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How Coronanomics will shock us to new realities and rebirth

By XN Iraki | March 22nd 2020 at 12:00:00 GMT +0300

The empty grading hall in Naivasha based Maridadi flower farm which has sent home 150 workers as it is no longer exporting their roses to EU. [Antony Gitonga/Standard]

It is amazing that the world is on a war footing over a virus, small and invisible.

We build nuclear bombs, buy guns and build walls around our homes, but we seem defenceless for now against an invisible virus. This virus seems to have finally humbled man.

The schools are closed, buses no longer wake us up in the morning, we now have time to listen to birds and their music.

Telecommuting is no longer a textbook term. What makes this war more serious is that no one seems to have seen it coming with this ferociousness. No one was fully prepared for it.

Bill Gates warned of such a pandemic in 2015, but we prefer to ignore sages. We prefer to listen to politicians more. Did you ever prepare for such a scenario in your workplace or home?

Covid 19 Time Series


Beyond grief and disruption of our lives, we are uncertain how long the virus will ravage nations and devastate economies espoused by unprecedented fall in stock prices, job losses and loss of credibility in some governments. The effects of the virus on the global economies have been discussed as the reality slowly sinks.

To make matters worse, some countries’ economies were already under strain even before Coronavirus. Think of Britain and Brexit or Kenya and the locusts and terrorism.

Covid-19 will compete for attention and resource with other ailments like HIV/AIDS. The solution to Coronavirus is a double-edged sword.

By closing the borders and locking citizens in their localities, the countries will slow down the spread of the virus. This time prevention is better than cure is real, not just a cliché. But lockdown slows down the economy as lots of economic activities stall. The most affected sector is services which require face to face interaction and increases the risk of Covid-19 infection.

Reduced economic activity leads to joblessness and if not arrested, to social unrest and insecurity.

This double-edged sword is at the heart of Coronanomics. 

It will tax the ingenuity of our leaders. Managing fear and panic is the other pillar of Coronanomics. We don’t want to see citizens fighting for food or water.Other tenets of Coronanomics include the sudden importance of the government. Paradoxically, the same government we rant against is the same one we are asking to do something about the virus.

From poor to developed countries, we are looking up to the government to save businesses and jobs. For once we now realise why it pays to elect the right people to government, you never know when they will be needed.

Coronavirus will expose the real governments from pretenders.

It will test the effectiveness of the governments in times of crisis. Some leaders are openly saying it’s the worst crisis since World War II.

Voters might ask their leaders what they did during this crisis. In whispers, where are all the leaders who made BBI rallies their home every weekend?

They can’t see the Coronavirus?

Or hear of it? Coronanomics by the time it runs its course will have other surprises and one that stands out will be the rise and rise of China.

By confronting and winning the war against Covid-19, China will claim new legitimacy for its political and economic system, so-called socialism with Chinese characteristics.

Add the fact that the same system has made it the world’s second-biggest economy. My recent visit to China made me feel it could already be the world’s biggest economy. Nations have come together in times of peace to form economic blocs like the EU or East African community. Covid 19 should bring them even closer.

Has East African community acted as a group? Can we apply economies of scale in fighting Covid-19?

We could add that the Health Ministry should be centralised as we fight this virus. Remember how centralised the military is and how it solves some of the greatest challenges?

The success of Chinese war on Coronavirus has a lot to do with its centralised system, hard to duplicate in Kenya where democracy and freedom flowers, so much that we might even demand we have the freedom to die the way we want.

Where do we go from here?

Coronavirus vaccine or cure will not be brought by medical scientists but by entrepreneurs as they compete on who gets the first drug or vaccine to the market. No wonder Americans want to buy a German firm on the verge of getting a vaccine. Competition is the other strand in Coronanomics. 

Immediate concern

Truth be told, while deaths, economic growth and joblessness might be the immediate concern of every citizen and political leaders, there are other unintended consequences closer home. All schools are now closed. Shall we test all the students for the virus once schools resume?

How will Coronavirus affect 100 per cent transition to secondary schools and overcrowding thereof?

Will day schools become popular in future with parents feeling they have more control over their children?

Will more students aspire to be medical doctors to help tame this virus and others that might come in future?

On a selfish note; Covid-19 presents researchers and academics beyond the medical field a golden opportunity to test their theories and hypothesis.

Behavioural economists can test how rational we can be in times of crisis. We can test the reality of e-commerce too.

Sociologists should study our behaviour when isolated or social distance. Think of young couples courting.

Are phone calls enough? Do we still need real people?

Managers can test the effectiveness of virtual management without hauling orders or walking about.

Psychologists and their cousin’s psychiatrist should predict how many of us shall be hospitalised in case of a lockdown. Political scientists can test the resilience of our political systems.

Mathematicians should model how the Coronavirus spreads.

Education experts can test the effectiveness of e-learning from kindergarten to university level. Demographers can check if there will be a spike in births nine months after lockdown.

Lawyers and criminologists can test if crooks fear death through Coronavirus. Will crime reduce or spike?

Will fear of death lead to more or less corruption? How about the effectiveness of new laws and regulations under a medical emergency?

Any borrowing from the state of emergency in Kenya (1952-1960)?

More sanguine, less travel but costly to tourism industry means less pollution. The weather patterns could change after Covid-19.

The ravages of Coronavirus are the price to pay for having not developed in 56 years after uhuru. We would have done away with slums and have clean running water in every home. 

We have not learnt how to use data to plan for the worst-case scenarios.

Think of how good data like that collected through Huduma number would be useful in identifying needy cases, even sending money to them through M-Pesa. Are we using phone numbers to track suspected Coronavirus carriers? Don’t we use that to track crooks?

What we can’t dispute is that by the time Coronanomics runs its course, our thinking on how the economy and the society in general operates will have been transformed.

We hope the virus will force us to think differently, and for better.

Never mind that the Covid-19 induced recession will take time to fizzle out and may cut the Gross Domestic Product (GDP) growth rate by as much as half.

Lower oil prices are a godsend, it will mitigate the effects of the economic slowdown but devastate the economies of oil-producing countries.

We might be lucky not to have yet become an oil-exporting country.

The price has fallen to less than Sh3,000 ($30) a barrel. 

Despite all its ravages, the virus could lead to a global renaissance more like the aftermath of World War II.

Covid-19 might be the shock Earthlings need to return to reason, to see a new reality and stop taking things for granted from what is economic growth to what it means to be alive.

Finally, we are eager to see the corona budget, the most appropriate name for the 2020/2021 budget.

-The writer is an associate professor at the University of Nairobi.

Coronavirus Coronavirus outbreak World Economy
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