News & Events

World news - 25/05/2020

Mazel Tov – the lockdown is thawing

Author: George Mangion
Published on Malta BusinessToday 21st May 2020

Mazel Tov - the lockdown is thawingThis week’s announcement that restaurants will reopen on Friday and people may gather in groups of up to six, comes as welcome news to business in lockdown. Others to open are barbers and hairdressers as well as the resumption of non-contact sport.

Why this sudden thawing of the lockdown?

Health Minister Chris Fearne said that the risk of a tsunami overwhelming the health system had been managed and turned into a stream thanks to early action and hard work. He feels that Malta had managed to control the pandemic because the vulnerable and others stayed at home, while thousands of businesses were ordered to shut premises and offices. Most set up virtual working for white-collar workers and to stay at home.

Such businesses, have suffered losses and had to borrow from banks or use their own cash resources to finance wages while productivity suffered and regrettably some sales orders were cancelled. Last March, the government introduced a quarantine period for all arrivals, effectively killing off the tourism industry. All flights were suspended bar those for repatriation and cargo deliveries.

Least to say, that the worst hit were the hotels and food servicing sector (although they were the first to qualify for state subsidies). Now, closed for the past three months with zero revenue, MHRA the union for hotels and restaurants are warning that Armageddon will follow unless the airport is reopened. MHRA urged the government to steer towards reigniting the economy through the tourism sector whilst ensuring reasonable safety measures for staff, employees, and residents.

Quoting a recent EY report, states “An economic recovery is realistically expected to take between three and four years”. There is a widespread belief that “aggressive rate-cutting” in hotels will be adopted in the coming months as a result of beds oversupply and low volume of tourists. Meanwhile, in comments to Times of Malta, director-general of The Chamber of Commerce Kevin Borg said the members felt that “the country was at times given incomplete and non-assuring messages”.

Such inconsistencies occur when people were told that they could go shopping for non-essential items but were at the same time encouraged to stay indoors and apply strict social distancing rules. Such frenzied directions have hit the retail shops badly – they over-night had to set up protective plastic barriers at their counters and only serve customers one at a time.

The public in general is still fearful of going out even though there are others who abuse especially over the weekend when social distancing is not strictly followed. Some offenders are worse than others, but no one can excuse them that they are not at risk of getting sick and/or dying from Covid-19. Malta has so far only suffered a small number of mortality cases. There is a surreal feeling of AC (after Covid-19) meaning that as the authorities ease restrictions, the young quickly forget the risks and venture out without following the WHO health warnings.

We all have our coping mechanisms on how to deal with Covid-19 mortality. Everyone wants to go to heaven but nobody wants to die.

There is a feeling of déjà vu in the air as people simply feel there is a limit to how much they are willing to sacrifice for the health of others, and that they have decided, on a personal or societal level, that we have reached that limit of personal sacrifice. One is conscious that Malta is famed for its clear water blessed with well-kept sandy and rocky beaches. Now, with the airport closed such amenities are not shared with three million visitors – so this fact adds to their beauty. No beaches were officially closed but social distancing and wearing of masks are obligatory. Last weekend, beaches and public gardens were packed.

As can be expected, school children being so nervous during the lockdown, (some cocooned in a small space in apartments for the entire week) are eager to venture out and meet their peers. Obviously, this brings in the argument that parents are suffering from working at home and caring full time for their offspring. Most, are looking forward to flouting the health warnings once the “R” factor drops closer to one. Quite a few are grudgingly speaking of the Covid-19 experience as if it has stolen a good three months of “normality”.

They are fed up hearing about other countries’ fatalities and wish to move forward. This is wishful thinking as the stark facts are that the virus has not disappeared. No vaccine is yet fully tested and available overnight in millions of doses. Our Health Superintendent warns us to be cautious. There are still people with the virus in hospitals, at home, and even walking around undiagnosed who will inevitably pass it on to others. As can be expected, the Health Ministry is saying it is too early to fully open the airport, but other ministries are less sanguine. People are feeling the pinch of low incomes.

Businesses are limping, barely surviving in spite of government wage subsidies, as export orders are down. Professional firms are feeling the pinch of poor cash flow – the inevitable layoffs will follow unless lockdowns are eased. This fuels the underground economy. According to Eurostat, Malta’s shadow economy at about 24 per cent of GDP is one of the biggest in Europe – bigger even than that of Italy and Greece.

During hard times when unemployment is rising, it forces more people to work in the shadow economy, whether foreigners or locals. It is all very good to calm people saying that only through personal sacrifices and closure of major businesses that we can flatten the Covid-19 curve. We may have flattened the curve, but that came at a high cost. Doctors warn us that the curve will resume an upward climb unless we maintain vigilance. The trade-off with observing health warnings or maintain our sanity and economic prosperity is a tough cookie.

Ask anyone in the high-risk category, like pensioners and they agree to maintain the status quo – that is to be careful now, not less. With everyone else – the people are watching their prime minister telling them that he is well advised to carry out gradual easing of the lockdown. His golden words are – there must be a summer this year.

The scenario is risky but politicians want us to feel safe and relaxed. Perhaps, this throws caution to the wind as more feel less not more vulnerable than before. It does not help to hear that the “R” factor is less than three, because we all know how quickly the virus can spread.

Doctors are reminding us that people can be asymptomatic carriers or only develop symptoms days or weeks after they contract the virus. Simply wearing a cotton mask (not an N95 type) does not shield us from Covid-19 but under false security, wearers feel snug – they fail to comply with social distancing rules.

As a final word of caution, Malta moved up to the top twenty nations in the global world metre scale for Covid-19 cases, having twice the number of daily cases per population when compared to Italy, Spain, and Germany. A Mazel Tov celebration is too early for us.

George Mangion

 

Author: George Mangion
Published on Malta BusinessToday 21st May 2020
Get in touch: info@pkfmalta.com