THE coronavirus (Covid-19) pandemic gave a severe blow to the global economy.
Developing countries such as PNG were hit hard.
Can the Government take steps to speed up the economy’s recovery after the worst public health crisis has passed?
We need short-term response measures to address the health emergency.
Core public services will need to be accompanied by comprehensive policies to boost long-term growth, including improving governance and business investments in the country.
Current estimates show that 60 million people could be pushed into extreme poverty in 2020 and PNG is in that category.
These estimates are likely to rise further with the reopening of advanced economies.
The financing and building of productive infrastructure are among the hardest-to-solve development challenges in the post-pandemic recovery.
We need to see measures to speed litigation and the resolution of bankruptcies and reform the protected State-owned enterprises that have slowed development.
To limit the harm and help prepare for recovery, the Government should focus on securing core public services, getting money directly to people and maintaining the private sector.
Countries around the world are grappling with the consequences of the Covid-19 pandemic and the devastating socioeconomic impacts are apparent as our governments struggle to protect the health and well-being of citizens and respond effectively to rising unemployment and the drastic economic downturn.
The most vulnerable are the developing countries such as PNG who do not have the necessary resources and capacity to cope with the impact of a pandemic.
Many of the vulnerable countries, including our Pacific neighbours, may not be able to endure and recover from this crisis in the absence of adequate development finance support.
Currently, in order to suppress the transmission of the Covid-19 cases, PNG has been forced to close its borders and enforce strict social distancing measures – necessary actions that have nonetheless resulted in the considerable disruption of supply chains, trade in goods and services and daily function of businesses.
It has also led to an extraordinary rise in unemployment.
The main drivers of the economy – mining, tourism, agriculture, fisheries – had been crippled, while many other companies are struggling to stay in business.
The answer to the crisis is to build resilience.
When the pandemic struck, many developing economies were already vulnerable due to record-high debt levels and much weaker growth.
If the Government is serious about taking back PNG than they urgently need to take measures to limit the damage, rebuild the economy and make growth more robust, resilient and sustainable.
Policies to rebuild both in the short and long-term involves strengthening health services and putting in place very targeted stimulus measures to help reignite growth.
This includes effort to maintain the private sector and get money directly to people so that we may see a quicker return to business creation after this pandemic has passed.
At the same time remain vigilant to counter potential financial disruptions. During the recovery period the Government need to calibrate the winding down of public support and should be targeting broader development challenges.
The Government needs reforms that allow capital and labour to adjust relatively fast – by speeding the resolution of disputes, reducing regulatory barriers and reforming the costly subsidies, monopolies and protected State-owned enterprises that have slowed development.
The solution to this crisis lies in a collaborative response that includes both the private and public sectors, with a common shared vision.