The Coronavirus Storm
KAMPALA – The Coronavirus like a storm, has wrecked economies worldwide its wake. The virus is disrupting the world. It has led to shut down of businesses and laying off people from jobs worldwide. In many countries most people are at home. They have been told to stay home in an attempt to stop the spread of the virus as it brings death with it. It is an unprecedented storm. It has been killing people and businesses worldwide, indeed a pandemic. It is said to be the single most important factor in the world since World War II. It required lockdown of countries to control the spread. Literally most economic activities stopped. What happens when the lockdown ends? Important to note, however, that the virus is not cured! Not until the cure or vaccine is found shall we be safe. The lockdown was just intended to slow it down not to kill it. As a virus it will finally affect most people in the world.
How do organizations resume or restart their activities? Life will never be the same again for many businesses anywhere in the world, Uganda inclusive. The Coronavirus was a coffin, for others and a nail in the coffin for many organizations. But of course, there are many that will live on. They will live on but with difficulty. Government must lead the country from the lockdown to near normal life in the short run and up and running again in the long run. We also have to learn to live with the virus and adjust our lives accordingly. But all economies are shattered. To revive the economy, government must give a stimulus to kick start business, but what stimulus? What do individual organization do to restart business?
In this treatise, I present my personal view on what the problem is, how it is being responded too globally briefly and more emphasis on Uganda. I defined the problem as I perceive it and I provide solutions based on what my own understanding of issues and observation from known theories or practice. It will be presented it in five (5) parts. In my view, the lockdown should be eased, not completely removed. There should be immediate measures. I see the coronavirus as an opportunity to rethink how the Ugandan economy works in the light of changing global power shifts and emerging technologies. Current thinking and policies are obsolete! If we continue with them we will end up with the same problem. A poor country. The lockdown must be eased to prevent social unrest but must be systematic, certain activities should be allowed in a sequence. Otherwise we will see numerous dead bodies around the country.
The Global Challenge and Response
Some countries have already started thinking of what they will do post-Covid-19 first lockdown. It is possible there may be another lockdown. Others have already initiated actions to revive their economies. The United States announced a stimulus package of US$2.2 trillion, Germany approved US$814 billion. In fact, the stimulus is already being implemented through giving people unemployment benefits and food. Others are on the fence waiting for it to end to do something. Many countries are wondering what to do since they are broke! These are mainly developing countries who have a unique problem. It is a unique problem because they are not only poor but cannot borrow easily or print money because of their agreements with the World Bank/IMF. Most times they wait for donors to give direction. In these circumstances the United Nations will seek funds from wealthy member countries to support the medical component of the Coronavirus pandemic for such countries. The World Health Organization (WHO) is already doing that. Some days ago, the US withdrew its funding citing mismanagement of the pandemic. This would deny assistance to poor countries. But how will developing countries manage the economic restoration.
Economic support for developing countries
For the economic support developing countries have to make agreements with the World Bank/IMF. African countries, like all other developing countries, may therefore not have a leeway in fixing their economic recovery programmes. They have to seek support from IMF and World Bank. But is that so? Yes, they have to abide by the guidance provided by those countries that control world affairs. These countries also automatically control the multi-lateral, institutions. How will Uganda fair? IMF has approved US $109 million for Rwanda. Kenya received US $50 million, Nigeria has received US $3.4 billion. IMF has “secured” US $1 trillion to lend to such countries. This is the difference maker. Other governments make available internally, poor countries borrow externally!
In recent years even before the virus, the world has changed much. Asia, especially China, became a key player in world affairs. This arose from the phenomenal economic growth China attained in the last 30 years. The world continues to change and the Coronavirus is adding to the change. Who is calling the shots at the global scene and who is driving the change? The United States has been the global leader calling the shots. This appears to be changing given Chinas’ rise. The US has had an alliance with “Western” countries that have believed in free market economics. The key players have been the US, Canada, UK, Germany, France, Italy and Japan from Asia. They control the World Bank and the United Nations. Between them they have about 40% of the world’s GDP! Multi-Lateral institutions and developed countries have been supporting developing countries in their development agenda through grants and loans. In the post “Coronavirus effect” changes, they are expected to play a key role. I am reluctant to use the word “post” became it is not over yet. Governments are coming out with different policies to manage the Coronavirus effect environment. Developing countries await donations and loans to support their economic revival needs. But who will support them? Let’s watch this unfold. But what will Uganda do?
The Key Questions
Despite what is going on in terms of economic stimulus efforts, before the lockdown ends everywhere in the world, there are questions every country must ask, whether rich or poor, developed or underdeveloped. What do we do to stop people dying from the Coronavirus? This is a medical issue that requires doctors, researchers, facilities, medicine and money! The other question is how do we ensure that economic activities are restored? More importantly, how do we ensure that the country is able to adapt to these changing circumstances of the coronavirus effect, revive the economy and sustain its economic performance? May be also how to take advantage of the changes to improve a country’s economic performance. Other important questions are, how do we ensure this does not re-occur in future and how do we manage future occurrences when and if they do. It should also involve questions of whether our pre-coronavirus business/economic model was giving the result we wanted. If not, can we change it? Like other countries Uganda has to raise and answer the two questions, the medical one and the economic one.
In an article on the Coronavirus pandemic, I attempted to explore how to deal with the Coronavirus medical problem. Solutions continue to evolve as scientists around the world research into the problem. It is not yet settled. It is believed that a vaccine will be the solution. The Uganda government keeps on making recommendations to Uganda on what to do. Social distancing and washing hands appear key in preventing the spread. No known cure yet. But how do you ensure social distancing in schools, buses and markets? How do you wash hands when there is no water? A one trillion-shilling questions. No good answers. The quest for answers continues.
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The writer, Prof. Waswa Balunywa, is the Principal of Makerere University Business School
