Having COVID-19 under control only way to stop massive job cuts
Cathay Pacific’s restructuring program has been widely anticipated. Yet, its Wednesday announcement of the elimination of 8,500 posts still shocked the community, particularly the airline group’s affected staff and their families, and could have a ripple effect.
The city’s rising unemployment rate, which hit 6.4 percent in the three months to September — a near 16-year high, has been priming Hong Kong residents to brace for the economic impact of the COVID-19 pandemic. But the news about Cathay’s massive job cuts, the biggest in its history, is still disturbing. It suggests that many other big employers, also hard-hit by the pandemic, could follow suit.
Conceivably, the sense of job and income insecurity will continue to rise among many residents, further weakening their desire to spend. Weaker local consumption will aggravate the woes of the service sectors including retailing, catering and transportation, which have been hard hit by the pandemic — particularly the lockdown measures. This will reinforce the vicious circle.
The rounds of relief and support measures rolled out by the special administrative region’s government have helped thousands of businesses stay afloat and delay their layoff actions. But relief measures cannot last long because the public coffers are not without constraints, and have been significantly strained by the nearly HK$290 billion ($37.4 billion) expenditure in the previous two rounds of unprecedented relief measures.
Furthermore, any relief measures, stimulus policies or expansive monetary and fiscal policies implemented during a recession will be futile if they cannot facilitate a recovery in the economy. Hong Kong cannot shake off its current economic woes without resuming most economic activities. For that to happen, the city must first get the pandemic under control.
Only then can Hong Kong rescind most quarantine and social-distancing rules which have restricted economic activities. Having the pandemic under effective control, which means reporting zero local cases for 14 days, will also allow the city to implement a health code system that will let people travel in the Guangdong-Hong Kong-Macao Greater Bay Area without being quarantined.
Unfortunately, all those strict social-distancing measures and the voluntary universal community testing program completed in September have failed to identify all virus carriers and sever all infection chains. It seems that a compulsory citywide testing program is the only option left for Hong Kong, which hopefully can help control the pandemic, in the absence of effective vaccines.