The crisis is over, but recovery is just beginning

That is the only way business will survive and come out of this situation in a position to be profitable again, albeit at a lower level than they were used to

After three months of a ‘soft lockdown’ that caused widespread anxiety and uncertainty – with serious effects on the local economy – Prime Minister Robert Abela has been understandably keen to reassure the country that the crisis has been brought under control.

In an interview on Sunday, Abela suggested that this has already been achieved, in practice: claiming that ‘COVID-19 is behind us’ – a sentiment later echoed by Health Minister Chris Fearne, who announced on Monday that ‘We have won the war on COVID-19’.

Addressing the same press conference at Castille on Monday evening, Abela added that – while the need for discipline and precautions remains in place - the country was in the process of practically returning back to normal.

The prime minister therefore announced that the remaining restrictions on outlets will be lifted on Friday, the airport will be opened on 1 July, and child care facilities will reopen shortly.

Despite fears and misgivings expressed by some quarters (including members of the medical profession), these decisions must be seen in the context of a steady, confirmed downward trend in contagion rates.

Fearne confirmed the transmission rate of the virus, known as the R-Factor, has dropped to 0.5. According to the latest figures released by the Health Ministry, only one new case of COVID-19 has been registered in Malta overnight, and 17 patients have recovered: bringing the total number of active cases to just 57.

Since the start of the pandemic in March, 554 people recovered from the virus and nine patients died. As such, no one can argue that Malta’s health strategy in fighting the spread of coronavirus has been successful; the positive results are there for all to see.

Meanwhile, as infection rate dropped, it was imperative for Malta not to remain under the soft lockdown for too long beyond what was deemed, by the experts, to be absolutely necessary: especially in view of neighbouring countries also re-opening activity.

News of re-opening the airport on 1 July has people looking forward to what this will bode for the tourist industry this summer. Any expectations of a sudden return to normality would surely be misplaced; but with so many jobs at stake, even a modest influx would be a relief, following weeks and months of uncertainty.

Nonetheless, it is now imperative that ways and means are found to ensure that the summer months prove economically viable for operators before the onset of the influenza season: which, unhappily, also coincides with the start of the next scholastic year.

This suggests that, despite all hopes for a smooth transition, the country must brace itself for a bumpy ride in the months to come.

Just as operators in the tourism industry cannot realistically expect to return to pre-corona numbers overnight, or over a small number of weeks, the same applies to all other businesses in all sectors. Recovery will take months, and everyone must be prepared for a long and sustained period of lower activity/income than they may have gotten used to.

Next Monday’s emergency budget must therefore look out for big business as well as for the smaller ones, who are now already coming to terms with operating on reduced hours, with reduced staff at reduced income.

Solid incentives are needed to ensure that all businesses can survive the next few months as securely as possible, while the economy picks up pace again. Safeguarding jobs remains a top priority, but the right incentives will help the business community settle down to a ‘new normal’ that will see staff wages reinstated fully, as well as allowances and benefits.

From this perspective, government’s recent announcement that it will start, on 7 June, to discuss a rescue package worth €1.8 billion, to mitigate the impact of Covid-19 on the economy, was welcome.

What is of paramount importance, however, is that the so-called ‘mini-budget’ does not aim for any accelerated return to normality. Government must also recognise that while the crisis appears to be over, the healing process has only just begin. It will take months, if not years, for the economy to recover; and government’s incentives must reflect this.

That is the only way business will survive and come out of this situation in a position to be profitable again, albeit at a lower level than they were used to.