Diplomatique.Expert - No. 25 - Malta's only International Affairs eJournal by CorporateDispatch.Com

Diplomatique.Expert Issue No.25 | 25 March 2020

An eJournal of GeoPolitical Insight & Views

2 YEARS

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Diplomatique.Expert Issue No.25 | 25 March 2020

An eJournal of GeoPolitical Insight & Views

EDITORIAL TEAM Jesmond Saliba Tonio Galea Denise Grech Matthew Bugeja Keith Zahra Claire Hollier

DESIGN TEAM Matthew Borg Nicholas Azzopardi

Produced Photos Design Published By

Editorial

Faith, Hope & Charity Many political leaders around the world have declared their countries ‘at war’ with the coronavirus. The power of that the message may not resonate with the same effect in countries which, like Malta, do not have a pronounced military tradition.

In fact, the notion of war in Malta is more likely to conjure up images of life under siege, tapping into our collective memory of the two outstanding fighting events that continue to shape our national identity. The difference in emphasis between ‘war’ and ‘siege’ is striking: going to war is an all-out attack against an enemy; to be under siege means to defeat an intrusive threat.

In the past month we as a nation have banded together to shelter each other from the raids of coronavirus. Business leaders were on the frontline with trade unions and professional associations to come up with concrete proposals and offer expert advice. Political leaders and media houses toned down the battle of wits we have come to expect between them and are ceaselessly working together to double down on disinformation and keep the public in the know.

Communities have been quick to recognise siege heroes – people who act with valour to improve the situation of others. And there has been no shortage of professionals and other individuals who have gone out of their way to make sure that necessities are provided without disruption and arising needs served with dignity.

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In the face of the devastating outbreak, Malta’s siege narrative lends itself perfectly. Like the humble Gloster Gladiators that in World War II saw off wave after wave of the formidable Italian air fighters, our nation is meeting the coronavirus challenge with faith, hope and charity.

On this day, two years ago, round about this time, Corporate Dispatch shared its first post. It started as a blog relaying foreign news. It was the corner-stone of a transformation process which Corporate Identities embarked to become an advisory firm built around communications, inspired by the vision to be a ‘lighthouse’ when ‘disruption’ was a buzz-word used in various fields.

The past two years saw it grow, and so did Corporate Identities, which evolved into CiConsulta and part of the Corporate ID Group.

True to the over-all mission of the activities we carry, the team behind all our activities is committed to create greater social value, by being enablers of meaningful communities through meaningful communications.

We believe in the media, and ensured that we complement and support the local media wherever required.

We teamed up with the Faculty of Social Wellbeing to become their voice in their work and formed Societas.Expert. We teamed up with Bugeja Geopolitics Consulting to form Diplomatique.Expert. We also entered into an agreement with The Synapse to provide the Medica.Expert. The last piece will be the Economia.Expert, which will be launched in the coming days.

These all form part of the Corporate Dispatch pro. We provided our professional service to a myriad of important companies in Malta. We helped them building and creating brand equity by harnessing their human, social, technological and corporate identity’s equities. We engaged with all major stakeholders on the island, namely the Chamber of Commerce, Malta Employers Association, SME Business Chamber, GWU, Office of the President, Dar tal-Providenza, Fondazzjoni Sebħ and more, to see how we can make this island a better place for all its elements.

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These are testing times for everyone. I for first, always believed that Malta is part of a greater world and what happens here then to happen abroad, and what happens abroad tend to come here.

Covid-19 pandemic attests to this.

Our commitment is to be there where required. In view of this, our service will be further strengthened to all our stakeholders, through our timely advice, fact-checked information delivering a local perspective with a global outlook.

As we start another week together and try to keep our routines in place, let as act in the faith that our unified determination is greater than the chaos of the pandemic. Let us make the right decisions to rebuild hope in human integrity. Let us live in charity towards one another so that we may all share in the abundance of wellbeing that awaits us when the siege is lifted.

YOUR TEAM AT CICONSULTA Shirley Zammit, Isabelle Micallef Bonello, James Vella Clark, Nathanael Muscat, Tonio Galea, Laura Grima, Keith Zahra, Nicholas Azzopardi, Matthew Borg, Denise Grech, Matthew Bugeja, Jesmond Saliba

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Life under lockdown Here’s what could be in store for Malta I realised the Belgian lockdown was serious when Brussels police stopped me from sitting on a park bench yesterday.

On Wednesday, Brussels announced a ‘partial lockdown’ from March 18 until April 5. We’re only allowed to go out to the supermarket or pharmacies. Like Malta, universities, public libraries, gyms and restaurants are closed. Some shops stayed open for take-away.

