Time to restructure the way we do business

by Curlan Campbell, NOW Grenada

  • Global recession may likely be the result if present trends continue
  • Grenada imports over a billion dollars’ worth of items annually
  • Social distancing could become standard public health protective mechanism and new socialising mode

The possibility of another global recession may likely be the result if the present trend of stock market freefall, increased travel bans, and cancellations of several major events continue, said Strategy Consultant, Dr Stephen Fletcher.

Should the prediction of Dr Fletcher be correct, this could mean that small island developing states with fragile economies like Grenada can be severely impacted since it affects both sides of the economic supply and demand chain.

Dr Fletcher made the case that since the People’s Republic of China can be considered the global economic centre, then disruption of their economy can have multiple ripple effects on a global scale. “It is estimated that the coronavirus could cost the global economy as much as US$2.7 trillion. We are now seeing the impact on cruise ships and on travel. In the UK, for example, Flybe, one of British Airways subsidiary companies, has gone bankrupt because of the coronavirus which led to massive cancellations of flights.”

Dr Fletcher said some businesses have already reported that importation of goods has started to slow down and if the pandemic continues to escalate this can have a serious effect on the local supply and demand chain. “Grenada is heavily dependent not just on tourism for its survival, but for our daily consumption of food, because we import over a billion dollars’ worth of items annually. So, what is the effect of a global slowdown? It means that our imports are going to decline and therefore it is going to affect the supply of products in Grenada.”

The question arises: Could Covid-19 signify an end to daily life as we know it? Dr Fletcher certainly believes this to be the case and is of the opinion that a major shift in the financial landscape and the way we conduct business is imminent. He has made several other predictions that could possibly come into effect if the spread of the virus continues and urges the authorities to embrace the opportunities these new changes can bring by putting the necessary infrastructure in place to accommodate such changes.

One of his predictions is the decline in the need for paper currency and the upswing in the use of digital currency since cash transactions could promote the spread of the coronavirus. “Social distancing is likely, in the short run, to lead to consumers adopting online trading, including purchasing of basic products. This growth in online businesses ought to be matched with the appropriate payment mechanisms, which is not necessarily using credit cards. Additionally, consumers would be seeking to reduce their interactions and use of cash. The solution is to have digital currencies. This allows consumers to reduce their interactions with cash and handlers of cash,” said Dr Fletcher.

He stated that based on the pandemic trajectory, social distancing would become the standard public health protective mechanism and as a consequence, the mode by which we socialise in order to acquire or satisfy our needs would change. For instance, the emergence of stricter travels bans between countries can see the rise in the use of eCommerce and eTrade will be alternative modes for conducting businesses.

“At the local level, the Food Fair has led the way in its launch of its eStore, where they provide a web store, linked to their supermarkets. Given the current global trajectory in retail businesses, one expects the holding company (Jonas Browne & Hubbard’s Ltd) to expand, this service to cover all its departments. Additionally, in the medium to long-term, restaurants would have to rapidly move up the digital food-chain and reorganise themselves to become service delivery operations.”

He also predicted that the rise in eLearning can become the new norm for Grenada. “We would likely see the impact of eLearning. You heard of a number of schools in the US that are now venturing into eLearning as a result of the spread of the coronavirus. We in Grenada will have to begin to think and put things in place for that kind of eventuality because as time goes on these viruses will come.”

Most importantly, Dr Fletcher is advocating for Grenada to put in place a plan for food security. “I think it’s an opportunity for us to really conduct some structural changes in our economy. One of those will require us to go back to agriculture and to begin to produce more of what we need to ensure food security.”

As of 18 March 2020, Grenada has expanded its list of countries where travel restrictions apply. These countries include all of Europe, the United Kingdom and Ireland. Travel restrictions were already in effect for China, Iran, South Korea, Italy, and Germany.

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