Egypt’s President Abdel-Fattah Al-Sisi has set into motion a package of important initiatives and measures to steer the fight against the unprecedented coronavirus pandemic that could ravage the domestic and global economy. He urged citizens to follow the advise of public health authorities and to avoid going out as much as possible in order to help curtail the spread of Covid-19. “The world will be a different place afterwards,” he said. “The economic impact will be extremely profound, even in countries that manage to contain this disease.” Alluding to the political exploitation of the crisis, he stressed that the official figures reflect the current situation in Egypt and added that from the word go certain parties were determined to cast aspersions on every action Egypt took. “The very least that can be said about these aspersions is that they are lies containing a lot of slander and have nothing to do with coronavirus.”
The global socioeconomic fallout from this crisis could last months. Economists predict unprecedented rates of unemployment, especially among irregular workers, severe recession in most industrial and commercial sectors and sharply declining economic growth rates.
The urgent social and economic measures taken by countries around the world share a number of features. They offer support to the most vulnerable sectors of society, increase government expenditures on social services, cut taxes, pump money into the hands of consumers, furnish emergency bailouts to hard hit sectors such as airlines and tourist companies, and increase funding for hospitals and the healthcare industry in general. The sheer magnitude of the crisis is forcing governments to shoulder more responsibility for the economy, in sharp contrast to the liberal economic strictures that prevailed during the globalisation era of the past few decades. Interventions in order to channel money and energies into medical research, manufacturing medical supplies, increasing hospital capacities and building new hospitals and other facilities are essential government tasks today. So, too, are government interventions to prevent the collapse of important economic sectors.
Even in the early stages of the contagion, it was estimated that coronavirus could cost the global economy more than $1 trillion of global GDP if it turned into a pandemic. Oxford University warned that the spread of the virus outside Asia could trigger a 1.3 per cent drop in global income in 2020, or about $1.1 trillion. An indication of how hard the pandemic might strike the world economy comes from the US where Congress has approved a $2 trillion emergency aid plan in order to contain the economic repercussions of the spread of coronavirus in the US alone. The sum equals 10 per cent of annual US GDP.
Financial and investment circles have welcomed the Egyptian government and Egyptian Central Bank’s urgent steps to stimulate the economy and offset the damages of coronavirus. They lauded, in particular, the measures to reduce the price of natural gas for industry, to cut electricity prices, to extend the deadline for paying real estate tax and to help out floundering industries. All such measures are crucial for local industry and investors.
Still, both domestically and internationally it looks like we have to brace ourselves for worse to come before humankind can beat Covid-19 into retreat. The dramatic coronavirus-related developments in Europe are very alarming and it is impossible to tell when scientists will find a cure. What this means is that a sense of collective responsibility between world governments and peoples is more crucial than ever before. Humanity must unite in the face of the most serious threat in modern times.
*A version of this article appears in print in the 26 March, 2020 edition of Al-Ahram Weekly