COVID-19 economic depression and unintended consequences of the lockdown
By Atty. Antonio P. Pekas
The economy is not like a bus that just did a stopover so its passengers can get to the CR or to have lunch in a restaurant. After that the bus would just resume its journey.
The backbone of our economy are the micro, small and medium enterprises (MSMEs) that take care of 70% of all employees in the country. Smaller ones of this sector could not just pick up their operations again just like the bus in a journey. Their operating capital could have been used up for food and other necessities during the lockdown. Whatever is left could have been used to settle obligations that could not be postponed. And it is not like customers would be waiting by the door to order and pay for any goods to be produced. It will take some time before orders would start trickling in.
Moreover, some key people in the production line might have gone back to the provinces to weather the lockdown.
Multiply these problems by the millions and you see factories or businesses still unable to resume operations.
If it took Wuhan, China three months to conquer the virus with its high-tech environment and its machine like efficiency in enforcing obedience to lockdown rules due to the totalitarian nature of the country, it will definitely take us a lot longer as we are way down in the technology ladder and that we are a country of ‘pilosopos’. We don’t just follow orders. We reason out, we debate, we dilly–dally as the virus multiplies in a fast and furious way.
Then after the lockdown period, say three months, it would be the rainy and typhoon season. During this time all businesses, those that remain standing, will slow down, except those manufacturing umbrellas and other rain day gears, and medicines for wet season diseases like the flu, the common cold, etc. Business will start picking up only by the Christmas season.
In the US all of the Detroit Big Three car companies stopped their operations and they were joined by Honda and Toyota. Easily this added more than 200,000 to the jobless pool. This could go to the millions when you factor in the multiplier effect—the employees of their suppliers.
Then consider other industries and you will have millions and millions and millions of jobless in the US alone.
Incidentally, in continuation of the study of Dr. Ravi Batra of the depression in the US from 1929 to 1939, amont the other businesses that progressed during that time were repair shops. Since the people could hardly buy new gadgets and machinery, they tried every way to keep whatever they had operational. So repairmen were always busy.
The other day in a presscon, I asked the DOH officials if they have a way to combat the unexpected consequence of the lockdown which had been circulating as a joke in the social media—the expected population boom after as many of the women would get pregnant having been idle in their homes with their husbands.
DOH-CAR Regional Director Amelita M. Pangilinan was expecting the question, as she said, and she gave a very good answer. Their family planning program efforts are good even during calamities or emergency situations, and that this month of rest should also give childless couples a chance to have an offspring. Certainly. Sometimes the stress caused by our materialistic viewpoint can prevent many women from getting pregnant even if they are economically well-prepared for it.
She also said that those conceived during the COVID-19 lockdown might soon be called Coronials.
Then there is that other joke which can also be realistic. Police reports indicate that crime rates greatly went down. What went up are reports of husband and wife quarrels, and perhaps other forms of domestic violence. So it is true that the devil resides in idle minds.**