The economic system imposed by globalization has progressively ignored the real concerns and needs of citizens.
In the European Union, the governments of member states have been adopting labour rights cuts, the privatisation of health care system, salary cuts and promoting private pension schemes into their economic policies following the advice of the market economy. Instead of designing fiscal adjustment policies applied to those who generate the most profits, governments have put the pressure on social cuts. In a subtle way, the multinationals have been putting pressure on governments to carry out social, labour, health and cultural adjustments by pointing to public spending as a problem.
The COVID-19 crisis is highlighting the shortcomings of an economic system that will necessarily have to change in the future. For almost two months most of the world’s population has been thrown into a quarantine without any precedent in recent human history: closed shops, factories on standby, paralyzed transport, closed borders and confined populations that have transformed a world used to haste into a world forced to hear the cranks of the clock inside their homes, with nothing on the horizon other than the hope of defeating the pandemic.
In the crisis of COVID-19 there are many who call for an urgent return to economic activity. On the one hand, public authorities feel pressured by citizens who need to recover their jobs, economic income and freedom of movement. On the other hand, public authorities are also pressured by large companies that have been forced to reduce their productions, close down their factories and as a result have drastically dropped their profits.
Faced with the impatience to show positive economic results to their investors, it is the large companies that put the most pressure on the governments by alerting them to the economic losses, massive layoffs, drops at the stock markets and the negative consequences for economic recovery. Governments are being forced to minimize health risks in order to return to what the globalized world understands as normal, that is, the world of unlimited economic growth at the expense of any other value, including health.
In Africa, despite the fact that the number of infected and victims is lower than in other continents, the COVID-19 crisis is endangering the lives of the most vulnerable. The health crisis caused by the pandemic could become a serious social and economic problem for Africa. The economic characteristics of the African continent make them dependent on rich countries. Most of the countries in Africa depend on the economic income from exports of their natural resources such as oil, iron ore and copper. The demand for such raw materials has fallen dramatically by developed countries.
In the case of oil, the demand has fallen from international refineries, and the prices have drop out as never before. The price of oil has become negative due to the inability to store excess production in refineries. Other agricultural products and commodities are suffering from a drop in production or are stored due to a decline in new demands or are blocked at seaports due to international transport and customs restrictions in importing countries.
The spread of the pandemic both geographically and temporally has an economic impact on Africa that will mainly affect the most vulnerable through the decisions of politicians. Therefore, in view of these realities, political decisions in times of COVID-19 must have as their only concern the health and food security of the population, ensuring the social and labour rights of workers.
Any political decision that gives priority to the economy over health will bring more problems to the most vulnerable, especially in developing countries, and prolonging the consequences of the pandemic; it will increase the health crisis and deepen economic inequalities. Therefore, decisions must be agreed upon by all political, social and economic actors. More than ever, governments must focus on the public interest and respect democratic spaces in decision-making.
The race to find a vaccine against COVID-19 must be an international strategy coordinated by the World Health Organization (WHO). The vaccine cannot be a privilege for rich countries or an advantage for those pharmaceutical companies or countries that discover it. More than ever the pharmaceutical and health industry must be at the service of the entire world population and the common good of the humankind.
Companies must be committed to fighting the pandemic. The different productive capacities and their distribution channels must be oriented to the service of the citizens in everything that the public authorities may demand of them. Likewise, companies must respect all health standards in the prevention of the pandemic and guarantee the health of their workers. Companies that provide essential public services such as health, water, electricity or telephony must adapt to the needs of the population and their economic situation.
Multinational companies have a duty to support the local communities in which they have operated prior to the pandemic, supporting through national programmes all initiatives that help to alleviate the economic havoc it may cause. In this regard, the United Nations has made an international appeal to the private sector to mobilize all its economic resources in the service of those most affected.
The responsibility of companies cannot be limited to economic donations but they have to develop all their capacities to ensure that the workers do not lose their jobs, supporting the education sector through solidarity educational initiatives and supporting families with less economic resources. Banks and financial institutions must apply moratoriums on payments as well as a reduction in interest in cases where the pandemic has left them without economic resources.
Combating the effects of COVID-19 depends on everyone’s efforts according to their abilities. More than ever, companies must show their social function as a source of wealth but also their responsibility and commitment to the health and worker rights. Governments and companies have to work together around the world to build a human economy that truly matters to society, rather than fuelling an endless pursuit of profits, investing in national care systems to address the damaged caused by COVID-19 and introducing progressive taxation, including taxing wealth and legislating in favour of workers.
(José Luis Gutiérrez Aranda,Trade Policy Officer, Africa Europe Faith and Justice Network, AEFJN)