States must dig deep to save economy
AN ARMS race has swept through governments over the past few days as each seeks to demonstrate its determination to beat the economic effects of the coronavirus.
‘We will do whatever it takes,’ said Prime Minister Boris Johnson as the UK pledged a £350bn bailout, representing 15% of GDP.
‘We want to go big,’ said President Trump, as he called for urgent action to speed $1 trillion into the US economy.
And in Jersey a package of measures totalling £180m. were yesterday announced.
In that light, Guernsey’s approach is low key. There is no eye-popping headline figure. The closest we get is the £5m. allocated to a ‘hardship fund’ to support people facing tough times as part of a £30m. package.
Underwhelming though it might be, islanders have to trust not in the big numbers of the UK and elsewhere (most of which are loans) but in the president of Policy & Resources’ promises and the strength of our economy.
‘If we do nothing, perfectly decent businesses will go the wall,’ he said. ‘We must not let that happen… Let me make it very clear that we can and will make available whatever resources are needed.’
Before this is out, every last bit of that resolve will be tested.
For this crisis is already hurting businesses and individuals. While islanders have been sheltered, so far, from the worst of the pandemic in terms of health they have not escaped the savage economic blows raining down.
Overnight, many have seen their revenues tumble.
Not just the obvious casualties of hotels, pubs, shops, airlines and travel agents but right through the economy to self-employed traders such as yoga teachers and driving instructors.
It is hard to imagine an area of business in the Bailiwick which will escape unscathed.
A combination of local and international measures is having a damaging effect. Jobs are being lost daily and lives blighted as individual businesses quickly cut their costs.
If the island economy is to recover without deep scars from Covid-19 in the months to come the States’ interventions must be swift and substantial.
There may be no need to grandstand with huge headline sums but every bit of the Bailiwick’s undoubted financial muscle must be employed.