Leaders must think outside the box
Arecent Bloomberg Opinion article—financial anxiety is up around the globe—describes how people around the world are reeling from the fiscal shockwaves of the covid-19 pandemic. Author Ben Schott said a new 26-country survey suggests that many people are perilously unprepared for a major economic jolt.
Schott cited the Organization for Economic Cooperation and Development’s 2020 International Survey of Adult Financial Literacy, which said 42 percent of the 125,787 adults polled reported worrying about meeting everyday expenses; 40 percent were concerned about their financial situation; and 37 percent reported they were just getting by.
Most concerning, according to the author, is the response to the question, “If you lost your main source of income, how long could you continue to cover your living expenses, without borrowing any money or moving house?” 28 percent said about a week; 25 percent said about a month; 15 percent said about three months; and 18 percent said more than six months. The remainder, just over 14 percent, reported not knowing—which the study’s authors suggest is “revealing of either unpreparedness to consider such eventuality or lack of resources for a financial cushion.” And the financial precariousness in this increasingly unstable world is far from evenly distributed.
According to the World Bank, the pandemic could push about 49 million people into extreme poverty in 2020. Although a large share of the new poor will be concentrated in countries that are already struggling with high poverty rates, middle income and rich countries are likewise affected. That’s the reason why governments are giving out cash to their citizens to help cushion the economic impact of the virus.
Some countries in Europe, for example, are paying citizens to stay home in their desire to control the spread of the virus. Some economists view such social programs differently. They said these programs serve as a powerful vaccine against the pandemic’s feared economic toll: recession.
Singapore has a novel version: The government is paying Singaporeans to keep healthy. To do this, the government has partnered with Apple Inc. on a two-year health initiative dubbed Lumihealth, which is built around tracking and rewarding user behavior through the Apple Watch gadget and an iphone app. Through this scheme, Singaporeans will be able to earn as much as S$380 ($280) in rewards and vouchers by completing goals and tasks set within the app. Goals can be accomplished by walking or doing other forms of exercises, and the Lumihealth app will offer personalized coaching. Wellness challenges will nudge users toward making better food choices and improving sleep habits. “Even as all of us around the world are dealing with the challenges of Covid-19, we must keep investing in our future. There is no better investment than in our own personal health,” said Singapore’s Deputy Prime Minister Heng Swee Keat.
On top of the Social Amelioration Program, what can our government do to provide relief for the poor and the vulnerable during the Covid-19 pandemic? We should realize that even employees with incomes above the poverty line, and therefore not SAP beneficiaries, also need support now to be able to meet their basic needs. The government may want to copy Singapore’s example. However, the sad reality is that any move to reward citizens who stay healthy will be met with a huge hurdle: How to afford it? Until a vaccine is found, the months ahead will be difficult for the majority of Filipinos. We need leaders who can think outside the box to help ease the burden caused by the pandemic among our people.