen to business. And government must provide businesses with a plan to reopen the territory and economy that is transparent and widely available. But businesses also must understand the inability of government to “pull a hare out the hat” and return to pre-pandemic normality in the time of Covid.
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