[COVID-19 Report] An Opportunity for Change?
June 28, 2020 by Min Jun Kim
As of the time of writing the article, there have been over 7,300,000 cases of COVID-19 infections and 400,000 related deaths. COVID-19 has been wreaking havoc across the globe since the first officially reported case of the virus back in December 31 last year and we have seen drastic changes to how we operate as a society during this period of great uncertainty.
The spread of COVID-19 has already caused many changes to our lifestyles. Social distancing measures, and in some countries, lockdown measures have become the new norm for society. People wear masks when in public, travel has been limited, and workers are generally recommended to work from home if possible.
Recently, however, countries have begun loosening their levels of social restrictions and firms are revving up to start up their factories. This, despite infection rates not falling by any significant rates. The stock market has also recovered to pre-outbreak levels; reflecting the expectations of people that the current outbreak is only a short-term crisis and that the real economy will soon be recovering.
Although there are many with optimistic outlooks hoping for a swift end to the current crisis, expectations of a global recovery hinge on the assumption that a vaccine will be developed as soon as the first or second quarter of 2021. Although possible, the success is dependent upon the process being perfect. Vaccine development usually take years and even decades. Compressing the timeline of development to 12 or 18 months comes with significant potential risks and even after a vaccine is developed, there are no guarantees production can be ramped up safely and quickly.
Just by looking at China, it is clear a full economic recovery is a long way off as well. Yes, the supply side of the economy is back up and running at approximately 90% of its capacity compared to before outbreak. Nevertheless, despite an easing of lockdown measures since March, consumption and investment levels are still down and unemployment rates are also expected to remain high – dampening hopes of a swift economic recovery.
The world has become more interconnected than at any previous time in history and the economic expansions resulting from it has been exponential. However, while we were indulging in the fruits of globalisation, we have neglected to put in place safeguards or even assess the potential risks that came with such explosive growth. The outbreak of COVID-19 has brought many of the underlying societal problems to the fore.
Throughout the world, people deemed to be working in essential sectors have had to risk their lives to keep society functioning. While bearing the brunt of the risks, however, essential workers were not compensated let alone protected in any way shape or form.
In the United States, there have been stories of essential workers being fired from their jobs after going into self-quarantine and workers being forced into unpaid leaves as companies go into cost-control mode. In Singapore, the recent increase in infection cases were linked to the cramped living conditions of migrant workers – where conditions make it near impossible to practice social distancing.
Despite all this, private firms have been lobbying hard to governments to reopen the economy despite no show of evidence pointing to the containment of the virus. Elon Musk, the CEO of Tesla, reopened the California Tesla factory earlier in May in defiance of lockdown measures in order to secure his stock performance based 780,000,000 USD payout.
As JFK once said, in a crisis, be aware of the danger – but recognize the opportunity. This pandemic may serve as the window of opportunity to bring about structural changes that we so desperately need.
Now is the time for big governments to step up. During times of crises, public goods and services must be provided en masse and private firms cannot be trusted to provide such commodities, as their utmost priority is to generate profit and social guidelines only exist to be complied with in the process.
Governments must use this opportunity to hold private firms through regulation. We must not allow firms to be bailed out as they were during the 2008 financial crisis; data shows that firms who received government bailouts have flourished post-crisis with taxpayers seeing no returns from their profits. Governments currently hold leverage over the energy and airline sectors – those who exacerbate climate change. Firms in such industries should only be bailed out under the condition they invest in alternative energy or ditched altogether in the case of oil companies as they do not have bright futures ahead of them anyways. Governments should provide relief to sectors that can perform post-COVID.
Social safety nets must also be put in place to protect those whom are most vulnerable. Labour laws such as guaranteed sick leave must be strengthened in the wake of this pandemic. This pandemic is likely not going to be the last as we are seeing a decrease in interval between viral outbreaks in recent decades. We must never again allow people to be put in situations where they have to choose between their life and livelihood.