We’re encouraged, however, to go out for a walk or run at parks every day. Minutes after I sat on a bench at the park with my housemate, a cop pulled over and shouted through a megaphone that I wasn’t allowed to sit.

It all felt very dystopian and terrifying. My friend and I went home feeling uneasy by the interaction. We also knew this wasn’t the worst it was going to get. Belgium and Malta haven’t even reached the peak of coronavirus cases yet.

It’s day three since the lockdown was put in place, but it feels like day 30. University classes are still being held online, papers are due in weeks and schoolmates are suddenly moving to their home countries. This whole month has felt like a rollercoaster.

Announcing a lockdown in France, President Emmanuel Macron insisted “we are at war”. And it does feel like that- like we were

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called to fight overnight. We were forced to reschedule our lives and get used to new routines for a war we have no control over.

On top of this, some restaurant owners and freelancers have had to grapple with not having a paycheque this month. Parents had to readjust to taking care of their kids while at work, teachers had to adapt lesson plans.

It’s an uncertain and scary time. But social media has proved to be surprisingly comforting. Posts applauding health workers have made people feel closer than ever, despite the physical distance.

Nowadays, please don’t forget that everyone is inside their heads trying to gain control over a very uncontrollable situation. Staying at home to protect your physical health is critical, but don’t forget your mental health.

Stay safe and reach out if you’re feeling lost. Until we get out, stay hopeful.

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CommuniqEU

GENDER EQUALITY 2020 is a pivotal year for Gender equality. This is the key message highlighted by the European Parliament as it celebrates the 25th anniversary of the adoption of the Beijing Declaration and Platform for Action (BPfA).

In its statement, the EP noted that 25 years after it was adopted, women’s rights and gender equality have not yet been realised. No country in the world has fully achieved equality and empowerment for women and girls. Women in Europe and around the world still face numerous challenges, some of which are newly emerging.

In its statement, MEPs reaffirmed their commitment to the BPfA and to the full range of actions for gender equality outlined therein and noted that working to achieve women’s rights and gender equality demands a coordinated and multisector approach that involves all relevant stakeholders, including civil society and women’s organisations as well as the business world.

The Parliament expressed its intent to continue to fight for a strong leadership role in achieving girls’ and women’s rights and gender equality in the European Union as well as at a global level.

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CommuniqEU

FINANCIAL SERVICES The European Banking Authority (EBA) has launched a call for expression of interest for membership to its new Banking Stakeholder Group (BSG). The mandate of the current members will expire on 30 June 2020.

The call for expression of interest is open to candidates representing stakeholders across the European Union. The deadline for application is 3 April 2020.

The BSG is set up according to Article 37 of the EBA Founding Regulation, to help facilitate dialogue and consultation with stakeholders on the work of the EBA. The final decision on the composition of the BSG will be taken by the EBA’s Board of Supervisors by mid-June 2020. Applicants will be informed accordingly by the end of June 2020 and the composition of the new BSG will be made available on the EBA’s website.

Interested parties which can express their interest are financial institutions, including savings banks, consumers, users of banking services, representatives of SMEs and top-ranking academics.

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CommuniqEU

AFRICA

The European Commission and the High Representative for Foreign Affairs and Security Policy have launched a detailed proposal outlining a new strategy with Africa.

The EU’s efforts focus on greater cooperation in five principal aspects: environment, digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.

Based on this document, Europe will engage discussions with African partners towards a new joint strategy to be endorsed at the European Union – African Union Summit in October 2020.

The renewed cooperation on the partnerships around the five areas proposed today will build on an ongoing dialogue with African partners, which will be taken forward ahead of the next EU-AU Summit in Brussels in October 2020 in view of defining joint strategic priorities for the years to come.

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CommuniqEU

HEALTH

In its continuing efforts to protect citizens and to coordinate the response to COVID-19, the Commission has taken immediate steps to protect the availability of supplies of personal protective equipment (PPE), by requiring that exports of such equipment outside of the European Union are subject to an export authorisation by Member States.

Personal Protective Equipment covers equipment such as masks, protective spectacles and visors, face shields, mouth-nose protection and protective garments. There are vital needs for protective equipment within the Union with regard to hospitals, patients, field workers, civil protection authorities.

This implementing act, adopted by urgency procedure provides for authorisations for exports to third countries. It will be valid for a six-week period, during which Member States will be consulted on the potential adaptations and scope of the current measure and future steps.

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CommuniqEU

INDUSTRY Technologies (KETs) have been identified as drivers of the industrial and digital transformations of Europe in the European Commission’s new Industrial Strategy for Europe. Photonics – the science of light generation and manipulation – and a whole host of Key Enabling

KETs will have a key role to play in helping Europe build a more circular economy, become a climate-neutral continent, uphold a global level playing field and develop a deeper and more digital single market.

