Innovation necessary for us to survive global depression

04Sep 2020
The Guardian
Innovation necessary for us to survive global depression

​​​​​​​STAKEHOLDERS in the country have been making spirited efforts to increase production through more efficient use of resources, this especially in the wake of the Covid-19 treacherous moment in the country’s economy.

While there is a fleeting perception that the country’s economy has been hit hard by the outbreak, there is no denying that the amount of real suffering here has been much less than elsewhere.

It means that the work our public and private sector stakeholders need to do to return to normal isn’t insurmountable. What is likely to be more difficult is to adapt to trends that are seen in world economy.

This is particularly in terms of what they represent for local and wider demand, since the country’s economy isn’t self-reliant on what it needs and what we produce.

Rather, plenty is dependent on what the outside world needs or doesn’t need, can buy or cannot buy, and implicitly the same also applies to local markets, though in a different context. The bottom line is that wider global trends determine the usefulness or appropriateness of local initiatives.

One particularly unnerving aspect in global economic trends is that many countries are experiencing a drop into depression, which means intense decline of economic activity registered over a short period, for instance two successive quarters of intensely negative data trends.

A number of large economies like India, South Africa and Brazil, which along with Russia and China were at some point forging an economic consultation group, have registered a decline of between 15 per cent and 25 per cent in economic activity owing to extensive lockdowns induced by Covid-19.

We need to remind ourselves that it is to these very countries that our exports are geared and from which we expect to get tourist flows, etc.

This implies that the situation is by and large unpredictable and, without doubt, the various sectors won’t all succeed in their objectives like those which shall encounter fewer obstacles to realising export or other foreign-based inputs.

All these shall need the broad attention of policy makers as to what they can do to put things right, in what really is uncharted territory.

The government remains the key instrument in outlining what is expected in economic trends and the adaptations to make. Still, it is vital that different sectors read the signs of the times and, where needed, take appropriate steps to introduce corrections.

However, it isn’t always easy for heads of public organisations to stand up and admit that much of what they are doing is immersed in obstacles owing to declining demand and ought to be shifted to something else – say, another product line.

Such difficulties once characterised our country’s economic thrust, thought problems in relation to the wider atmosphere of resource allocation and accountability were different from what we have at present.

Corporate bodies continued to climb a steep hill of production objectives in total absolution from the input and output factors in what they were doing. In fact, time came when the breadth of the public sector immersed in production had to be liquidated, minus a few rather valuable firms.

We still have a strong presence of public sector productive entities remain, which calls for a lot more than a simple push for more production for those entities to remain afloat – and relevant.

How we make them move in the days, months, years and decades ahead will have to be appropriately calculated, with present-day realities and demands carefully considered and therefore providing lessons we have to learn from.

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