As the impact of the COVID-19 pandemic on the economy is getting bigger and bigger every day, it is also extremely important that the government and other stakeholders come up with well-prepared solutions and plans to deal with the issue as quickly as possible.
Obviously, the impact of COVID-19 on the political life of the country has been repeatedly deliberated upon by the government, opposition politicians, parliamentarians, legal experts and political science scholars. These stakeholders have also coming up with their own proposals about how the country should avert political crisis in these hard times as it would be impossible to hold elections and form new government by the coming September.
In a similar fashion, stakeholders have to be able to critically deliberate on how the country would be able to avert economic crisis during and after the pandemic.
As the UN put it clearly recently, there will be no return to the “old normal”, governments must act to create a new economy and more jobs.
Hence, the economic fallout caused by the COVID-19 pandemic is forcing governments around the world to come up with policies for stimulating the economy.
Ethiopia is also no exception. It has to prepare its own plans and road maps to deal with the issue. True, the support of the international community will have paramount importance in dealing with the pandemic. An extraordinary scale-up of international support would help ensure that people have access to essential services. But it is indigenous and contextual solutions that would help to quickly recover the economy from the coming crisis and recession.
In this regard, while all stakeholders step up efforts to tackle the challenges presented by COVID-19, it will be critical to link every
action with economic recovery. This is because the economic effect of the current restriction in the movement of people will be severe. Hence, the remedy should start now.
For instance, digitalization of selected economic sectors would help to reduce the negative impact. Economists also advise that policy reforms and measures that promote saving are necessary to stabilize the economy.
Though the impact of COVID-19 is severe, it is also important to give due emphasis to Deseret Locust and other natural disasters, which are also having a significant impact on the economy. As these are a new phenomenon, it is necessary to make reform measures on the previous economic policy. This is because as it is difficult to balance supply and demand during a crisis, it is mandatory to come up with new policy measures.
Moreover, the government has also intensify its preventive measures to avert further adverse impact on the economy. The sooner the country controls the pandemic, the better for the economy.
As to economists, it is also imperative that the government continue to provide support for the country’s financial sector. Among many, these measures should include reducing the interest rates and revising credits that banks have given for investment activities. It is also salient that the reimbursement period is postponed.
True, the government has already started to take these measures, but they have to be strengthened by the active participation of stakeholders. Being a developing country without strong institutions, it would be inevitable that the pandemic will leave a scar that stays for long on the economy. Hence, it is high time for stakeholders to critically deliberate upon the issue and prepare a roadmap that would effectively go through an inevitable crisis.
The Ethiopian Herald May 7/2020
