How the greedy ruling elite failed us, by putting profit before pandemic preparedness
- The global ruling elite, who ignored expert warnings of a pandemic, are even now proposing stimulus measures to prop up markets, rather than truly help people
- Expect any attempts to align supply chains to health care or welfare imperatives to meet fierce resistance from vested financial interests, further holding back economic recovery
The trillions of dollars in aid will not return the world to where it was; this is not like restarting a disrupted film. The global economy could fall by over 20 per cent in the second quarter, the biggest drop ever during peacetime. Any recovery during the second half of the year, or beyond, is likely to be anaemic for four reasons.
First, life cannot go back to normal so soon. Social distancing may slow down Covid-19, but will not eliminate it. If people return to their old ways, the virus is likely to come back. Social distancing, even loosened, has a significant impact on the services industry.
Political forces are likely to ensure global companies rearrange their supply chains to reflect national interests, not just profit maximisation. This process of deglobalisation will slow the economy and generate considerable inflationary pressure.
Lastly, the crisis is forcing governments to reallocate resources to health care systems and other forms of welfare protection. The US spends nearly one-fifth of its GDP on health care but is failing to cope with a pandemic like this because resource allocation has been driven by profit, not the safety of the masses. As vested financial interests resist the reallocation of resources, the economy is likely to be dragged down.
People become depressed when confined in small spaces for too long. Hong Kong’s property market is at best a screw-the-poor and rob-the-middle-class plot to benefit the rich and powerful, often in the guise of an everybody-can-get-rich casino. This crisis has exposed it as a bloodsucking conspiracy against the people. Is a revolution avoidable?
In this grim tragedy, the good news is about the scientific race for new equipment, medicine and a vaccine to fight the virus. Human ingenuity tends to become turbocharged under extreme pressure. The discoveries during the second world war have powered the tech economy ever since. The discoveries made during this Covid-19 war may unleash a wave of bioscience advances to benefit mankind for ages to come.
Andy Xie is an independent economist