OPINION: Steps that can be taken immediately to remodel the economy

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The following is an opinion piece by Dhanraj Singh (Guyana Budget Policy Institute)

Over the last few months, I have written extensively on the state of Guyana’s economy vis-a-vis the election crisis, C19 pandemic, and economic mismanagement.

Our approach to these three issues was disastrous, to say the least from March 2, 2020. Luckily, we have managed to overcome one of them (the election crisis), but overcoming the other two is not going to be easy; and how we approach them matters greatly.

Shutting the economy down and waiting out the C19 pandemic is not a strategy; neither is continuing with business as usual, or pretending that the pandemic doesn’t exists. The top priority must be to protect lives. Saving the economy is the second priority. So, what exactly are states to do? How should they approach these matters? What options are there for lawmakers?

Lawmakers have a historic opportunity to soften the recession landing by remodelling the economy. Yes, remodelling is the C19 strategy, and many countries are adopting this approach. Remodelling simply means “changing the way we do things”. Starting with the public sector, government has the opportunity to bring public services online, digitise the government, increase efficiency, cut costs, create jobs, and keep the economic engine running, albeit at less than full throttle.

Here are some practical steps that the Government can embark on to immediately commence remodelling:

(1) Create a temporary retraining and jobs programme – people who have lost their jobs can be employed by the Government. To do what? To start digitising Government services. For example, all birth records should be digitized, so people can order birth certificates online. Digitise agencies’ data and profile for all Government entities to put them online, etc.

(2) Create a temporary cash assistance programme – to put money in the hands of people, especially poor family people who have lost their jobs and are without income to feed their families. Yes, give them the cash wherever it is possible and makes sense; if not, give them foodstuff. A greater economic impact is created by giving families the cash instead of goods and services during this period.

(3) Adopt strict C19 guidelines to allow Government services and private sector business, especially small grocery and other essential businesses, to stay open and operate at some (50% or 60%) capacity. This would ensure there is some amount of economic activities ongoing, and prevent the economy from coming to a grinding halt.

(4) The night economy – this is one of those policies we (Guyana and the Caribbean) have not been considering and making full use of. Economies can no longer operate on an 8-4 schedule. Density of economic activities and pedestrian traffic are not friends in this pandemic. We must make use of the night economy, and shift those activities that are better suited for those hours. This would lower the density and spread activities over the day, instead of cutting activities.

(5) Budget policy reorientation – use the national budget process to realign spending to not only deal with the immediate impact of C19, but to remodel the economy. Key sectors that ware starved of funding, such as agriculture, must see an injection of funding. But the ICT sector is also critical. Broadband for every household, reliable electricity for every household, adequate and reliable mobile connectivity for every community should be top priorities.

(6) Economic stimulus – yes, despite their limitations, fiscal and monetary stimulus are key to remodelling our economy during this pandemic, and creating a lasting foundation for long-term prosperity. With reduced pedestrian and commercial traffic, key infrastructure projects can be undertaken or moved up the priority ladder. Ensuring a sizable fund to help the private sector weather the storm is vital for economic survival and remodelling.

These are some smart policy ideas that are making their rounds in the international policy arena, both at the national and local economy levels. This is solid policy advice, and the extent to which we can adopt these and other creative policies to remodel our economy would determine how we emerge at the end of this crisis; and, more importantly, use the crisis to jolt us into the future.