The ambitious strategic document sets out plans for the future of Europe’s digital transformation, security and technological sovereignty by 2030. The announcement of the strategy comes as a boost for the European photonics industry which is estimated to be worth €70 billion, directly employs over 300,000 people and is the second-highest manufacturer of photonics equipment globally.

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CommuniqEU

MIGRATION The European Commission has increased support towards Greece which is facing the twin challenges of the spreading of COVID19 as well a tense situation in the border with Turkey.

With regard to the latter, the EU has announced that besides the two rapid border intervention operations at the land and sea borders between Greece and Turkey, it was allocating financial assistance of up to €700 million to Greece. Of this amount, €350 million was being made immediately available to support border and migration management.

The Commission will propose an amending budget to make available the other €350 million. A number of member states pledged to relocate some of the minors reaching Greek soil from Turkey or to provide support in other ways.

The situation seemed to be heading towards an element of diffusion as a number of migrants at the land border began to be transported back to Istanbul by bus indicating that Turkey was stepping back its efforts to help migrants cross the border.

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A cure in core values It is rare to find a company that does not profess a set of core values these days.

Visit any corporate website and if it misses a section outlining its vision, mission and values, the page is probably still under construction.

Corporate values communicate the worldview of a company and show that a business stands for something beyond its bottom line.

The noble principles that are purported to define a corporate culture often fall into three broad categories: ethical conduct (integrity, transparency, humility, care); commitment to customers (reliability, excellence, innovation, accessibility); and pride in the job (teamwork, passion, ownership, achievement).

If there has ever been a time for companies to demonstrate that their values are more than the product of a boardroom branstorming session, it is the coronavirus emergency.

We are living an unprecedented moment in the story of the globalised world and businesses are expected to play a leading role in the drive towards social recovery. Many corporate values express a company’s interest in the wellbeing of employees, customers and the wider community and the current crisis brings into view the profound interconnection between these three stakeholders.

Nevertheless, inspirational words laser-engraved on office wall plaques will sound utterly hollow unless companies are able to live by their stated values in this critical period. The emergency is an opportunity for businesses to show that their vows of authenticity, customer-focus and team spirit count for something tangible and significant.

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Tough times reveal the corporate character and when the tide finally starts to turn, companies will be judged on their actions throughout the crisis. The coronavirus, therefore, presents a litmus test for businesses and consumers will be watching their behaviour closely, holding them up to the very standards they proclaim.

This is a difficult scenario for management teams who, besides dealing with urgent financial pressures, must also think longterm to protect the brand’s reputation. But core values offer a steady guide in times of disorientation and, today more than ever, companies must calibrate their hour-by-hour decisions with their basic beliefs.

In fact, if brand values have any practical use at all, it is to steer companies in times of turbulence and prepare them for comeback.

While the virus spread rages on, management teams would do well to revisit the ‘values’ tab on their corporate sites to chart their way ahead.

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COVID-19 & financial markets A look at media reports on the performance of financial markets around the world offer a myriad of numbers providing evidence of the blow to the industry as the COVID pandemic continues with its whirlwind of destruction. Bonds and share prices have tumbled, sending investors into a panic frenzy, seeking safe-haven investment and disposing of their assets.

In just four weeks, when the financial world started to come to terms with the realities of the pandemic, the world’s major markets lost between 26% and 35%, that’s a staggering 8 trillion euro wiped off. The New York Stock Exchange has dropped to pre2002 levels – that’s lower than the 2009 international crisis. But the extent of the market impact of the economic repercussions of the health crisis is probably best shown by a startling statement made by oil traders to leading financial service and economy media house Bloomberg. Commenting on the collapse of oil prices – black gold is currently trading at 20 dollars a barrel, down from 60 dollars from the beginning of the year – traders have not ruled out the possibility of negative oil prices. No, that’s not a typo, oil traders are really considering energy prices falling into negative territory such demand has come to a halt. This will mostly undermining emerging markets who depend to a larger extent on the production of oil.

In the context of widespread market disruption, central banks have sought to apply those measures which seemed effective in 2008 – but many financial analysists are arguing might not be enough this time round. All major central banking institutions,

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including the European Central Bank, the US Federal Reserve and the Bank of Japan have either slashed interest rates further to support liquidity or else expanded asset purchase programmes.

