Governments grappling with likely conundrum over Covid-19 aftermath

'We believe that proposals which seek to find solutions to our unique economic challenges must be considered and engaged by decision-makers in the government, the writer says.
'We believe that proposals which seek to find solutions to our unique economic challenges must be considered and engaged by decision-makers in the government, the writer says.
Image: 123RF/Jarun Ontakrai

There is a general consensus here in South Africa and globally that the Covid-19 outbreak is likely to trigger an economic recession on a scale we have not seen in living memory.

Governments across the globe are grappling with what a post- pandemic reality looks like in terms of jobs, businesses, health and economic systems.

Here at home the same questions are top of mind.

For this reason, a group of academics have written an open letter to President Cyril Ramaphosa, suggesting a set of proposals they believe could mitigate the economic devastation of this outbreak.

Drastic in nature, the proposals aim to address challenges specifically created by our structural inequalities.

For an example, they call for income transfers to lower and affected income households.

They further propose guaranteed wage payments that go beyond the Unemployment Insurance Fund, saying the fund should be used as "fall back, rather than a default".

For casual and informal workers who have lost income because of the national lockdown, they suggest targeted benefits such as temporary unemployment payouts.

Expanding access to low-rate emergency loans and temporary payment holidays for municipal rates, mortgages and other debt are suggested as potential provisions to help sustain businesses.

The group argues that the current solidarity fund, welcome as it is, will fall significantly short of meeting the increasing demands of communities and sectors in distress.

Like any of the proposals made before, there are serious questions that must be asked about the viability of these ideas.

Not least of all, questions about affordability, the practicalities of implementation and capacity on the government's part must be interrogated further.

But merits aside, we believe that proposals of this nature which seek to find solutions to our unique economic challenges must be considered and engaged by decision-makers in the government.

Doing so can only increase our chances of coming out of this in a better shape than we currently find ourselves.

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