Although T&T’s budget deficit is expected to triple, moving from $5 billion to $15 billion, as a result of the COVID-19 pandemic, the more important facts to consider are the secondary impacts that are incurred due to the virus.
This is the contention of the University of the West Indies (UWI) Economics lecturer Dr Marlene Attzs.
During a Virtual Symposium hosted by UWI, Attzs said: “The challenge is not simply direct economic costs but more so the need to unearth the secondary, indirect impacts for this pandemic to gain a full understanding of its effects so that appropriate policy responses can be crafted.”
Attzs highlighted that the country would be impacted as global supply chains are disrupted because the country imports an average of 50 per cent from the United States, China and Europe.
The economist also highlighted that the health sector would have been impacted as well, as the country would have had to spend significant expenditures to fund additional debt. Although Attzs disclosed that the debt that the country would incur is not sustainable, she indicated that T&T is facing an unprecedented situation that would take more spending than usual to address problems that arise.
Attzs indicated that the country will also be hit by lower and declining economic activity and significant levels of unemployment. And while commodity-based economies like T&T and Guyana would be affected drastically, the revenues of tourism-based economies can decline by as much as 50 per cent.
According to Attzs, many things are quantifiable during COVID-19, but the things that cannot be quantified can illuminate flaws that can be highlighted.
She noted that arising from the lockdown, it is apparent that data on the small business side is “sporadic”. Attzs argued that there is a dearth of information as it regards to small businesses. She noted that the multiplier impact on small businesses might not be quantifiable, as a result of the lack of available data.
Another flaw, highlighted by Attzs lies within the mandate or protocols concerning the avoidance of contracting COVID-19: social distancing and washing hands. She indicated that this argument assumes people have a space in which they can be socially distanced and have access to water to wash their hands.
Attzs also referred to Dr Sandra Reid’s presentation on the psychological impact of social distancing. Reid noted that social distancing can begin to have an impact after some time as a virtual connection is not an adequate permanent substitute for face to face interaction.
Also speaking at the symposium was Dr Stanley Giddings who noted that social distancing was very effective during the time of the Spanish flu in 1918. However, Giddings highlighted that relaxing the non-pharmaceutical intervention (social distancing) too early can result in another wave of the virus.