Despite these re-assurance, the vast scale of damage left by the spread of the virus has increased concerns about the lack of liquidity in the international credit markets, with debt-afflicted countries suffering a bigger brunt since investors are moving their money to safer locations, therefore adding insult to injury to a number of economies. In this context, we must not forget that the current crisis comes at a point where economic experts were already pointing out a level of fragility with leading economies growing very timidly in the last quarter of 2019.

In the context of the restrictive measures taken worldwide, it was inevitable that businesses involved in travel, hospitality, airlines, healthcare and many retail sectors are facing the worst of the brunt.

But according to global management consultancy firm Oliver Wyman, it is the banking industry that will have the greatest single influence on the economy. Banks may amplify or dampening the crisis according to the way they choose to address it. They will be operating on a fine line, impacted themselves through declining interest rates, significantly reduced economic activities and liquidity challenges as their clients – corporate or individual alike – will start struggling with their loan repayment programmes.

In this context, Oliver Wyman recommends that decisive support to clients is critical to ultimately ensure that these institutions rebound as quickly as possible from this crisis. Banks remain the main source of liquidity for firms. Supportive steps should be tailormade to client’s individual and sectoral circumstances. These might include extension of credit terms and credit holidays in a sustainable manner as ultimately the survival of their clients is critical to their bottom line too. The European banking authorities have already given their go ahead so that banks can temporarily use the capital and liquidity buffers built up in recent time. It is therefore in the banks’ own interested that their client-firms survive.

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Secondly, banks need to invest in their digital systems and make sure their clients are empowered to make best use of these channels. It has been reported that Chinese financial services companies experienced an increase ranging from 100% to 900% in demand for digital services. Banks should therefore ram up their digital capabilities, together with an awareness campaign and callcentre support to facilitate this transition. When thinking about the queues outside local bank branches, one surely understands the wider benefit of this, even in health terms.

It is evidently too early to forecast the longer-term effects of COVID-19 on markets, since the policy response is still in its early days. It is also unclear on how successful governments will be in limiting the economic hit of the crisis and the financial price they will pay to do so. Around Europe, Governments announced multi-billion packages to prevent companies from collapsing, and included loan support and guarantees, tax holidays and subsidies to address employment.

While these solutions eventually worked during the 2008 financial crisis, whether they will be enough during these testing times, which have been compared to a “war time”, remains to be seen.

Despite the measures announced so far, credit rating agency Standard and Poor’s insists that Europe must not solely look at temporary, immediate measures, but start thinking about the long-haul. The consequences of failing to implement the necessary fiscal measures that support a prompt recovery may eventually be significantly longer lasting, leading to what The Guardian has described as a “recession to end all recessions”.

Unfortunately, most of the tools available to governments are national not international. It will be easier to build walls and call of international projects. Yet, at a time where a global recession seems inevitable, the case for stronger international cooperation is stronger than ever.

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Our world on hold It’s been a bit bleak in Brussels these past few days. The Belgian government hardly acknowledged the coronavirus pandemic until last week – its strongest measure was to issue advice to ‘wash your hands’.

The basically laissez-fair attitude prompted this Politico article, by an Italian guy who lived with his family in Brussels. (link here: https://www.politico.eu/article/why-isnt-belgium-in-coronaviruscontainment-lockdown/) He pleaded the government to take action, fearing the healthcare system would not be able to take the strain, like the Italian one couldn’t. The article was accompanied by various Twitter and Facebook posts insisting the government take action to stop COVID-19 from spreading.

And boy did the Belgian government listen. The next day, the country’s nine health ministers (don’t ask), announced schools and recreational spaces (gyms, cafés etc.), would close until April 3. Shops would not be allowed to open throughout the week. This would come into effect Friday at midnight.

Ironically, on Thursday, we thronged the streets of Brussels, eager to enjoy one last coffee or meal at our favourite restaurant. We then confined ourselves to working from home.

Some have fled Brussels altogether. The European Union institutions had already ordered people to work from home before the Belgian government took any action. Interns (called Blue Book trainees) who had planned to move for work were

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asked to remain home until October. The monthly plenary that sees MEPs moving to the Parliament in Strasbourg has been cancelled.

The world, effectively, has been put on hold.

WHAT DOES THIS MEAN FOR THE EU?

The exploding outbreak is partially a consequence of globalisation -free movement has allowed this pandemic to spread everywhere.

But it has also highlighted the importance of coming together.

For communities, the easiest way to do that is using social media to keep in touch.

On a governmental level, the EU needs to come together, now more than ever. We need to show solidarity to the Italian community, whose sick are in danger of not being treated because of the healthcare strain.

We need to show solidarity to small businesses and freelancers, whose paycheque will be hampered by the healthcare measures.

We need to show solidarity to those who live alone or those who have been kept away from loved ones because of the travel bans.

