By Dr Marlene Attzs, Economist
Like many, I am keeping check on what is happening globally in this unusual season. To witness economic superpowers struggle with the pandemic, even more than we in the developing world, has been a surreal experience.
The rate of infection and the death toll has been staggering in many countries including Germany, England and of course the USA. As of April 15, more than 130,000 people have died worldwide in the COVID-19 pandemic, with more than two million cases reported, according to data from Johns Hopkins University. The United States is now the outbreak’s epicentre, with more recorded deaths and reported infections than any other country.
Our reality at home is that T&T is grappling with a double dose of crises—historically, lower energy prices AND the pandemic. Comparatively speaking, our response to the pandemic has been worthy of commendation.
Earlier this year, I suggested it is difficult to delink the COVID-19 from the global conversation on oil prices. And it has come to pass. On April 20, a friend in the USA who drives a high-end SUV told me she spent US$20 on fuel for her vehicle. Last week it cost her US$50 to fill the tank.
The lower gas prices are a result of the ‘collapse’ of oil prices—another victim of COVID-19. Put simply, the shutdown of major economies and travel routes to curb the spread of the virus has decimated demand for oil (and consequently fuel) as transport has ground to a halt.
Notwithstanding the slowdown of transportation, oil producers have continued to pump crude onto the market leading to a misalignment between oil supply and demand. The result is ‘negative’ oil prices—no-one wants to buy oil now, so sellers are willing to pay you to take the product off their hands. The world is now witnessing the biggest slump in oil demand for decades.
There is little doubt that as an oil-producing country T&T’s recovery post-COVID-19 will focus on building economic resilience. I also posit that T&T’s recovery should be multidimensional focusing on some of the following intersecting, albeit challenging issues:
We must accept that rebuilding a resilient T&T post-COVID-19 will be a long-distance run not a sprint. Running a long-distance race is not for the faint at heart and requires preparation.
T&T has never had to deal with a fallout with the magnitude of this double crisis. To achieve a successful outcome at the end of that ‘run’ will require astute leadership, discipline, and collective commitment to national development. It also will require an unequivocal understanding that the road to recovery must be paved with more than good economic and business intentions, lest we rebuild or deepen inequalities and inequities.
Good economics is about people.
That’s just my point of view.