Some positives amid dire economic predictions
Global Business Solutions CEO Johnny Goldberg says while there is every indication that the country is still heading towards the epicentre of the coronavirus pandemic, there are positives on the horizon.
Goldberg said that worst-case predictions, issued in late May by the Modelling and Simulation Hub, were that by end 2020 SA might have up to a million people infected and about 40,000 will have died.
“In the face of this, we also need to take maximum advantage of restarting the economy in a safe way.”
Goldberg said that while the country was officially on level 3, it was effectively already on level 2 regarding some of the easing of restrictions. The problem is that while citizens should be observing all self-regulation controls, it is difficult, often impossible, for them to comply — with public transport one of the key areas of compliance difficulty.
The same applies to schools and pupils. Social distancing with scholar transport or in classrooms might be the aim, but the reality is that in most schools it will not happen, because the facilities are inadequate.
One ray of hope to dampening the rapid rise of infection, and with it deaths, lies in adhering to health and safety regulations as businesses open, said Goldberg.
“We have to get the economy back on its feet, or the country will be in serious long-term trouble. It is not going to be easy because as more and more people lose their jobs, or companies fold, there will be less money in the economy, and with it lowered demand for goods and services. “Fortunately government has reacted swiftly with the UIF [Unemployment Insurance Fund] payments and will hopefully keep the momentum going in the next few months.”
In May, Business for SA’s research showed that a minimum of one-million jobs were likely to be lost, but it could be as high a four-million.
Sectors at greatest risk, according to a report released by the Commission for Conciliation, Mediation and Arbitration, are business/professional, retail, private security (safety and security) and food and beverage, including restaurants. GDP is predicted to drop between 10.3% and up to 16.7%, although other institutions have this as low as 6%.
“Employers, across the broad business spectrum, have it in their hands to strictly control all aspects of worker interaction, and with it putting the brakes on the spread. For instance we know that a factory that employs say 1,000 people should be running three shifts of 300, and observing strict social distancing between shifts.”
The reduction in demand might also mean that of the 1,000 staff, 400 were going to be redundant.
“A solution is that all 1,000 are retained. They work for 60% of their pre-pandemic hours and are paid 60% of their salaries. One of the key words that will allow us as a country to beat this thing is flexibility, across employer and employee relations.”
Goldberg points to the changes Covid-19 has forced on all Global’s divisions.
“We do self-assessments, wear masks and often visors, stay at home if we have any symptoms — cough, sore throat or the like — limit the use of public transport where possible and work from home as often as we could.”