Wednesday, 15 April 2020

Life and Wealth after Covid-19

For most of us Covid-19 is an unprecedented catastrophe. As the incidence of death starts to plateau, we are starting to look at what the future will look like. For many and most of us life as we knew it will never be the same. It is time for us to learn, adapt, or perish, if we have another pandemic or global crisis.
 First let us thank all those medical, health practitioners, and first responders who have given their time to save lives, the front line in grocery stores, truckers and food providers who keep the supply chain moving.  Times of crisis are great educators. Out of gloom and doom the human race has come out and progressed, this time is no different if we learn from our mistakes. Governments around the world have ignored the severity of the pandemic because they were misled by the Chinese government who did not advise the world about the outbreak of the virus. Some governments were not prepared for the extent to which the spread of virus would affect their citizens. The World Health Organization (WHO) is increasingly being blamed for their inability or lack of transparency in handling the whole disaster. As a result the number of cases and deaths has risen to a level never seen before since the Spanish Flu pandemic in 1918.
 Could we have handled the situation better? Yes and no. If countries had closed their borders earlier there could have been a mitigation of the number of infections, but the fear of offending people stopped many governments from closing their borders. Since there was no scientific diagnosis of the virus, very little was known how it spread and how and who it affected. Testing which is touted as the major solution to manage the outbreak was not available, so it would have been difficult to stop the infection anyway. What we learned was that self-isolation, and distancing were perhaps the best ways to combat the infection on a large scale until a cure or vaccine is found. Unfortunately the rise in deaths was among the most vulnerable including the elderly, those affected by diabetes, pulmonary, heart and other medical conditions. In Canada a significant number of the deaths occur among elderly patients in long-term care homes. But the left could not stop itself from using the race card to win political points when it was found that minorities in the U.S. were affected in larger numbers. However they ignored the facts that minorities live in closer quarters in high density areas, are more prone to heart and diabetes due to diet and poverty, and that the areas most affected had a larger population of homeless people and illegal immigrants in sanctuary cities. British Columbia, Alberta, Toronto and Quebec were the airports which were still functioning, and allowed passengers from other countries to enter the country, with minimal or no testing available.
As governments realized the enormity of the pandemic, citizens had to adapt to a new reality. Self-distancing closed everything. No more crowding, as all gatherings were suspended, and we have now entered a life with no contact and isolation, with no sporting and entertainment events. The work place as we know it has changed, many work from home, schools have closed and classes are delivered online. Restaurants and eateries are now operating online with a delivery service. The result has been a collapse of the economy and the realization that globalism may have failed us. Governments are pouring money into the economy to ward off a major depression. Trillions of dollars are being printed and the stock market has dropped to record lows. The problem is once the pandemic is over; the large debts will have to be repaid. It is well and good to see government pour money to stave off a major collapse of the economy, and provide support for all the people who have lost their jobs, but the fact remains that the recovery may produce a world totally different to the one we have known before the pandemic. How long will the lockdown last? Can we survive for very long with a completely closed economy?
We cannot afford to open the economy too quickly, because we may face a second wave, due to false negative testing which could be even worse. Perish the thought that our political leaders decide that their power base is being threatened and that they require more powers to manage the situation. It is already apparent that global organizations like the WHO, IMF, and the U.N etc. have failed us during this cataclysm. All powers granted in these difficult times should have a sunset clause. However there are many who believe that this is an opportunity to organize a World Government. As Trump said, and now reported by MI6, it is becoming apparent that the WHO formulated a ‘China centric’ policy to advise the world of the pandemic. They were late to inform the world about the extent and severity of the virus. The WHO did not provide true data from China the country of origin of Covid-19, despite red flags from Chinese scientists as early as November of 2019. Can we really believe that China with the size of its population has only some 4,000 deaths compared to the U.S which may have 25,000 deaths?
