Opportunity in crisis
THE COVID-19 pandemic has seen great changes to our economy, including job losses, business closures and stock market crashes.
Associate Professor Taha Chaiechi, the Australian director of JCU’S Centre of International Trade and Business in Asia, describes it as a twin crisis: a crisis of public health and a crisis of global economic systems.
“Health is wealth,” she said. “This crisis is happening at such a large scale because there is a vital relationship between the population’s health and economic performance, particularly in our highly mobile world.”
Essentially, a healthy population equals a healthy and productive workforce.
“High worker productivity leads to larger volumes of production, higher levels of investment, and ultimately more income for wage earners and profit for investors,” Dr Chaiechi said.
“When a large portion of society becomes seriously ill, or is at risk of becoming ill, we should expect to see large-scale global social disruptions and restricted mobility with huge economic losses.”
She acknowledges we’re in unsettling times and the full economic consequences are not yet fully understood.
“We are facing a sharp economic contraction, and we won’t know if this contraction is actually a recession until we have official data for the June quarter and beyond,” Dr Chaiechi said.
“But we do know that here in Australia we have automatic stabilisers in our tax system designed to absorb part of this shock.”
In looking ahead to what our economic future may hold, Dr Chaiechi looks back.
She explains that, historically, largescale crises have led to new ways of economic thinking and revolutionised the way people live.
“I believe that when this crisis has passed, we will witness significant change in the way we think and act, individually and collectively,” Dr Chaiechi said.
Dr Chaiechi says that as we are in self-isolation and the economy is essentially in hibernation, it is an opportune time for us to consider how to move forward.
She suggests that businesses take this time to consider diversification (where possible), review their flexibility and consider continuity plans to minimise potential damage due to loss of customers.
“This is particularly important because when the recovery phase starts, the economy will expand quickly and the workforce needs to be ready to grab opportunities,” she said.
“For individuals, this is a window of opportunity to go back to school to learn new skills or to upgrade your existing skill sets to become more competitive when industries begin to hire again.”