The world as we know it is on hold. Our solidarity doesn’t have to be.

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Reflections on the CORONAVIRUS Since the last time our team at Corporate Dispatch have put pen to paper, the coronavirus situation in Europe has worsened considerably. At the time of writing, being Sunday afternoon (and I would like to sincerely thank our editor Tonio Galea, and chairman, Jesmond Saliba, for being so understanding with us during a time of upheaval) there have been a total of just under 81,000 cases in China, around 21,500 in Italy, more than 6,000 in Spain, and around 4,500 in Germany and France, respectively. These are the cumulative cases, which means that there have been a number of cases that have been resolved, but in Europe, COVID19 has not reached close to its peak yet. The worst is yet to come.

Why is the coronavirus shaking public confidence? Why has it rattled global economies and stock markets? How is this different than the H1N1 outbreak back in 2008-09 and the Ebola outbreak in West Africa in 2014?

In short, COVID19 is fast and stealthy. It can hide its symptoms for up to two weeks in an infected host. It is unclear just how much a person who is not showing symptoms can spread the virus, and to how many people. This has been a source of some debate over the past weeks, and I cannot provide any reliable information on this point, so it is best to continue researching it yourself. But what is certain is that given its two week incubation period, the virus can spread stealthily, and leaves health care systems and governments in a position where they are unsure just how bad the outbreak really is.

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Another issue is the ability of administering tests to the population.

Who do you choose to test for COVID19? In most Western countries, the tests were administered to individuals who had been abroad at first. Then, this shifted to individuals who had contact with people who were abroad. After that, it becomes a question of mitigating the spread through local transmission. This becomes paramount.

A lot has been written about “flattening the curve�. Professor Victor Grech explains this magnificently in his piece here, explaining why social distancing would help to reduce infections, thereby allowing

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our healthcare system and its already-overburdened workers to manage the outbreak. By having a trickle of infections every week, doctors and nurses can help each patient to get better, and avoid the loss of life. However, if people continue about their daily lives, and become exposed to an infected individual, the spread will continue, and may overburden our healthcare systems, as has been unfortunately the case for our neighbours in northern Italy.

There is so much to say on this outbreak, what it means for us in terms of human civilisation. How we work, what we buy, where we produce our goods, and how interact in social and economic terms. There will be a lot more to say in the weeks ahead, but for now, keep up to date from the local authorities, and follow their instructions to the letter. This is not the time for panic, but for resilience, strength and courtesy. Our forefathers endured global conflict and saw their loved ones perish, as they lived through years of uncertainty, until the end of World War II. Humans are a resilient bunch. We have forgotten that and become soft to some degree, being too comfortable with the luxuries we have and becoming unfamiliar with true sacrifice in times of crisis.

Let’s spare a thought for our doctors, our nurses, our decision and policy makers. The hours will be long, the stress will be unbearable, and the recognition is too little. Stay strong for yourselves, your families, your loved ones, but also more importantly - for the rest of Maltese people. We will endure. We will survive. Our culture, language and quirks will carry on to the next generation. We are the children of endless colonisation, conflict and hardship. Our blood is the same that ran through the veins of those who overthrew the French in 1800, the Italians and Germans in World War II, and the Ottomans in 1565.

WE ARE STRONG. MALTA STRONG.

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THE SAHEL: A WAR WHILE EVERYONE’S LOOKING AWAY While most of the attention on the fight against Islamic militants concentrates on Iraq and Syria, another, just as important, fight, is going on but with less media prominence, at least in the English-speaking press.

This was the offensive led by France against Islamic militants in the Sahel. There are now multiple extremist groups operating across the sub-Saharan region known as the Sahel and include cells linked to ISIS and al-Qaeda. Their threat goes beyond the region and imperils even Europe or the United States, besides the overarching worry that the crisis could spread further across West Africa.

The Sahel is one of the most unstable regions in the world. Conflict, weak governance, organised crime and violent extremism are destabilising many of the countries in the region.

A stretch of land covering the border areas of Burkina Faso, Mali and Niger is at the centre of the insurgency and counter-terrorism operations. There are various jihadist groups that operate across the Sahel which share a belief in extreme Islamic ideology and have become known for their brutality.

France has over 4,500 troops deployed in the Sahel, where it has been fighting for seven years. There is the important participation

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of the USwith an estimated 5,000 troops aided by drones spread out across Africa. But the Pentagon is considering a ‘full-scale’ withdrawal from West Africa.

Another forgotten aspect of this is the United Nations participation.

The UN has a force of 16,000 blue helmets and UN police in Mali on its peacekeeping mission, Minusma. The UN has already paid a heavy price with more than 200 people killed since it was launched in 2013, making it one of the deadliest operations in the UN’s history.