While Trump may be blamed for his nationalist positions, it is now clear that he may have been right in his opposition to the continued trade practices with China. There is no doubt that China has been practicing a policy to see them dominate the world within the next decade. Unfortunately, the western world which has been blind to the real threat posed by China has continued to rely on cheap Chinese labor for the production of many of our essentials. The reliance and dependence on Chinese products, including pharmaceuticals has exposed the world to the reality that it is time for industrialised countries to bring back their manufacturing industries and start producing many of the essentials at home. The focus of western nations and an obsession with climate change prevented many of them from being prepared for a pandemic. The medical profession was exposed because many countries did not have a strategy to deal with a pandemic. Too many countries did not have enough ventilators, masks and personal protective equipment (PPE). Fortunately due to entrepreneurship and the endeavor of many private businesses (some 5,000 in Canada alone), the vacuum is gradually being filled and innovation in the private sector came to the rescue.
All the changes made during the crisis have also provided us with new opportunities. We may well see a world which will restructure the way that we live, work and play, where technology used to connect us will definitely expand our service delivery from health through tel-med and education increasingly using the internet to teach. We may finally see the promises that were supposed to be delivered by new technologies finally take place. More time working at home rather than in big box offices. Less government dependence on large labor forces as a result of restructuring, because during the crisis, it showed that the need for large bureaucracies did not stop the world from continuing to function, albeit at a slower pace. Re-training will be needed to absorb many who in the workforce would have lost their jobs.
Prior to the declaration of the pandemic the U.S. economy was in good shape. Despite the WTO’s claims that we may see 32% shrinkage in the global trade, the IMF predicts shrinkage of 3% in the global GDP for 2020.  I believe the economy will recover in a U shape rather that the Trump touted V shape. It will take some time for life to come back to normality. Wealth after Covid-19 will depend on how much we grow national economies not just global economy. It is quite apparent that much of our future will depend on the ‘invisible hand’ as described by Adam Smith, and not necessarily on the expansion of government. Government debt will have to be repaid; only growth in the economy will spare us the huge taxes needed to repay the largess of government during the crisis. Financial help to large corporations should be limited to loans and a share in equity position by the government. Once the economy is restored governments could recuperate their investment through the sale of their equity shares. Any gains from these investments should be returned to the public in the form of tax reductions and not used to further political legacies. A massive investment in infrastructure delivered through Private/ Public partnerships will give an enormous boost to the economy. SMEs are the backbone of the Canadian economy, and we must ensure that we transform our economy and rely less on the traditional industries that have made Canada what we are today. It is not the role of the government to diversify the economy, the private sector, with fewer regulations, will take us to the next frontline.
As for how we live with each other, we may have to re-consider high density living. While we ponder whether the handshake will be a past tradition, it is really important that we regain control of our freedoms and not allow governments to further their grip on powers acquired during the crisis.
A few important changes will have to be made to Canada’s geopolitical agenda. Foreign aid to gain votes to acquire a seat at the U.N for example must be curtailed. Charity should begin at home, and essential supplies should be used for national purposes before being sent to foreign countries. Progressive governments should come to the realization that climate change is not the existential threat faced by humanity, but rather that virus and pandemic are the more pressing dangers. That will need a re-assessment of the oil and gas politics. Covid-19 has exposed the Trudeau government’s deficiencies. Coupled with a Russia/Saudi Arabia oil skirmish, the price of oil has collapsed and has affected the Alberta economy even more, hence the economy of the country. Furthermore the pandemic has exposed our demand for PPE and other medical supplies and our dependence on plastics. The source of plastic, it must be remembered, is OIL.
The world’s relationship with China will have to be severely reassessed as a result of this pandemic. That will include not only trade but the military expansion in the China Sea and its influence in other parts of the world, namely Africa and the Middle East. Trade will change and the role of WTO, IMF, the U.N and other global organizations will have to be swotted.
Covid-19 may well be the catalyst for the world to take a breath and re-assess what is important and how we regain control of our lives and wealth, without too much reliance on a One World Government or organizations that have failed us in this time of crisis. It is not a call for a retrenchment into nationalism, but rather a serious look at collaboration and not abdication and loss of sovereignty. We will come out of this crisis, and the world will be better for it.

