Prepare for the worst-case scenario
Thursday April 10, 2020
Prime Minster Mahinda Rajapaksa, in his address to the nation, on Tuesday, stressed the need for everyone to remain manically focused on the country’s battle against the coronavirus pandemic, which, he said, should be considered the nation’s worst enemy. One cannot but agree with him, on this score. Nothing has ever rendered the whole world so helpless. About 1.5 million people have been afflicted with coronavirus, the world over, and the death toll therefrom exceeds 83,000. Only about 310,000 Covid-19 patients have so far recovered. New infections continue to be detected, at an alarming rate. About 190 Covid-19 infections have been detected, in this country and, out of them, seven have died.
We must be mindful of the economic fallout from the coronavirus crisis, while doing everything possible to beat the germ.
The Covid-19 pandemic, and the preventive measures that had to be adopted, frantically, to curb its spread, here, at the expense of the national economy, have aggravated the pecuniary woes of the public. Most people are struggling to keep the wolf from the door. Daily wage earners are the worst affected. Fixed income earners will also feel the pinch, shortly, because almost all shops, factories and other workplaces remain closed. The situation is bound to take a turn for the worse, within the next few weeks, unless the much-dreaded virus goes away, allowing the country to be opened up, again. It will be quite a while before the battered economy staggers to its feet. We will be lucky if there is no negative economic growth during the first quarter of the current year.
The International Labour Organisation (ILO) has made a gloomy prognosis; it says about two billion people are at the risk of sinking into poverty due to the Covid-19 crisis. More than 81% of the global workforce of 3.3 billion—or four out of five workers—have been affected by the full, or partial, workplace closures, due to the coronavirus pandemic, according to ILO. The Covid-19 crisis is expected to eliminate 6.7% working hours, around the world, in the second quarter of the current year, and this will amount to 195 million job losses globally, ILO Director General Guy Ryder has told the media.
The ILO statistics are chilling, to say the least. In Asia and the Pacific, the number of full-time workers, who are expected to lose employment, is as high as 125 million. In the US, the unemployment rate has jumped to 4.4% from a 50-year low of 3.5%, owing to the Covid-19 crisis, according to US media. The ILO predicts an 8.1% reduction in employment (or a loss of 5 million full-time jobs) in Arab countries, and a 7.8% reduction in employment (or a loss 12 million full-time jobs) in Europe.
Unemployment leads to social unrest and other such problems as well as politico-social upheavals. Only a truly global effort will help overcome this unprecedented socio-economic challenge of gargantuan proportions, according to ILO. Easier said than done. When the viral crisis is over, the world will revert to the pre-Covid-19 state, and a concerted effort to salvage the global economy will be conspicuous by its absence.
The European Union (EU) member States are already at loggerheads over the proposed rescue plan to bail out the hard-hit ones among them. The Netherlands has opposed the plan as it is not agreeable to the bailout conditions, according to a report we publish, today. Talks among the EU finance ministers lasted for about 16 hours, the other day, but ended inconclusively, compelling the Eurogroup to be adjourned. This being the experience of the close-knit EU, with common interests and a shared future, how difficult it would be to make other nations, which are at outs with one another, join forces to rescue the global economy is not difficult to imagine.
Countries, like Sri Lanka, must prepare for the worst-case scenario.
Thursday April 10, 2020
Prime Minster Mahinda Rajapaksa, in his address to the nation, on Tuesday, stressed the need for everyone to remain manically focused on the country’s battle against the coronavirus pandemic, which, he said, should be considered the nation’s worst enemy. One cannot but agree with him, on this score. Nothing has ever rendered the whole world so helpless. About 1.5 million people have been afflicted with coronavirus, the world over, and the death toll therefrom exceeds 83,000. Only about 310,000 Covid-19 patients have so far recovered. New infections continue to be detected, at an alarming rate. About 190 Covid-19 infections have been detected, in this country and, out of them, seven have died.
We must be mindful of the economic fallout from the coronavirus crisis, while doing everything possible to beat the germ.
The Covid-19 pandemic, and the preventive measures that had to be adopted, frantically, to curb its spread, here, at the expense of the national economy, have aggravated the pecuniary woes of the public. Most people are struggling to keep the wolf from the door. Daily wage earners are the worst affected. Fixed income earners will also feel the pinch, shortly, because almost all shops, factories and other workplaces remain closed. The situation is bound to take a turn for the worse, within the next few weeks, unless the much-dreaded virus goes away, allowing the country to be opened up, again. It will be quite a while before the battered economy staggers to its feet. We will be lucky if there is no negative economic growth during the first quarter of the current year.
The International Labour Organisation (ILO) has made a gloomy prognosis; it says about two billion people are at the risk of sinking into poverty due to the Covid-19 crisis. More than 81% of the global workforce of 3.3 billion—or four out of five workers—have been affected by the full, or partial, workplace closures, due to the coronavirus pandemic, according to ILO. The Covid-19 crisis is expected to eliminate 6.7% working hours, around the world, in the second quarter of the current year, and this will amount to 195 million job losses globally, ILO Director General Guy Ryder has told the media.
The ILO statistics are chilling, to say the least. In Asia and the Pacific, the number of full-time workers, who are expected to lose employment, is as high as 125 million. In the US, the unemployment rate has jumped to 4.4% from a 50-year low of 3.5%, owing to the Covid-19 crisis, according to US media. The ILO predicts an 8.1% reduction in employment (or a loss of 5 million full-time jobs) in Arab countries, and a 7.8% reduction in employment (or a loss 12 million full-time jobs) in Europe.
Unemployment leads to social unrest and other such problems as well as politico-social upheavals. Only a truly global effort will help overcome this unprecedented socio-economic challenge of gargantuan proportions, according to ILO. Easier said than done. When the viral crisis is over, the world will revert to the pre-Covid-19 state, and a concerted effort to salvage the global economy will be conspicuous by its absence.
The European Union (EU) member States are already at loggerheads over the proposed rescue plan to bail out the hard-hit ones among them. The Netherlands has opposed the plan as it is not agreeable to the bailout conditions, according to a report we publish, today. Talks among the EU finance ministers lasted for about 16 hours, the other day, but ended inconclusively, compelling the Eurogroup to be adjourned. This being the experience of the close-knit EU, with common interests and a shared future, how difficult it would be to make other nations, which are at outs with one another, join forces to rescue the global economy is not difficult to imagine.
Countries, like Sri Lanka, must prepare for the worst-case scenario.
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