There is also the G5 Sahel Joint Force from Mauritania, Mali, Burkina Faso, Niger and Chad with a 5,000-strong army but it has so far struggled to become fully operational due to funding problems. Britain is expected to significantly step up its military support in West Africa to help combat the world’s fastest growing Islamist-led insurgency.

British troops have been helping with training local forces to fight extremism in the Sahel and, later this year, 250 British soldiers will join a UN mission in Mali. This represents the largest deployment of British soldiers to a peacekeeping mission since the Balkans war.

Attacks on army positions and civilians across the region are occurring with increasing regularity, despite the presence of thousands of troops from the countries affected and France. Last year, in fact, saw the highest annual death toll due to armed conflict in the region since 2012.

However, it is increasingly clear that the problem facing the G5 Sahel is not just the presence of armed groups.Apart from military support, action is urgently needed to address a worsening humanitarian crisis, climate change and development challenges which yet have to start being seriously tackled.

As the population in the region is set to double over the next 20 years, the violence is exacerbating development challenges.

Growing enough food for everyone will become increasingly difficult and this is not being helped by the numbers of people who have been forced to flee their homes, some of them managing to reach European Union states.

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THE ECONOMIC IMPACT OF THE CORONAVIRUS If you are pressed for time, the short answer is: huge.

If you plan to stick around for a little bit longer, there is a little more to it.

The most fundamental impact of the coronavirus from an economic perspective hits at the very heart of economics itself - a lot of economic activity has slowly ground to a stop. Flights have been cancelled, outdoor activities have been called off, meetings postponed, bars and restaurants shuttered, and factories in important global manufacturing hubs such as China temporarily closed in order to combat the spread of the novel coronavirus. As a result, economic growth has been hit considerably, producing an economic shock at least as large as that of the 2008 financial crisis. Why? Because whilst it was the financial services industry that was primarily hit in 2008, the coronavirus has hit multiple economic sectors at once, simultaneously. That is far more damaging, given its implications for manufacturers, businesses and consumers. The entire supply chain has been disrupted.

Here is a summary of some of the major impacts so far at the time of writing.. These, of course, are subject to change in the days and weeks ahead: • Global stock markets have taken a severe beating since the end of February: • The Tokyo Nikkei stock exchange is down 28.7% • The New York-based Dow Jones is down 31.1% • The London FTSE100 is down 34.1% • More than 100 countries have imposed travel restrictions since the beginning of the outbreak. Expect that number to climb sooner rather than later.

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• More than 50 central banks have cut interest rates in order to offset the expected economic downturn. This includes Russia, China, the U.S. and Australia. In the euro, the ECB has announced a €750 billion stimulus.

• Restaurant bookings are down dramatically in a number of countries when compared to the same day last year: • In the UK, bookings are down 82% • The US, 84% • Ireland, 86% • Germany, 90% • Canada, 94% • Chinese industrial production has tumbled by more than 13% in February.

• The value of gold, traditionally a safe haven asset, has taken a 12% tumble in just over two weeks.

• Oil prices have absolutely plummeted, also in part due to a price war between Saudi Arabia and Russia, to around $29 per barrel, the lowest level in nearly 20 years.

There is some irony to the coronavirus outbreak. One of these ironies is that the longer we drag out the rate of infections (as it’s called, flattening the curve, so as to not overwhelm national health services with too many infections at once) the worse it is for the global economy. The

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sooner we can get back to some semblance of normality, the better it is for economic growth. Now of course, this is not to say that we are advocating the abandonment of the vast precautionary measures being taken by governments all over the world, far from it. These are necessary to ensure that the impact on health services is manageable, rather than overwhelming, as has been unfortunately the case in Italy. But whilst we opt for self-isolation measures in order to stem the tide of infections all over the world, there are entire industries that are at considerable risk. Tourism, travel, financial services, retail outlets, and catering establishments to mention just a few. There is an entire economic ecosystem that supports these industries and also depends on them. The longer that economic activity is disrupted, the harder it will be for employers to provide salaries, and for employees to earn an income. The danger posed by this both economically and socially cannot be understated.

These are challenging times. Unprecedented in some ways. If you were to tell anyone that the global economy would come to a grinding halt just a few months ago, you would be bundled away into a van and taken to a psychiatric hospital. The impossible became possible. Is there any hope?