Wednesday, 1 April 2020

Covid-19: Aftermath and future perspectives

 Except for two world wars, never since the 1918 Spanish Flu pandemic has the world been in such panic. We are in lockdown and we now have social-distancing and self-isolation to contend with. Death is looming around the world and politicians are struggling to get the world back to normality. How did we get there and where are we going?
In December 2019, the Chinese city of Wuhan first identified the deadly coronavirus infectious disease, which has now caused massive numbers of death around the world. As of yet the world experts have not found answers or a cure, as a result governments have locked us down and are coping with the rise in cases and deaths as best they can, so far with some partial results. Governments have dealt with the pandemic in different ways, some better than others, but the lack of testing remains a major obstacle as data remain sparse at best. Recommended measures like 14 days self-isolation may mitigate the rise of cases. Estimates put the possible deaths in the thousands if not millions. The lack of solid data has caused panic and given rise to many conspiracy theories.
The virus origins are still being investigated. The first cases where found in China, the political rhetoric and spinning have done nothing to alleviate our fears. The Chinese government has accused the Americans of spreading the virus, and President Trump has called the disease a ‘Chinese virus’. While the origins are being disputed a report from the South China University of Technology has surfaced commenting on experiments using horseshoe bats and stated: “The killer coronavirus probably originated from a lab in Wuhan. Safety levels may need to be reinforced in high risk bio-hazardous laboratories.”  China was very late in advising the world of the outbreak, and it seems that it may have been too late for necessary precautions to be taken; hence a worldwide infection became inevitable.
Governments and world institutions have failed us. The World Health Organization (WHO) was very late in declaring the outbreak a pandemic, while the WHO leadership consistently covered the Chinese government for its lack of transparency. Italy became the first European country to see the rise of daily number of deaths, followed by Spain and France, and now the United Kingdom. In the United States the first cases where found in the State of Washington and has now spread in all fifty States with New York being the epicentre. Much of the uncontrollable rise in cases and deaths may well be due to the refusal to close borders and flights from abroad. In Canada the greatest number of cases and deaths are in the four cities which were still open to flights from abroad. Quebec, Ontario, British Columbia and Alberta As data is collected models project thousands of deaths before the pandemic is brought under control. All sports activities and competitions have been suspended and gatherings of more than 15 people has been prohibited. The irony is that ordinary citizens can be fined and prosecuted for being outside, the left social justice zealots would like to see prisoners released,
The number of deaths and the inability to control the rise of the disease has not stopped the politics. Governments have had to inject trillions of dollars into the economy as a world recession is expected. It is the role of government to protect its citizens but it is the different approaches that should alarm us. Politicians always find a way to use a crisis for political gains, some more than others. The massive injection of money into the economy gave some politicians the latitude to try and increase their powers. In Canada Prime Minister Trudeau, who incidentally has been self-isolating himself since the beginning of the pandemic, has tried to get dictatorial powers to tax and spend without the approval of Parliament. In Great Britain former Prime Ministers Gordon Brown and Tony Blair are asking for  ‘temporary’ World Government, once achieved we know how temporary this will last.  The idea of a ‘world government’ is no longer a real of conspiracy theory as it is now being discussed openly. The new Deputy Prime Minister of Canada Chrystia Freeland also espoused those views openly. Many see this new world order as a means to extend Keynesian economic theories through The  World Bank and  the International Monetary Fund as they claim  an increase in their financial firepower to cope with the impact of the crisis on low- and middle-income countries. The idea of a one world government has long been percolating in leftist circles, but now in opposition to Trump’s policies it has now surfaced openly. The composition, without the U.S, is still being considered.
Trump may be blamed for many things but he must also be given credit for his open trade war on China and his departure from globalist policies. The coronavirus crisis has exposed the fragility of the reliance of supply chains, mainly from China. The majority of pharmaceuticals are produced in China and now the shortages are very apparent. Given the source of the virus, can we trust China’s Huawei for the implementation of 5G networks? Furthermore the World Trade Organization’s regulations have given China so much latitude that they virtually control many of the world’s manufacturing. Despite these failures the left sees the crisis as an opportunity to counteract Trump’s views of ‘America first’. In my view this is going to be the next drama of division in the international arena.
All the while the crisis has also provided many opportunities due to the closure of businesses, schools and the heavy burden of the healthcare institutions. As we come out of this dangerous crisis we can use what we have learned to make drastic changes to the way we work, live and play. In future I see an increase use of the internet as a means of delivery for many of our services. Education has already embraced online schooling. The medical profession can see many opportunities to streamline how we provide healthcare. There are opportunities to re-engineer many of our public sector organizations. Economic measures must be measured and responsible, too much reliance on Keynesian theories may harm us in the long run. Philip Cross writes:  “Canada wasted its opportunity to focus on policies that raise long-term potential…Unrelenting monetary and fiscal stimulus gradually reduces the economy’s long-term potential growth rate.”
As I mentioned earlier our governments have failed us, and we should remember what Obama said in 2012: "If you've got a business—you didn't build that”, fortunately in this crisis it is being proven that it is the private sector that has come to the rescue, producing thousands of personal protective equipment, gloves and masks. Grocery stores, restaurants and fast food small businesses have continued to feed us while we are confined in our homes, Trump’s call to the private sector has been answered in no uncertain terms.
While the world struggles to cope with this unprecedented pandemic, we must also examine the role of the media. It is important to get unadulterated news that informs the public to avoid panic. Unfortunately, for political reasons this has not been the case during this time of need. Too many reports have actually caused panic buying and shortages. The hate for President Trump is apparent in many media reports. First he was branded a xenophobe for trying to close the borders for flights coming to the United States. There are calls for the curtailment of his daily briefings because it may be used as a campaign platform. His every word is being parsed to find a chink in his armor. All the while the media has ignored many of the problems of other leaders, Canadian media has used every Trump faux pas , increasing cases and deaths, to inoculate the Canadian Prime Minister who has been absent, except for a daily outing out of his residence like Wiarton Willie out of his den. They have ignored, quite deliberately, the reports that Canada sent tonnes of health equipment and lab viruses to China. European leaders have failed miserably as death tolls rise in Britain.  Boris Johnson and his health Minister have both contracted the virus. The European reaction to the pandemic has been slow at best, but the eyes are all on Trump. It is stated that the number of deaths in the U.S has surpassed those of China, but can we rely on data coming from the WHO and China?
There is no doubt that the world will have weeks if not more months of hardship as we face the consequences of this pandemic. However I strongly believe that we shall come out of this stronger if we take the right steps. There are many opportunities; necessity is the mother of invention, and we are seeing this take place every day. Innovation, not government platitudes will get us out of this crisis.
 Bob Dylan sang: ‘the times they are a-changin’ - and they have. We must use what we have learned to make better choices, less reliance on government for certain services that can be better provided by the private sector. Be aware and very cautious of politicians who would use this crisis to acquire greater powers, especially their agenda to increase reliance on international organizations leading us a to a One world global government.