The COVID-19 medical crisis is far from over. And neither, by a long shot, are its dire economic consequences. Political leaders where coronavirus numbers are on the downward slope of the curve need to work closely with both medical experts and the business community to help their countries tiptoe out of shutdown and start the long walk back to normality, whatever that might look like.
Luckily, we in Malta have been spared the worrying incidents that have been happening in the US. Our business people and workers have not been taking to the streets in protest in a bid to force political leaders to open up the economy by declaring an end to the lockdown, which has sapped all the energy from the marketplace.
Of course, the pain of workers who have lost their jobs or had their wages reduced because of the pandemic is palpable. Society, after all, is mostly made up of individuals who have to work to earn a living.
The local business community has so far conducted itself prudently by going along with the advice of medical experts who have been given precedence due to the need to control the spread of disease. Chamber of Commerce president David Xuereb was right when he sounded a cautious note: “When, and only when, the green light is given from a national medical standpoint, should we start looking at easing the lockdown.”
But while the success of the management of this crisis on a medical level is evident, there is now growing pressure to ensure that the same success is achieved in limiting the damaging economic effects of the infection-prevention measures.
A survey conducted by the chamber and published by Times of Malta reflects the sombre mood of the business community. Only a quarter of businesses surveyed believe their sales will in a year’s time have recovered to the same level they were at before the coronavirus outbreak.
This belief seems to go against the predictions made by rating agencies and the IMF, which all predicted that the Maltese economy would start growing significantly again in 2021.
The troubling reality that the medical experts, political leaders and businesses are facing is that no one knows how the pandemic will evolve in the coming months. The economists in the room predict a range of different scenarios, from a V-shaped recovery to W-shaped and L-shaped, also depending on which pandemic modelling they happen to be paying attention to.
As certain categories of local shops open their doors to customers, when bars, cafés and restaurants start serving food and drink again at socially distanced tables, and even when passenger planes tentatively take to the skies again, the crucial factor that will determine when the wheels of the economy start to turn again is the return of consumer confidence about how safe it is to leave the house.
The chamber also appealed to the government to start giving some clarity and guidance to aid business planning.
It is not entirely clear what the chamber expects. No government, even those with ample financial resources, can buffer the impact of the pandemic on the economy to the extent that business people would expect.
The safety nets provided by the government to save thousands of workers from losing their jobs now need to be strengthened by private investment to ensure that the economy is prepared for the next downturn whenever it comes.