Is This Another Great Depression or Are We Still In Denial?

The US is experiencing severe economic downturn and has reported a 30% unemployment rate, a surprisingly slightly higher percentage than that of the 25% rate during the Great Depression in the 1930’s. The stock market is crashing down though tech businesses can still function such as Microsoft, Zoom Video Communications, Adobe, DocuSign and Citrix Systems with more people now working from home. All these companies have cloud-based systems that can actually allow their employees to work remotely. While other businesses lay off employees and are retrenching, Amazon announced that they are in need of 150,000 more workers, telling us that in times such as this, more people are opting to buy online. Most countries in Europe are shutting down factories, shops and other establishments that require physical contact. The Denmark government offered to shoulder 70% of private companies’ workers compensation provided that they won’t terminate their employees. They claimed that this is going to be economically beneficial for the whole country when things go back to normal, but even they themselves are not confident that they can continue to do so after 3 months. Meanwhile, our government is also thinking to aid workers who are affected by the lockdown and can’t work at the moment as they are in a “No Work No Pay” scheme, but can the Philippine Government afford it and for how long? The whole world is now being affected by the pandemic and somehow, economists are thinking that another Great Depression is coming and that all these solutions are provisional. With the way things are going, it is safe to say that this might go on for months if not years.

The tech businesses are probably thriving now given that social distancing is encouraged to avoid the Covid-19 spread but will it last? Even online shoppers won’t have money to spend for shopping if they are unemployed. With more and more small and medium enterprises closing down, will these tech businesses continue to survive when most of their clients are going out of business, retrenching or being out of jobs?

Screenshot taken from: Worldometer

The Philippines is now on a State of Calamity. Most businesses have closed down and a lot of workers have been laid off.  The government is about to implement a stricter lockdown system. There are talks that they may completely ban going out and just distribute supplies to the people. If the government can implement this, the virus spread will probably slow down but complete eradication is somewhat farfetched. Recent records show that number of cases is still going up despite lockdown, the reason mainly because we lack testing kits. The thing is, even before a PUI is listed as such, this PUI may have probably infected more people without his knowledge, and those people may have infected more and so on. The virus spreads faster than we could ever contain it. As of this moment, the Philippines have 462 confirmed cases and 33 deaths recorded.

Social distancing is being practiced in a grocery store in the Philippines

Symptoms don’t usually show before 5 days of being infected and this is where we are having a gap. Because we lack testing kits, we can only test people who have actually shown symptoms or people who may have been in contact with someone who has been tested positive. We could probably not afford to test everyone though I would say this is the only solution there is for now. One other thing would be to develop vaccines and have everyone vaccinated. These 2 are the only permanent and long term solutions to completely eliminate the virus.  And even if these 2 are readily available, can our government afford these?

Congress in Special Session- March 23,2020
Photo by: New Straits Times

Today the President has scheduled a session with Congress asking for a grant that he may be given more power to control the country’s resources, limited as they are, private or public for the benefit of the country as a whole. Some are not keen to this proposal, specifically Sen. Tito Sotto as he doesn’t see the need for such takeover. Majority of those who are opposed are actually adamant to disapprove the proposed bill as they are thinking that the President might abuse his power but the administration assured the people that he will not misuse these special powers. They said he has proven that the administration demonstrated in Mindanao that they did not do away with democracy after declaring Martial Law in the south.

Relief goods being distributed in the Philippines
Photo by: ABS-CBN News

Italy may have underestimated Covid-19, and we are all witnessing the consequences. Are we also miscalculating the effects of this virus economically? If people would continue to be on lockdown without enough food supplies, the government may have bigger problems than that of what it’s trying to handle now. Perhaps we don’t have much choice but to grant the President of his proposal. As for all the entrepreneurs out there, we can only hope that there will still be business left for us once this is over.

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