This week’s guest blogger is JUST EAT co-founder and entrepreneur, David Buttress.
Here he explains what needs to happen before the economy can recover from the COVID-19 crisis.
It’s not going to be easy to recover – we’ve lost a relatively significant amount of time and revenue. But I also believe with the right leadership that we will get there and we could build something very exciting in Wales, especially when we are an independent nation, liberated by the obvious neglect and lack of mathematical political significance in Westminster.
In my opinion, there are 3 clear things that we need as starting points to drive this recovery and to create a powerful Welsh economy in the long term.
- Firing the economy back means one thing: Access to customers. This means that workers need to be back at work as soon as possible. For this to happen testing would have to be ramped up to the maximum, and all businesses would need access to the safety and hygiene equipment they need with clear social distancing rules and regs in place. The fact that we are not testing is slowing down the whole process in Wales of re-igniting the economy. Look at the case studies in Korea and Germany for how important testing is. Our governments have been far too slow to activate and understand this. Wales needs to focus on this particular issue more than any other if our politicians want to mitigate and help the Welsh economy bounce back quickly. The language of the Labour Party leadership in Wales has not filled me with confidence, but I do hope they will find their voice and sense of urgency soon.
- Customers having the confidence to return to regular social interactions and our purchasing power returning to ‘normal’ levels. For this to happen we need clear, fact-based specialist advice on what the risks are and how to mitigate them as individuals along with clear leadership and policies from Government that instil confidence in returning to normal life. Sweden is an example of this, where its economy is set to contract far less than others, and while they have not got everything right in the crisis, they have trusted and informed their citizens very maturely around how to go about normal life as much as is humanely possible. Customer confidence is going to be absolutely crucial and we can only restore this if we have the belief that we are safe as we relatively can be. In this sense and while I don’t like the hyperbolic references to war generally in relation to Covid-19 I will make an exception here, as I believe this might be our generations moment to show the pragmatism of the blitz spirit of citizens shown during World War II.
- All of us are learning lessons from the last few months. The sense of responsibility each of us has for others and the communities around us. If we feel ill, then we need to take this seriously, get tested and by definition protect each other. We know this is a highly contagious disease and if we have symptoms then it is simple – don’t go out and endanger wider communities. The ‘R’ rate as it is being referred to, is critical if we are not to have another lockdown after we open up and we can all play a role in keeping it below the key ’1’ target.
If the above is not put in place before the lockdown is lifted, then we will be back into another lockdown quickly which will damage us all and the society we live in.
How Long will it take for the economy to recover?
I believe it will take 12-18months to recover and 5 years to pay back the debt impact. But to help people understand the magnitude of this, we’ve lost in a quarter what we’ve taken a decade to grow.
Imagine the economy as an ‘L’ shape. Before COVID, we were at the top of the ‘L’ but then we drop down the ‘L’ quite rapidly and then it ‘flatlines’ to the bottom line while we are in lockdown. What we need is a ‘V’ shape in coming out of the lockdown – so there is a sharp drop then a sharp lift back up. If we do the above three things and be pragmatic and get on with our lives with all the rules and regs in place.
It’s really important that both Governments make it a ‘V’ style recovery as soon as possible.
If policymakers and business people get things right and start putting the new normal social rules in place now we can absolutely do this.
In fact, I think we could look back at life pre-COVID and see the virus as the change that needed to happen with regard to the economy, to get people investing and valuing things differently and steer our society in a different direction.
Covid19 is changing the way we talk about the economy
It’s forcing us all – business people, governments and consumers – to stare a new reality in the face. We are realising and talking about how we have underinvested in things like health, equipment, stockpiling – all of which is now having a massive effect of the economy recovering and being resilient like I’ve explained in this blog.
On a wider point, over the last few decades, society has become more fixated with celebrity than science and substance (Please see Donald Trump and Boris Johnson).
Who and what do we really value in our society? That’s a good question for us all to ask ourselves when we think about what we would like Wales to look like in the future. The latest celebrity thrown off an island or scientists, doctors, nurses, key community workers and PHD researchers making medical breakthroughs?
Covid-19 is changing everything – whether prince or pauper you are at risk of becoming ill and I hope we learn our lesson to value what I believe to be the better things for a future Welsh society.