Solution for the pandemic economic crisis

As I have foreseen, the pandemic has led to an economic crisis. We are currently in a recession and it can potentially led to a great depression if we do not handle the crisis effectively.

I am not a professional economist or a strategist but it’ll like to share my 2 cent.

Essential points:

1. Ensure essential services (especially food) and supply link are maintained: 

Maintaining essential services (especially food and medicine) is priority. The the supply chain link is disrupted when agriculture supplier is left with plenty of food not purchased as restaurants has closed down or has significantly demand to eat out has significantly reduce.

We risk the danger of food shortage crisis if the food supply food supply are destroyed when the food demand has not fallen but have changed outlet such as via home cooking, home delivery and takeaway.

We need to have platform and system (apps or website that connects vendors to new buyers) needs to be set up so that food product can be sold to new outlets such as grocery store, takeaway and home delivery business. The vendor may need to consider selling directly to consumer customers and not only to retail businesses.

Preserving food via drying, pickling and canning is also an excellent way of not wasting food whilst having inventory to sell at a later date. I also encourage being self sufficient by planting our own vegetables.

In addition, logistic delivery system needs to efficiently and readily adapt to the new change of route.

2. Focus support on the vulnerable citizen:

It is important to provide support for those who are in a financial disadvantage. This does not only include low income individual but also middle class living pay check to pay check or those with little savings. It is important to provide a safety net for those who are most affected.

It is important for the government to provide financial support to ensure individual have basic income for essential goods and shelter. Regulation should be put in place to ensure deferred payment in rent or loans until the economy gets back on track. Government should also work closely with charitable projects such as food bank and homeless shelter.

Some business has already displayed impressive act of generosity. This includes real estate renting some accommodation for free. Some businesses provides free food for hospitals and food bank. These act of kindness is also great for reputation and public relations.

It is important to put humanity first over profits during this critical crisis. Businesses may become bankrupt and wealthy investors may lose profit from the investment stocks, but these are not life threatening situation. It is important to prioritise those who are financially at a disadvantage and allocate food and shelter accordingly – prioritised allocating resources where it is needed the most.

How to get back to recovery:

1. Create a new international financial institute:

The current financial institute has not experience a pandemic situation before, and their system and process has proven not very efficient in these times of crisis. A new international financial institute should quickly be set up that is adjust to the pandemic crisis.

A more centralised and integrated system is more efficient in analysing data, allocating funds, networking and providing the right support. Time is of the essence and we want to reduce as much paper work and bureaucracy as possible.

2. Mask, sanitiser and subsidies hotel:

Ensure mask are worn in crowded public space and any enclosed public space such as grocery stores. Have hand sanitiser free and readily available in retail space.

Subsidise hotels for vulnerable people who wish to be isolated or for healthy young workers who are concern of putting their vulnerable family at risk.

4. Businesses must adapt and be more cost efficient:

I will explain with examples below.

a) How should business adapt?:

Introduce protective equipment in public retail area such as counter shield, free hand sanitiser, ensure adequate ventilation and have mask readily available. To keep the number of customer in safe number, introduce reservation service and if necessary increase the working business hours to space out the capacity customers.

Go online! Consumer are now shopping online and ordering home delivery food. There are plenty of online platform. Setting up live stream shop to interact with customers is also a great idea. Increase your online social media presence. Start using those hash tags!

Set up online platforms to help vendor find potential clients. This is especially be useful in the agriculture industry to reduce food wastage.

Business needs to change and adjust to the current new demand. For example, alcohol brewery can help with sanitation production or clothing company can produce fashionable mask.

b) How to be more cost efficient?:

A major problem is when the economic down turn expenses exceeds profits.  Here are ideas to help cut cost:

Downsizing workspace: As rent is probably the most expensive overhead, get a downsized and increase remote worker. Restaurant can downsize into smaller space or even food trucks.

Shared workspace: co-working space or shared kitchen space will significantly cut cost.

Shared worker: this is a new concept but it’s pretty effective. Despite the fall of many industries, other industries are booming and in need of staff.  Instead of letting go of you staff, temporarily lend them out to other companies. It’s a win win situation, as the you can keep your staff, make commission profit, allow your staff to develop new skill sets and experiences and essentially save time from hiring and training new staffs in at later date.

5. Keep a close watch on the scientific studies and be ready to pivot & adjust:

Keep a close eye of the studies of the virus and the health care data. As it is still during the early period, it is best too approach the situation with extra caution. We need to be patient and wait for more research studies and adjust accordingly to the severity of the nature of virus, it’s infection rate and any potential long term health implication.

Food for thoughts:

The market world is very competitive, with a staggering 95% fail rate within five years. Imagine the impact with pandemic. On a positive note, this will give opportunity for new businesses to grow and flourish where there are demand.

Regardless of what happens in the unpredictable market, it is utmost important for the government to prioritise it’s support to community, especially those who are in a financial disadvantage. Ensure everyone will have access to adequate financial support, food, shelter and healthcare.