Yes, there is always hope. The coronavirus has changed us, probably forever. What 9/11 was for geopolitics and terrorism, the coronavirus is to the global economy. Leaders will have to reconsider their economic strategy and plan for potential disruptions in the future more seriously. CEOs will have to determine how best to deliver their products and services to consumers in case of minor or major disruption. They should also consider allowing for more remote working, which lowers their overhead costs, and grants more freedom to employees, making for higher employee satisfaction and potentially better retention. Digitalisation has become vital for all companies going forward, and those who do not adapt to new circumstances will inevitably fall to the wayside.

We’ve been placed in the middle of an unprecedented storm. Many have been caught unawares. The usual Maltese island mentality, that which says that nothing that happens outside of our borders really matters, has been shattered (at least for the time being). Malta has endured thousands of years of colonisation, war, famine, hunger and disease. We are being called upon to do so again. We will endure. We will adapt. We will survive.

But most importantly, we, like the rest of brothers and sisters around the world, must change. And change we will.

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THE TSUNAMI THAT SWEPT US ALL All the world’s various problems in these last days have disappeared into oblivion as it tries to get to grips with the outbreak of the coronavirus. Global health experts have been cautioning for years that the way societies are developing could lead the world into a pandemic of epic proportions.

Suffice to go back to their warnings years ago when the SARS, MERS, Avian flu and to a certain extent the Ebola broke out. But the coronavirus is different in many ways mainly for its unknowns.

And it wasn’t only the health experts.

To give one example, every year in the United States, the Director of National Intelligence (DNI) issues the Worldwide Threat Assessment. This year’s unclassified version of it has not been issued but if one had to look at the 2019 report it states that, “The United States will remain vulnerable to the next flu pandemic or large-scale outbreak of a contagious disease that could lead to massive rates of death and disability, severely affect the world economy, strain international resources, and increase calls on the United States for support.”

The 2019 warning was the third time in as many years that the nation’s intelligence experts said that a new strain of influenza could lead to a pandemic, and noted that neither the U.S. northe rest of the world are prepared.

“We anticipate there will be more frequent outbreaks of infectious diseases because of rapid unplanned urbanization, prolonged

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humanitarian crises, human incursion into previously unsettled land, expansion of international travel and trade, and regional climate change,� the 2019 threat assessment warned.

The world experienced three huge global outbreaks of influenza in the 20th century: in 1918, 1957 and 1968. The death toll around the world rose to 50, 5 and 2 million, respectively in each case, wreaking proportional social and economic disruption.

Experts warned that the ensuing SARS outbreak was a harbinger of things to come: Climate change and globalization were conspiring with an array of other forces to make it much easier for old animal diseases to morph into new human ones.

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But every time, the world went through what can be described a panic-then-forget phase as soon as the disease was controlled.

People and world leaders move on without heeding the warnings.

This time, the world is in “uncharted territory” on the coronavirus outbreak, the World Health Organization (WHO) declared.

The global economy is expected to grow at its slowest rate since 2009 this year and the Organisation for Economic Co-operation and Development warned that the outbreak could sendthe world into recession.

The world is hardly in a best-case scenario.

Rising nationalism, weak governments and, consequentially, waning trust and lingering trade wars have undermined cooperation between global superpowers.

Rampant misinformation and growing skepticism of science are skewing public understanding of the crisis and governments’ response to it.

Fake news has once more raised its ugly head as social websites became flooded with misleading information that only serves to aggravate the situation and anxiety in view of the great thirst to decipher the constant figures and scientific terminology. This anxiety is further aggravated by the deluge of instant information, fake or not, that hardly gives the chance to really digest what is being said and drowning the voices of those who are in the know with those who are not.

At the epicentre of Europe’s outbreak among others is Dr Daniele Macchini who works at Humanitas Gavazzeni hospital in Bergamo in Italy. In a Facebook post he was among the first to warn against taking the virus lightly while expressing frustration at those who compared it to a serious bout of influenza. He summed up the current global situation as a “tsunami that has swept us all”.

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REDEFINING THE ECONOMIC MODEL IN THE AFTERMATH OF COVID-19 PANDEMIC Amidst the COVID-19 pandemic, demands and needs are changing fast, so fast that recalibrating to the previous norm, is outdated – its past: remote history.

There is no doubt, a crisis this scale, reshapes the economy and society in lasting ways. From an economic point of view, the OECD Secretary General, José Ángel Gurría ascertains that the global economy will take years to recover from the pandemic crises, reflecting that it is ‘wishful thinking’ to expect countries to bounce back quickly.

From a social perspective, this pandemic will allow us to revisit our social priorities. Surely, safety, health and shelter on one hand and reserves, savings and insurances will become prominent in our to-do list. How about, luxury goods and entertainment activities?

Guess we have fallen some steps from Maslow’s hierarchy of needs.

