The realisation is dawning on more and more people that the coronavirus crisis is not going to be a drawn-out weekend with a critical stock of toilet paper. Nor it is just an early summer break for the kids. We are looking at something that is going to stretch for months and that is going to change the economic game in ways as fundamental as a world war might have the last century.
As families and businesses realise that the steps ahead are steeper than anything we’ve faced together before, Edward Scicluna’s reassurance that we can settle March’s VAT returns in April is looking timid.
The government cannot continue this dance of seven veils hinting at a grand plan our unaccustomed ears are being protected from. The prime minister keeps saying he has a strategy. If he does, and if it’s anywhere near the scale we need it to be, at the rate he is drip feeding it we’ll get to the substance of it well after coronavirus becomes a memory. That’s just not good enough.
We need to hear from the government how we’re going to survive the immediate crisis. But beyond that we need to understand how we’re going to adept to a new reality that is likely to be with us for some time. When we can all go to a walk in the park and eat in the newly awarded Michelin guide restaurants again we will have a new economy. We have to have a new economy because the rest of the world will and if we try to ignore that we will sink with a forgotten past. To walk through this gauntlet, emerge bruised but standing on the other side with the energy we will need to build a new future we need an injection of collective and shared confidence. And those daily press conferences at the prime minister’s office have not started giving us any of that yet.
How do we survive the next weeks and months? We are being repeatedly warned that the government cannot carry this burden alone. That may as well be. But some dogmas need to go out of the window if we are to emerge from this standing up. The government has to prioritise the survival of the country over its year-end balance. If need be we increase our borrowing and increase our spending. And if need be we rethink our revenue strategy in the medium term.
Already in these very initial days of the present crisis several business activities have ground to a halt. Others will follow. The government needs to use tools available to it like proper tax relief, suspension of utility payments, guarantees issued to banks to cover deferments of repayment of principals for business loans, direct subsidies on the repayment of interest and direct subsidies on the payment of salaries to employees sent home because of a business slow down or shut down are such tools.
These provisions should work for businesses of any size – large and small – and individual self-employed people who are just as much contributors to the economic well-being of the country as people in employment or employers large and small.
People staying home because of mandatory or recommended quarantine should be paid in full directly from the government for their period of quarantine. Main income earners for families whose employment (or self-employment) has stopped because of the prevailing situation should have most of their salary paid as a subsidy by the government with a minimum wage payment guaranteed to everyone and with a ratio of their full salary guaranteed up to a reasonable cap. The ratio for second and other income earners in the same family can be smaller but some subsidy must still be guaranteed.
These measures address the immediate hardship for families whose income stops because of the economic arrest we are living through. It also helps ensure some continuity in consumption, slowing down the chain reaction leading to a collapse it can become near impossible to recover from.
By definition these measures are unsustainable beyond the immediate term. Since this problem will go beyond the next few weeks we need measures that can help us adapt to this reality.
We have surplus hotel rooms and idle hotel staff. And we have medical staff working round the clock taking risks of carrying a contagious disease home to their families. We can match those two problems. The government should buy hotel rooms to accommodate health staff from the senior doctors and hospital managers to the nurses, health assistants, lab technicians, cleaners, ambulance drivers and so on. Idle taxis, chauffer driven cars, coaches and other tourism industry paraphernalia should also be mobilised in this battle a bit like pleasure boats in Dunkirk.
We have empty restaurants, expert kitchen staff and desperate owners. And we have a large population of elderly people or asthmatics or families with young children or other vulnerable people stuck at home quite likely for a long stretch of time. These two needs must also be matched. Again, the transportation infrastructure of our leisure industry should be commandeered to distribute healthy food regularly to quarantined houses.
Our educators have been very quick to send their students work at home over email. In some cases, the effort has been admirable. Now it needs to be upgraded and supported centrally. We need to ramp up our remote learning and e-lecturing programs to go beyond the present stop gap and make something out of this that will last beyond the present crisis.
In the meantime, anyone losing their job in the present crisis needs to be given the resources to use this time at home to learn new skills as the skills they used a week or two ago may be less than complete when the crisis is over. This will need to be linked to the long-term measures for economic re-invention mentioned later in this article.
People need help and support while they are stuck at home in fear of the present and overwhelmed by the unknowability of the future. Robert Abela is no psychologist and Chris Fearne, though an eminently reassuring health minister has the bedside manner of an executioner. People need to get psychological services in their homes and in the present environment that will need to be given remotely over communications technologies. The newly unemployed, the business owners who can no longer provide for their families without help, the lonely unemployed, the people in fear of their own symptoms, cannot be left to their own fate.
All elderly people who need it, must be given help to get a tablet set up for video calls. And those without anyone to call, need to get calls from a newly organised support infrastructure in the community: their local food and medicines delivery services organised through local councils, volunteer street leaders, family members and neighbours.
