The following is an excerpt from an article on “the COVID-19 pandemic and the Caribbean”:
By Winston Dookeran
The coronavirus crisis has induced a supply shock – reducing wages and production- which in turn fuel a demand shock – fall in purchasing power. This becomes ‘loop type’ cycle of shocks. In growth models, shock absorbers mitigate the effects on growth. But buffers and shock absorbers are weak in the Caribbean economy.
Shocks are absorbed through adjustments in labor and austerity. But that will work, depending on the magnitude of the shocks. Already, it is argued that to prevent an immediate collapse, the size of the fiscal injection must be equivalent to the fall in the GDP. This is a tall order in any circumstances but has dire complications to debt, credit, incomes, and poverty levels. This is above the cost implication of financing modes used and the prospect of recovery in a loop-like cycle. We are in unchartered waters, and the choice between ‘lives and livelihood’ could soon be a harsh reality.
Credible analytical leadership is called for, and universities must become truly rigorous and entrepreneurial. Changes in research priorities and teaching methods initiated in this ‘non-normal’ period will likely remain permanent as the economic metrics change. This will call for new systems and a switch to the digital world. International mobility of students – as the middle class gets hit – will put at risk the outreach programs for higher education’s reach into the global marketplace. These and other changes will spur entrepreneurial outcomes within the university system.
On the wider front, new drivers of industry change may arise – more use of digital transaction, innovations in public hygiene, changes in the way the travel and tourism sectors operate, security of production of food and medicine, wider corporate goals and a truly entrepreneurial University could be the changing imperatives of our times. New research agenda, priorities for institutional progress, infrastructure for teaching, and governance systems will all shape the curve ahead of us. This will augur well for the relevance of the University to society and the revitalization of development.
The COVID 19 pandemic cannot be solved by internal efforts only. Global coordination and diplomacy are needed to add new resources – technical, business and financial- to the solution matrix. The G 20 countries began to talk, but much more is required to get a coordinated global economic response to the uphill tasks ahead.
The Working Group of the Caribbean established as a doorway to the G20 could be revived to provide a Caribbean voice to the global financial demands. In addition, the SDR’s window of the IMF must be redesigned for ‘fair share’ in the application of the immediate balance of payment resources. These and other initiatives require too, an entrepreneurial approach to diplomacy.
The Foreign Affairs Review, in its March 31, 2020 issue, writes that the ‘UN Security Council Must Act’ and declare COVID-19 a threat to international security. While admitting that the WHO is ‘ the technical focal point’ for a pandemic response within the UN’ but it lacks the authority ‘to cut through political obstacles’ that will hasten international cooperation and allow the UN ‘to manage engagement with the World Bank and the IMF as well as informal bodies like the G7 and G20”. In such a declaration, the Caribbean will be able to muster some diplomatic leverage, in the everchanging geopolitics.
(Winston Dookeran is Under Secretary General, EUCLID University,Professor of Practice,University of the West Indies and former Minister of Finance,Trinidad and Tobago.)