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Global Chambers View on Coronavirus

 

How has the rest of the world responded to the Coronavirus? This piece collects the experiences and stories from Chambers across the world for member knowledge.

The Outbreak

Six months ago, Coronavrius broke out in Wuhan, China, and has had ranging impacts across the world. As weird as it is to write in 2020, lock downs have become a standard but vital feature in the global society.

The virus was first seen as a national crisis for East Asian governments and businesses, they did not have the benefit of learning from others, they were the pioneers of the response. Lockdowns were new and mitigating measures for domestic business, however they could still rely on the rest of the world for trade and to keep the economy ticking. When it then broke out globally in early 2020, it acted as a second economic hit to the Asian markets.

Acting early to trigger a lockdown on non-essential travel and implementing working from home strategies has also become usual practice. Greece for example has one of the lowest counts and death rates of the virus due to its quick lockdown, a harsh, considering its recovery from its decade of debt (reaching peak GDP growth of 3% since the crash), but life saving measure.

Lockdowns have had some adverse effects. In America, the Tampa Bay Chamber tells us the “Safer at Home” Ordinance encouraged workers in affected areas like New York or LA to return to their home states like Florida, further spreading the virus and pressing Governors to enact new quarantine measures and screening support for airports.

Global Trade Alert notes that there have been 310 new harmful trade interventions (state policies that harm trade), staggering considering there was 384 in total for 2019.

It became apparent the key was tracking and chasing the virus. In Hong Kong and South Korea, the development of mobile apps was used to trace and isolate the virus. Allowing users to log their information, activity and how they were feeling. If they showed symptoms, they would be put in touch with a health professional and provide a map of that patients contact.

This in turn would allow family, friends and co-workers to isolate for a week, further containing the virus. It speaks volumes that in Hong Kong, a small area with 8m people, the total cases don’t even number a thousand, with only four casualties. In Germany, Europe’s biggest “tester”, cases are plummeting and are now planning to ease their lockdown restrictions over the coming weeks.

The Response

The main response has been focused on reactionary and comprehensive support packages and a moving of business on to digital and online platforms.

British Chambers have linked up with other national partners to better campaign their Government. In Slovakia they have formed a “Business Circle” to identify and lobby on COVID issues, finding members willing to further fund it to increase its capability. Meanwhile in Ghana, they found the Government economic plans lacking, and the Chamber led a business survey to highlight the strain of business. They are now a key stakeholder and consultant in the country’s economic response.

As part of the Chamber network, regional Chambers are having daily conversations with the British Chamber to relay on the ground feedback which is then relayed in BCC’s consultations with Government ministers and decision makers.

In return clear, precise and committed response is vital in helping business navigate. In America, Chambers reported confusion about a hastily and hefty 800-page bill passed, to be introduced three days later. Neither banks nor business knew how to administer or access the funds, and on its debut weekend, the Federal System crashed 2-3 times.

Meanwhile, Spanish and Indian Chambers reported the dangers of mixed messaging. In Bilbao, members were getting so much information from local, regional and national governments or organisations that it was becoming indigestible for business. In India, there was an issue of fake news, and the Chamber was tasked with making sure only authentic news of the virus and government measures were reaching business, and not being conned into making the wrong decisions.

Chambers across the world have tried to make sure that business get the right information, but that the real experience of business is being relayed to Government to introduce new, or better, measures to support the economic response.

The Outlook

The measures imposed have had serious impacts on the global economy, the fast-growing Chinese have halved their predictions from 6 to 3% growth, while in South Korea around 52% of business are forecasting 6-12-month disruption.

The UK predicts the biggest on quarter decline since 2008, with the OBR has predicting a 35% downturn in GDP. This is then countered with a sharp rise once the UK “re-opens”, but that depends hugely on the length of the lockdown and transitional measures to return. Either way, there are tough months ahead, and the Chambers are campaigning Government to make navigating as smooth as possible.

Only in the early stages, India has launched a national lockdown of “non-essential” work, almost halving growth predictions from 5.5% to 3%. However, already suffering a faltering economy with a widening trade deficit, India is taking a longer-term approach, mapping its recovery with plans to accelerate infrastructure development, incentivise exporters, and phase workers in.

Despite these gloomy forecasts, there is room for optimism The Hong Kong Chamber recalls the rapid bounce back from the SARS outbreak, which was aided by the rising growth of neighbours China. While China’s growth has slowed since then (it was around 12% growth in 2011), it’s size and role in the global economy is much greater making it a more demanding consumer.

Once the recovery starts, China’s demand for their neighbour’s materials and supplies will increase, fuelling their economies as a result. In turn this may cause a further global shift towards Chinese markets (which may further fuel US-China trade war) but will drag the neighbourhood economies up and out of isolation, and hopefully breathe life into Asian markets.

Not to sound too dramatic, but after a war there are post-war booms of people going back to work, spending money and generally celebrating life. As people isolate and remain home they build up their purchasing power, hopefully meaning that once this ends, demand for services and goods will rapidly rise.

However, this boom relied on the powerful trade ally of America to supply and finance regeneration projects. America, already suffering from the result of the trade war, has posted contracting growth from 2.2% to 2%, but some estimates say it could shrink as low as 1.3% with an annual 8.3% drop in GDP.

In the age of Trump and “America First” it is unlikely America will adopt such an international outlook in this crisis, and instead the European gauntlet will lie at the feet of the European Union. A co-ordinated recovery package and support for member states will be crucial in keeping the Eurozone floating (looking at you Greece and Italy).

The outbreak has caught out the EU, because its budget for 2020 has already been rolled out. It now needs to bring forth future budgeted money, while still reconciling the loss of UK contributions, to aid members during the crisis. It has also lifted economic rules, like State Aid, so states can keep ticking.

This has sparked debates within the Union on what happens next. Some states, namely Italy, feel they are taking the brunt of the virus, while other members took had time to base their response based on their experience. Essentially, they want the cost and responsibility spread across the Union while some better placed states, namely Germany, do not. The Irish Chamber tell us this is causing friction and stalling for those in need, and while it still goes strong, there are some concerned faces around the Eurozone table…

But any recovery, no matter how grand, must recognise the individual and their safety. Getting people back to work and helping business regain confidence will be crucial. India are already planning a “return to work” scheme, helping Indians get new jobs, along with major federal projects, in Hong Kong companies are returning to work “in teams” (having reduced, alternating, numbers in the office, to keep spacing).

As countries start to become restless with the lockdown and seeking a way out, we must not lose focus, and encourage a “second wave” of the virus by easing too early or liberally. Reports from China indicate that they are once again seeing a spread of the virus…

My final thoughts

It’s important to take some lessons from isolation too. As I have sat in these four walls of my flat, I have become ever more connected to global Chambers and business and reminded me of the importance that we work together, not closing the door.

It’s easy to lay blame, scapegoat and turn our back in times of crisis, but this would hinder ours, and partners, recovery. Coming out of this scenario, everyone will be at ground zero, some states or business will try strategies that will work, some that will fail. Working together we can learn, adapt and rebuild, isolating ourselves further would only cut us off from new opportunities in existing or new markets.

There is light at the end of this very dark tunnel, but we must continue to work together to reach it.

This piece was done with the help of Chambers across the Global Business Network. With over 100, the Chamber can link you with contacts across the world. See the brochure here, and get in touch with global@neechamber.co.uk to find out more: https://www.flipsnack.com/A7BBBADEFB5/global-business-network-fd132ch7e.html