Preparing for a ‘normal world’

The COVID-19 pandemic is impacting the daily decisions of governments, businesses and families all over the world. The biggest issue has been described as balancing living vs. livelihood or public health vs. economics. Governments must now plan the transition toward lifting quarantine restrictions and advancing into the “new normal” life.

The biggest task for decision makers – business, political, education – is to try to arrive at a framework for this new normal. I doubt if anyone, except himself and his minions, believe Trump when he recently said the new normal is the life we had three months ago.

While the near term debate is how countries will balance the physical health of the people in its community and the economic necessity to earn a living, there are those who say that we should accept the consequences of deaths rather than let the economy slide into a Great Depression. There are others who warn that opening the economy too soon will just lead to a “second wave “ of Covid-19 cases and deaths which will require a second lockdown. Perhaps the most cynical suggestion I have read is from persons who say that we should go ahead with lifting the quarantine and letting people experience the horrors of a second surge of COVID-19 cases and deaths. This may be the best way to convince people to accept that there is a need to change lifestyles. This means that wearing a mask, social distancing and limiting going out of the home is what “new normal” means.

The next major issue is how to revive the world economy. For many countries, the contraction in the economy is the worst in recent history. In the Philippines, the economic contraction is the worst since 22 years ago. Every country is planning massive economic stimulus programs. The question however is how the consumer will react to these stimulus programs. In the absence of a vaccine, the threat of being infected will probably limit people’s behavior. For example, travel and tourism industry will probably not be completely revived unless the dangers of a COVID-19 pandemic will be completely eliminated by the discovery of a vaccine.

In most countries in the world, the goals of an economic stimulus package are to prevent an economic collapse and avert a depression; or, at best, to stimulate enough economic activities to have minimal growth. Again, the goal for these programs is to have an economy hold on until a vaccine is discovered.

Beyond all these immediate and economic issues, the other major area of concern is the effect of this pandemic on global geopolitics. On the surface, it seems that the existing geopolitical framework has hardly changed. The US-China trade tensions have not lessened. Europe is still dealing with the aftermath of the Brexit decision. But the most important geopolitical issue that will result from this pandemic is the effect on China. This is especially critical for countries like the Philippines who have politically aligned with China and whose economy is increasingly dependent on China.

There are questions in two main areas – geopolitical and economic. The geopolitical question is whether the COVID-19 crisis will strengthen or destabilize the Communist Party’s hold over the Chinese people; and, even within the Chinese Communist Party, what impact would it have on the popularity of President and Party Secretary General Xi Jinping. The CCP’s leadership had already been weakened by the massive protests in Hong Kong. The overwhelming victory of a pro-independence party in Taiwan was another big setback for the Communist Party. Taiwan’s global prestige has also been enhanced by the fact that its handling of the pandemic crisis has been acknowledged as the model for the world.

From a geopolitical perspective, the consolidation of power under Xi (similar to Mao) and his resorting to nationalism to bring about national unity may have empowered the Chinese president, but it has also concentrated responsibility for failures in one man.

There are also disturbing economic signs that the economic downturn will be the worst in its history. There are also reports that several countries are moving to lessen their global supply chain dependence on China. Japan is providing financial incentives to move out and there are reports almost 1,000 Japanese are planning to relocate to other countries like India and Vietnam.

The most important question is how long before an effective vaccine will finally be discovered.

Management Association of the Philippines statement on the closure of ABS-CBN

May 6, 2020

It’s a sad day for media freedom and the thousands of people and their families who will be adversely affected by the closure of ABS-CBN.

We in the Management Association of the Philippines (MAP) had fervently hoped that this day would never come as we, together with other business organizations, strongly urged Congress to consider in a timely and judicious manner the renewal of ABS-CBN’s broadcasting franchise.

We reiterate in the strongest possible terms our plea for Congress to act swiftly, especially at this time when we all must act as one nation for the sake of our country. – FRANCISCO ED. LIM, MAP President

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