The economic impact of the coronavirus is cause for concern. UNCTAD’s Richard Kozul-Wright estimates an additional slowdown in the global economy of approximately $1 trillion, which is conservative, given that production is slowly grinding to a halt.
Countries such as China and Italy are already on lockdown and the United States of America is heading in that direction as schools close and flights from Europe are banned. Travel agents’ and airlines’ current sales have dropped by 0.3 percent and 0.7 percent respectively; and the retail industry generally, including department stores and fashion chains, as well as hotels and restaurants, amongst others are taking huge hits.
The adverse consequences of public responses to the virus is aggravating an already looming recession that is predicted to be worse than that of 2008 due to rising consumer and corporate debt, the decline in real wages and lower levels of consumer spending. The drop in demand was deepened by governments having adopted austerity measures to escape the sovereign debt caused by bailing out financial institutions during the then financial crisis; a consequence of “privatising the bankers’ profits and socialising their losses.”
The anticipation of a major financial cataclysm, the “mother of all bubbles”, together with the falling prices of commodities such as copper and oil, forewarns that the coalescence of all these factors, together with the impact of the coronavirus, paints a rather gloomy picture of the immediate future.
Accordingly, the US Federal Reserve, the Bank of England, and the European Central Bank are taking fiscal action through rates cuts and introducing new stimulus measures in support of smaller companies, representing the initiatives of some governments to ease future financial and economic distresses. We trust that other governments, including the South African government, will follow suit.
Another possible light in this current wave of darkness is digitisation. In addition to increased sales in disinfectant and hand sanitiser, the use of digital services has escalated since the coronavirus outbreak.
Those in self-quarantine have resorted to digitised services to keep life as close to normal as possible. Companies with a culture of remote working, are allowing their employees to log into work from home. Microsoft’s teams saw a 500 percent increase in meetings, calls and conference usage in China since the end of January, according to a spokesperson. This pattern is being reflected in other parts of the world.
Furthermore, many learning institutions are continuing classes through online instruction. Books are being accessed online. Food and groceries are being ordered online and dropped at people’s doors. Movies are being accessed remotely. People are even participating in virtual happy hours.
South Africa too has the capacity for some semblance of normal life to continue. While we cannot afford to close those companies that survive on on-site work, and accordingly preventative measures are being enforced; other services can be provided remotely.
Government was able to effectively use WhatsApp groups, email, social media and its websites to spread information containing precautionary measures to manage the spread of the coronavirus.
The Presidential Advisory Committee’s recommendations on optimising the opportunities of the digital era have been released; and from March 11 to 13, 2020 the National Media Electronic Institute of South Africa held a conference titled “Enhancing human capacity for the Fourth Industrial Revolution”. E-governance services are finally gaining traction. These activities demonstrate government’s serious commitment to being digitally accessible.
Two major challenges exist that prevent South Africans from utilising the current benefits of the digital era. The one is reliable electricity supply, and we trust that this is being resolved expeditiously. The other challenge is high data costs. While access to digital services has never been elitist, its developmental necessity is now glaring. The primary factor enforcing the digital divide and making the access of online government services a luxury, is the price of data.
Currently, those who can afford data are relatively insulated from the discomfort of restrictions imposed by the virus; they simply continue with life, using their computers, mobile phones and even television sets, to submit their work and to ensure that their basic needs are met. Those with meagre income are stuck. If data costs are significantly reduced, everyone will be able to benefit from online services as these days no-one needs a computer or iPad; any mobile phone will do.
We welcome the recent commitment by local mobile operators to reduce data costs. The reduction, they would argue, is substantive. But more can be done. Software companies such as Zoom, Microsoft, Google, and Slack are offering many of their products for free, as part of their contribution to reduce the adverse impact of the coronavirus.
We would like to see South African mobile operators grant consumers even greater concessions, including possibly enabling us to access government websites and services at no cost. Discussions with online retail stores should also be explored to see how the data costs can be better managed, instead of being borne by the consumer.
The implications of the coronavirus are broader than health. They also bear significant negative socio-economic consequences given our already high levels of poverty, unemployment and inequality, and the looming global recession. Government has a responsibility to ensure that the impact on citizens is minimal. Every sector should provide innovative measures to combat this pending disaster. A key contributor is the communications sector.
This crisis presents us with an opportunity to advance digital inclusiveness. Achieving digital inclusiveness will however require that our mobile operators lead in displaying patriotism. Data costs must fall (even further)!
* Reneva Fourie is a policy analyst specialising in governance, development and security.