When we come out the other side of the corona virus
outbreak, as surely we will, it will have changed the way the global economy
operates forever.
As a result of the corona pandemic 245,916 people have been
infected, 88,465 have recovered and 10,048 have died.
The outbreak, which was first recorded in Wuhan in China has
swept across the global, with Europe surpassing China in deaths due to the
virus, last week.
Countries are taking increasingly harsher measure to check
the virus in its tracks – restricting movement of people and goods, shutting
down whole cities. As result people are
being encouraged to work from home, students too. Telecommunications and online
service providers are experiencing an upsurge in the uptake of their services.
This pandemic maybe the trigger to tip Africa into using less cash and
electronic money, reconfiguring our economies for good.
"After the second world war with Europe burnt to the ground, the US assumed dominance of the world economy because their industrial capacity was largely untouched and only needed to be rejigged to producing for civilian use...
China last week announcing that they had not got no new
infections in Wuhan, the early epicenter of the outbreak, suggests they may get
back to work just as the western economies are shutting down their economies.
Already the factory of the world, we can expect China will
scale up its capacity to produce to meet the world’s post Corona needs. Not
China alone because South Korea, Taiwan and Japan are making significant
progress in containing or rolling back the pandemic and they too will be ready
to roll in a few.
The move towards the fourth industrial revolution in western
economies will be sealed with this event. While the trend towards flexible
hours was gathering momentum, it will be difficult to reverse the current
practice especially as it is cost effective for both employers and employees.
This is interesting because it’s just like after the second world war, when people moved off the farm and into industry. As a result agriculture became mechanized, capital intensive and more productive. It needed to be, to feed the huge urban concentrations that emerged...
This time around as day time populations move away from the
commercial business districts to the suburbs, one can expect a reconfiguring of
commercial properties away from office to residential space.
Interestingly, Domino’s the giant pizza delivery chain the
US is looking to hire an additional 10,000 delivery workers as people are going
out less. Will we see in the future, staying in more as all goods and services
can be delivered to hem – even interpersonal relationships?
Countries like Uganda, already struggling to get into the
industrial revolution will buffeted massively by these new changes and may find
themselves falling back rather than making progress in a post-corona world.
The reinstatement of borders is hampering trade, it is
likely that the interest groups that will benefit from a return to economic
nationalism will resist any attempts to throw borders open again. While this
will benefit a powerful minority, while reversing the hopes of the majority of
small economic actors for who the free trade across borders has thrown up
numerous opportunities.
Keeping borders closed will also make industry nonviable,
cementing a reliance on goods importation.
We will also be the poorer from the restrictions on labour
movement. We get a lot of experts coming in from all over the world to fill
gaps in our systems. Their inability to come here, because they can’t leave
home or because we will impose restrictions on their entering the country,
which is our right under the circumstances, means necessary technology
transfers will not happen or at least not as smoothly as if they were here.
Relatedly the thousands we send out as immigrant workers
will very well find nowhere to go. This will be a double loss because we will
miss their remittances and they may very well become a nuisance here if they
fail to find work.
One too can expect that development aid and foreign direct investment
(FDI) flows will collapse in coming weeks, making it impossible for ongoing
projects to continue.
This may be the silver lining that comes out of this whole
crisis. That starved of foreign funds we are going to have to exercise our
minds on how to mobilise local resources. While the economy is going to be
depressed for a while and attempts to widen the tax base will not be met with
open arms but clenched fists, the urgency of this will be more clear now.
"With enforced travel bans to our favourite foreign hospitals, the urgency of shifting resources into the health care system will become very evident now. The fat cats who fly out on tax payers’ money to have their niggling pains checked out will have to make do with our local health system....
We don’t know the half of what will happen to the economy
after the dust settles on the corona virus pandemic. We can be sure things will
not be the same again.