In the aftermath of one of the biggest global crises in modern history, amidst inevitable new scores in unemployment rates, is it morally acceptable, for those who can, to pursue lavish lifestyles and luxurious goods and services? Hardly. It is useless therefore, for the economy to attempt to bounce back to a foregone reality.

With our collective mindset taking a leap into the unknown, this economic and social impasse, may ironically be the golden opportunity to shape how economies and societies remerge in the aftermath of COVID-19 pandemic. Let’s revaluate what went wrong, draw lessons and strive to emerge positively changed.

This pandemic might very well mark the end of society’s romance with hyper individualism and market economy. If anything, indisputably, in times of global crisis, it is governments, not

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privately-owned businesses who are expected to uphold and safeguard our basic, fundamental needs. We turn to governments to uphold national security, retain public order and guarantee public health and employment. In times of crises, pandemic or earthquakes, there seems to be a common understanding that it is governments who ought to intervene, because we know that such dramatic events demand collective action. By far, if left alone, the market is in no position to address crisis. Survival of the fittest, is an understatement.

One of the short comings of a market economy, made evident during this pandemic, is the lack of government participation in public goods. Many utilities, such as healthcare, transportation, energy sectors amongst others, had throughout the years, gradually undergone a global shift from nationalisation to privatisation.

Decades of peace and tranquillity have instilled a trajectory of market economy that foregoes public goods. In those peaceful days, it was the market which prevailed. It dictated its priorities through

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the creation of rules and institutions to protect the free movement of capitals, goods and services only. Movement of people was allowed – upon economic needs tests, to serve the free movement as previously mentioned. And inter-governmental institutions such as the World Trade Organisation and global private powers such as rating agencies, multinational corporations and financial centres legitimised and safeguarded the predominance of this type of economy. The result is the indoctrination that the market system, where the economy is an end in itself, is the only way to effectively supply goods and services.

No wonder then that, no rules nor resources at international level were introduced for welfare, labour and environmental standards.

These aspects, in the framework of a market economy, are merely considered a ‘cost’ at the expense of the economy – left to fragmented national policies, under pressure by the private sector and limited public resources. An example is the Paris Agreement, introducing a model of ‘voluntary, nationally-determined contributions’ by governments, many of which expected to be delivered through the wonders of the market economy.

Back to the current scenario. In these unsettling times, entire nations are declaring national emergency status and calling for governments to take back control of privatised hospitals, deploy the army and close borders. We now ‘discover’ that health is a public necessity and that market forces fall short in providing the assurances and peace of mind that public health and welfare systems guarantee.

If anything, this pandemic made glaringly visible the economic and social costs of lack of public goods, not to mention the lack of global health standards such as wet-blood wildlife markets in China and the ability to quickly identify and respond to a pandemic. Same reasoning applies to environmental disasters caused by climate change.

In this scenario, the re-emergence of the deteriorating welfare state, may be pronounced. In Europe, the welfare state emerged in the aftermath of World War II. Today, we may insist that governments take back control of public healthcare, energy provision and anything we deem vital for the well-being of society.

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Does this imply, that the aftermath of COVID-19 pandemic necessitates swinging from a market-based economy to a system of state-induced economy? Not necessarily, as direct state intervention has had its downfalls. Uncontrolled and excessive state intervention also led to resources being misused through over-spending, often motivated by political parties’ agenda.

Moving forward, how should the social and economic paradigms emerge in the aftermath of the COVID-19 pandemic? How about finding comfort that these aspects are two sides of the same coin and their mutual survival depends on them working for one another rather than at the cost of one another? None can thrive without the other. Let’s embrace their complementarity rather than focus on them being rivals. Put it differently, let’s get set to embark on a virtuous circle of socio-economic sustainability rather than perpetuating a system of socio-economic inequalities and disparities.

To complicate matters, there are many more variables to consider and put in the equation. A sustainable, social-conscious economy requires a high degree of pluralism in economics. One which does not prioritize amongst variables. And one where the variables do not function at the cost of the other. It recalibrates the value of the environment, social welfare, the economy, education, political participation and culture (amongst others), in an equitable manner. This does not mean that at any point in time all variables are treated equally. Its primary objective is to maintain a level of equity, and that it deploys means to enhance a sector which at any point in time is significantly falling behind others.

And this is hardly nouvelle theory. It is reminiscent of, and perhaps supplementing the Human Development Index (HDI), a crude index which does not solely rely on economic indicators.

In the aftermath of COVID-19 pandemic, the new norm is recalibration. The answer is in the descaling of superfluous market economic activity and shifting focus to address foregone needs (such as the environment) and sustain a more than adequate social welfare safety net. It goes without saying, that adapting businesses might find fruition in this recalibration.

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