TL;DR – Difficult times ahead. Businesses, consumers, employers and employees need to adapt to a new ‘normal’, and you know what, we might as well do the best we can while we are at it.
Counting down to the day when our bubble tea stores and McDonald’s outlets will restart their operations? Or the next time you can café hop with your bffs? Just like you, I am yearning for the first taste of freedom and ‘normal’. But, what do we need to achieve before we can go back to the ‘normal’ we were accustomed to?
Minister for Trade and Industry, Chan Chun Sing, recently talked about our Covid-19 situation in an interview with Bloomberg. When asked if he was confident that 1st June would be a go-ahead in terms of lifting the Circuit Breaker measures in Singapore? Minister Chan said, “I think it’s too early to say. We will continue to take calibrated measures as we have done over the entire period.” Largely, the three key indicators that the Singapore government is looking at, towards the end of the circuit breaker, are:
- Very low fatality rates
- Community spread brought down to a single digit, or “low teens”
- Situation in the migrant worker dormitories under control, with the migrant workers receiving good quality of care
The dire economic impact so far
Globally, the pandemic has triggered massive losses for corporations, and forced millions and millions of people out of work. The global financial impact of social-distancing measures on businesses and workers has been substantial.
Layoffs in the United States have risen to more than 26 million since mid-March, small businesses are struggling to stay afloat and corporate earnings are bleak.
A leading forecasting group said that it will take the UK economy three years to fully recover and has also warned that almost half of all consumer spending in 2020 is at risk of being delayed or lost completely.
In Singapore, the economy contracted by 2.2% in Q1 as the COVID-19 pandemic battered various sectors. Monetary Authority of Singapore (MAS) in its latest macroeconomic review said that Singapore will enter into a recession this year because of the blow from the COVID-19 pandemic. More job losses and depressed wages in the horizon. There is “significant uncertainty” over how long and intense the downturn will be. PM Lee Hsien Loong has meanwhile assured the nation that the Government will keep us afloat through the storm.
PM Lee on doing all they can to stabilise economy, preserve jobs, help companies stay in business
Despite the upheaval Covid-19 has caused, in most countries, experts have warned against going back to normal in a bid to restart our economy too early. Any premature attempts to go back to the ‘normal’ as we knew, could potentially trigger a second round of infections in the community. The easing of lockdown measures must be cautious and well-coordinated. Once there are signs of new infections, we go back to stricter social distancing measures. Not what cynical Singaporeans like to call ‘prata’ or flip-flopping by the way – it’s plain Science.
Exiting painful social-distancing measures
Debates of exit strategies have gained momentum as governments scrambled to work out how to move out of the painful lockdowns that have taken huge economic and psychological tolls. And no, it’s not just about bubble tea. It is impossible, however, at this point for governments to know for sure restrictions to ease, and at which point. This pandemic is like no other in recent decades, there are no absolutes for policymakers to rely on.
How have other countries approached this?
Hokkaido with its population of more than 5 million was the first area in Japan to face a major outbreak. In end February, with escalating number of infections, the governor declared a state of emergency. Schools were closed. Many businesses also shut, although they weren’t legally required to. By mid-March, the health crisis was showing signs of stabilisation but complaints from businesses were escalating and there was mounting pressure to ease up on the measures. When restrictions were lifted, Hokkaido residents went onto the streets in celebration of the end of ‘confinement’. This happiness was short-lived. Merely 26 days later, Hokkaido went back into lockdown mode. A second wave of infections has hit, harder.
In Germany, as the country attempts a cautious relaxation of its lockdown measures, the first signs that spread of the virus has once again picked up were evident. Germans were once again urged to stay at home amid fears of infection rates accelerating again.
In Spain, de-escalation is cautious through a four-step procedure as they completed more than 40 days of lockdown. The new lockdown conditions allow Spain’s under-14-year-olds to leave their homes for an hour each day. Restaurant owners are looking forward to a gradual reopening. Will Spain avert a second wave of infections? Only time will tell, and the world will learn from the lessons.
In Beijing, employers separate their employees, with some working from home if possible. Restaurants have to limit the number of customers. New measures are adopted in schools to minimise infections. And Chinese officials have reiterated that they will pull back and adjust the measures if signs of a second wave of infections appear.
While countries with financial strength have tried their best to hold off the financial impact on businesses, employers, workers and families, as the economic pain mounts, the challenge for most governments will be how to ease the lockdown measures and reopen economies. This move has to be well-calibrated. Until a vaccine is found, life will unlikely return to the ‘normal’ that we know in the near future. Normality, as we knew, will not return for a long time.
The pandemic has reshaped society and disrupted routines for citizens all over the world in mere months. With lives and livelihoods at stake, we need to find an effective exit strategy. The Government has to put in place the necessary to reopen the economy gradually and cautiously. They have the proven capability to bring us to economic recovery, having brought us through many economic downturns since 1965.
As PM Lee said in his May Day Message 2020, “The road to recovery will be long and hard. We should be under no illusion that all will be well, the moment the circuit breaker period ends or the number of infections comes down. But we are not a people who will shrink from struggle. It took us blood, sweat and tears to get here. In the fight for independence, at moments of crisis, the Pioneer Generation showed their grit and mettle. They decided to give it their all, to secure a future for themselves and their children. The Merdeka Generation worked with them, and took us from Third World to First. Because they braved the odds, and prevailed, we have today’s Singapore.”
COVID-19 is our generation’s challenge. Our people must understand why things need to be done differently, need to be receptive to new ways of doing things. Businesses, consumers, employers, employees need to adapt to a new ‘normal’, and you know what, we might as well do the best we can while we are at it. After all, it is not the strongest who will survive, but the ones who can best maneuver changes in the macro environment.