Only Governments Can Prevent Covid-19 Recessions Becoming Depressions

By Jomo Kwame SundaramKUALA LUMPUR, Jul 30 2020 (IPS) Covid-19 threatens economic life the world over. The most urgent and important need is for governments, businesses and families to survive. Governments must revive economies and livelihoods to prevent Covid-19 recessions from becoming protracted depressions. The Covid-19 crisis is clearly a ‘black swan event’, threatening both public health and livelihoods. Both the pandemic and containment efforts are not due to business operations and decisions, but nonetheless have compelling consequences for them. Jomo Kwame Sundaram Covid-19 contagion contractionary, costly In East Asia and a few other societies, successful early precautionary and preventive measures, as well as testing, tracking and treatment of the infected, plus sufficient physical distancing, isolation and quarantine measures have been enough to contain the contagion so far. When such measures were not taken, inadequate or failed, ‘stay in shelter’ lockdowns became necessary as contagion spread. Nationwide lockdowns have been imposed in many countries. Such preventive and other precautionary measures have reduced economic activity and demand in many sectors. But trying to maintain aggregate demand as if there is no pandemic does not make sense. No matter what governments do, some output losses are unavoidable. So, the main challenge in addressing Covid-19 recessions is to avoid protracted recessions or depressions. Due to the continued need for physical d...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Asia-Pacific Development & Aid Economy & Trade Featured Global Headlines Health Humanitarian Emergencies Labour TerraViva United Nations Source Type: news