In other words, we will need something like the World War II home guard organised to make sure no one is left under the metaphorical rubble of this silent bombardment.
National TV needs to step up to the occasion. Wipe away all that advertising sponging junk during the day and provide a proper community service to people stuck at home. Create teaching hours for children, address the need of people to know what’s happening in their country without being able to step outside their home to see for themselves, provide for the practical, psychological, religious, cultural and physical needs of people, particularly the elderly and children. Re-invent physical exercise without the benefit of the great outdoors. Provide guidance on nutrition in times of isolation. Make daytime the national service we need it to be.
In the meantime, sit down to think of the economy we will need to have when this is over. We are not likely to have the resources to find a vaccine for coronavirus and in any case someone else is looking for that elsewhere. But no one is thinking about what Malta’s economy can look like in the time after coronavirus.
Many of our entrepreneurs, academics, bankers, civil servants, social partners and civil society leaders are rather under-employed right now, if you don’t count worrying as a job. They need to be mobilised on online chats to come up with new ideas for economic initiative.
When we get those plans cracked up we can start working on funding plans so that we can hit the ground running. There will need to be co-funding initiatives including directly targeted government expenditure because the target industries of December 2019 will not be the same as the target industries of December 2020.
In the meantime, the government must make sure the banks are kept in relatively good health. We will need them when we open our windows again.
The government must use this opportunity for some macro adjustments. Reverse stupid policies. Nationalise the privatised hospitals. There is no better time to re-establish the consensus that the core health infrastructure of a community with a public conscience and a sense of social solidarity must be in public hands and must have no consideration apart from a public service guiding its decisions.
While at it, nationalise the energy sector. The Electrogas deal is rotten. In times of economic hardship, we could look forward to some relief as global energy prices plummet. And yet the corrupt energy deals we are stuck with take out of our pockets money we are not even earning.
The government will need to kick-start economic activity and public expenditure must be one of the elements to help with that. Let us think beyond the tarmac box of wider, bigger roads. Let us look instead at areas of investment that are crying out for a proper expenditure program. Let us look at ways of revolutionising transportation, the generation and conservation of renewable energy, the management and disposal of waste. And let us look again at the state of readiness of our health sector. Perhaps we need another, smaller hospital. Perhaps we need to better equip Gozo for our health coverage. Let us do away with dogmas and use the time at home to think things afresh.
In the meantime, public procurement can all be done electronically. So, we can use this time working on procurement initiatives so that this public investment program can start in earnest once the crisis is over.
Of course, our thinking about a new economy needs to look at our tax regime which is unlikely to survive the international pressures enforced by governments running other economies in hardship. Thinking alternatives for that will keep us busy for a while.
As this goes on this community needs a confidence boost. More of us now realise we have less reason to fear the biological virus than we have to fear the economic storm that it is dragging in its wake. One way or another, and not without losses along the way, we can see that there is another side of the pandemic that we will emerge from. That other side will be free of contagion from the virus. But what will our lives look like then?
Our government is managing to instil reasonable confidence in the community in the battle against the disease. Confidence in the management of our economy is a different game altogether.
Initiatives to support our economic actors are glaringly poor. Communication is stilted, smug, partisan, patronising and completely lacking in empathy. If there is any thinking about a longer-term play, it is covered in opacity, innuendo and baseless hope. We are supposed to gain confidence because the prime minister winks at us and promises there’s something in his big bag of gifts.
Engagement with social partners is one-sided and unproductive. It was shocking to see the chamber of SMEs telling the government that as far as they could work out the vaunted “package” announced by Edward Scicluna with the promise of salvation was useless to them. Clearly the government did not discuss the “package” with those it was meant to help. It is impossible to get these ‘partners’ to agree ‘we’re in this together’ if the government retains the attitude of knowing what’s best for everyone else.
But even as I argue for better engagement with social partners, I would add that there’s a weakness in our community framework. Traditional industries like tourism, retail, construction and manufacture are organised with long-standing lobbies that have access to media and means of influencing public policy. But they’re not the whole economy.
They may be insulted by the comparison but these industries are not unlike miners and shipbuilders that were organised in labour unions that were proportionately much stronger and much more influential on public policy than their real contribution to economic well-being compared with other less organised labour sectors should have meant.
Thousands of people out here work in technology, in culture, in education, in sports, in professions, including newer professions like therapy and psychology. Thousands of others take care of our countryside although they are not organised in traditional unions or cooperatives. Thousands prop up our every-day lives with their services, their arts and their products but no chamber, no union, no familiar spokesperson speaks for them.
They are as much our future as our hoteliers, retailers and property developers. Perhaps more so if our newly invented economy is going to be greener, more pliant, more sustainable, less office-intensive, less mobility-dependant and less vulnerable than the one we have now. Or we had two weeks ago.
A fire is on. We’ll either be consumed by it or we’re reborn from it.