Let me restate my point of view that genuine recovery depends on a few key things: 1. Managing the Survival Phase; 2. Restoring Closed Businesses; 3. Recoup and Retrieval for Businesses as they open; 4. A National Recovery Strategy; 5. Immediate Action of Economic Restructuring, 6. Building a New Economy post Covid.
An important issue, though, is what is the mix of public/private participation, the nature and extent of partnership and what will it mean for the emerging, new structure of ownership of the economy going forward post Covid?
So it is not just the restructuring of the economy, swift diversification and building a new economy side by side with the retrievable elements of the old one.
It is also about the structure of ownership in the post-crisis, post-Covid economy, the effective management of the equity and participation questions, and the reinforcement of big government.
The biggest problem for recovery plans now for the post-Covid period is that big government will be central to it; and that for developing countries, the multilateral institutions are going to finance emergency measures targeted to control Covid spread, to manage hunger, to mitigate loss of income and to support businesses to return to normalcy.
Striving to return to normalcy alone has its dangers. Not only because the old economy on its own cannot propel recovery but also because power is likely to become concentrated among the strongest survivors.
Both the multi-laterals and the banking sector are going to finance strategies for recovery through debt. The debt accumulation required to address the current crisis, and which will inevitably be a worldwide phenomenon, will eventually present formidable challenges for the global financial system. We will have to wait to see.
Meanwhile, the government has already emerged as the central player in the Covid crisis in every country. It could not be otherwise, when what is at issue is a public health crisis which has triggered an economic catastrophe and a colossal financial headache to address economic fallout.
However, it is a fact that, in a country such as Trinidad and Tobago, the Government has become bigger and more central and in the circumstances has seized more authority to exercise more power in a range of spheres of human life.
But a bigger, more powerful government means a smaller or more diminished everything else. And a central government, supported by multi-lateral financial institutions which have a vested interest in the success of such governments, presents the perfect opportunity for international financial institutions, local banking corporations, the leading private sector players and a big central government to align their interest and coalesce a strong oligarchy in whose hands the success or failure of a country such as Trinidad and Tobago would rest.
One might argue that one needs resources and capacity to get anything done and that in an emergency situation, this is more necessary than ever. And there is solidity in that argument, because without resources and capacity, the less well-endowed will be quickly exposed to danger, the vulnerable would become helpless.
It is not just that an oligarchy may become entrenched because of an economic emergency, but that this entrenched oligarchy, fully and comprehensively reinforced and buttressed by international money, a banking cartel in which government itself is a major owner of banks and partisan political alignment because of sheer self-interest, will rule the roost as time passes and as they become more formidable and interdependent.
In such a scenario, the rationale of resources and capacity used to justify the strengthening of the oligarchy, in order to serve the public good—salvage businesses, save jobs and income, establish the basis for survival and then recovery, and eventually return to as much normalcy as possible, will become lost, as the oligarchy digs its heels in, to share a smaller pie, in a shrunken economy, locally and globally.
Meanwhile, more than likely, the inequality and inequity gaps in T&T will widen with a shrinking middle class, a working poor class with say, 20 per cent of the pre-Covid middle class falling into it, with a fair percentage of collapsed small and medium businesses which cannot retrieve their situation; with large numbers of unemployed which the labour market will not be able to absorb, and from which pool, the stronger businesses can pick the best employees from a larger reservoir of skills at reduced cost.
This might well be our local, mini version, of what might happen globally.
Such a scenario, may well be the inevitable result of trying to restore the economy to the normalcy that was, with it’s over dependence on the rents from energy, its over dependence on imports for food and even for those things that we manufacture, and its four and one half consecutive years or fourteen consecutive quarters of economic decline before Covid-19, in which businesses were already retrenching, cutting costs and investing outside to survive and earn foreign exchange.
We will not be able to escape such a scenario as described above unless we are able to introduce early inventions for restructuring away from fossil fuel dependence and unless we are able to design and build a brand new economy by facilitating investment, entrepreneurship and innovation.
There will be tensions as we go forward after Covid: oligarchy or greater equality; continued consumer capitalism or sustainable development; responsiveness to climate change or ignore environmental issues continue as we have been going or rethink our value system and way of proceeding; meaningful democracy or stronger authoritarian control.
These tensions will weigh upon us and we will have to make choices in Trinidad and Tobago. Other countries and the rest of the world will have to do the same.