We need to start foreseeing a world where globalisation is scaled back
COVID-19 will change the world forever. The spread of the disease means that any other mechanism than lockdown does not work effectively and with treatment and vaccine trials requiring the necessary time, we will live through this crisis for at least the next twelve months.
The richest country in the world, the US, and much of the EU is heavily affected and battling both from a health and economic perspective.
In the US, the unemployment numbers have gone from 200 000 claims to three million in week one and six million in week two.
Unemployment has surged in the US in the last 30 days at a greater level than what was seen in 2008 after the global financial crisis.
What can we do locally to ensure we protect the health of our population, but also protect the economic fallout of the lockdown?
Sixty to seventy percent of our population is employed by big business in South Africa.
Big business, as far as possible, needs to protect employee remuneration in an ethical and transparent manner.
This may mean foregoing the profit motive to simply break even, elimination of performance bonuses and the reduction of executive
remuneration.
The Unemployment Insurance Fund will need to utilise its reserves for the protection of employment incomes. It would need to prepare itself to distribute possibly 80% of its reserves in the mitigation of the Covid-19 crisis.
Its current model of working together with sector institutions rather than processing millions of claims is smart, but it also needs to create a mechanism for small businesses to apply and protect the wages of employees in the small business sector.
The relief funds for small businesses are welcomed, especially with the private sector coming on board to help; the Skukuma Fund which offers a R25 000 grant to qualifying sole proprietors is flexible enough to support micro enterprises.
The informal sector must be supported through a special Covid-19 grant, which has been punted by economists. These are our citizens who earn an income, but are not registered for UIF, do not receive a social grant and are not a registered enterprise for small business purposes.
Social grants and primarily the Child Support Grant must be increased given that many children are not accessing the school nutrition
programme.
The interest rate should be cut again. Interest rates are being used mainly as an inflation targeting mechanism – under lockdown there is very little demand for anything other than food or medicine and these alone are unlikely to drive inflation up.
A further interest rate cut will come as relief to business and debt payers.
Many of us keep wondering when life as we know it will return to normal.
Perhaps we are asking ourselves the wrong question.
Pandemics are life-altering events that can shift the way things are fundamentally.
We need to start foreseeing a world where air travel is massively reduced, where working from home is the new way of working and there is a shortened working week, where globalisation is scaled back in favour of domestic production and where we have a universal basic income as protection for our most vulnerable citizens.
We lost an opportunity after the global financial crisis to push for a more just and moral world.
We have collectively failed to address the crisis of climate change.
Perhaps Covid-19 will force us to make the decisions we have been avoiding for so many years.
Carrim is the chief executive of the National Youth Development Agency
