UK pledges ‘Rooseveltian’ response to virus crisis

Britain’s Prime Minister Boris Johnson visits the construction site of Ealing Fields High School in London on Monday. (AFP)
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Updated 30 June 2020

UK pledges ‘Rooseveltian’ response to virus crisis

  • Britain has gone through a profound shock, says prime minister

LONDON: British Prime Minister Boris Johnson said on Monday the coronavirus crisis needed the type of massive economic response US president Franklin D. Roosevelt mobilized to deal with the Great Depression.

Johnson told The Times newspaper’s new radio station that Britain was heading for “bumpy times” as it struggles through its biggest economic contraction on record.

He intends to unveil a spending program in a speech on Tuesday his office has simply dubbed “build, build, build.”

“I think this is the moment for a Rooseveltian approach to the UK,” said Johnson. “I really think the investment will pay off.”

Roosevelt launched the New Deal program in the 1930s that created a comprehensive social care system whose legacy lives on to this day.

The first part of Johnson’s initiative earmarks £1 billion ($1.2 billion) for school repairs.

“The country has gone through a profound shock,” he said.

“We really want to build back better, to do things differently, to invest in infrastructure, transport, broadband — you name it.”

Johnson won an impressive 80-seat majority in December by positioning his Conservatives as more fiscally responsible than the main opposition Labour Party.

But the lockdowns imposed globally to fight the new disease have forced even the most prudent governments to unveil social safety nets that will put states deep into debt for years to come.

The true scale of Britain’s unemployment problem will only be revealed once the government’s furlough scheme for temporarily laid-off workers begins being rolled backed in August.

The current spending program has supported 9 million jobs and cost the government tens of billions of pounds.

The independent Resolution Foundation think tank said the government had little choice but to spend even more because “the virus will continue to hold activity below its pre-pandemic level.”

Johnson should try to generate “job creation via direct public investment in social care and retrofitting,” it said in a report.

The ruling Conservative Party’s newfound focus on spending comes with Labour trying to recover from its election drubbing that cost the job of its socialist leader Jeremy Corbyn.

New opposition chief Keir Starmer — a trained lawyer with a more pragmatic style — offered to work with Johnson while more than 1,000 people were dying of COVID-19 a day in April.

But that support appears to be wearing off as the first wave of the health emergency passes and attention shifts to the economic response.

“It’s staggering that in light of the economic crisis that is about to descend upon us that we are not having a July budget that puts jobs at the center of economic recovery,” Starmer fumed on Monday.

Restaurants along with most of the rest of the hospitality, tourism and leisure sectors in England will reopen next week for the first time since March 20.

But the easing could be delayed in the central English city of Leicester because of a reported spike in new infections.

Leicester mayor Peter Soulsby said he has received instructions from London to postpone the reopenings planned for next week.

Yet he also hinted that the ethnically diverse city of 500,000 was not looking forward to spending more time being kept away from its restaurants and pubs.

The mayor said the government’s assessment of the health problems in Leicester was “superficial.”

“Its description of Leicester is inaccurate and certainly it does not provide us with the information we need if we are to remain restricted for two weeks longer than the rest of the country,” he said.

Leicester City Council’s public health director Ivan Browne said the new infections were mostly being reported among younger people who are less susceptible to COVID-19.

“It’s very much around the younger working-age population,” Browne said.

Saudi Arabia’s 6-point plan to jumpstart global economy

Updated 07 July 2020

Saudi Arabia’s 6-point plan to jumpstart global economy

  • Policy recommendations to G20 aim to counter effects of pandemic

DUBAI: Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled a six-point business plan to jump start the global economy out of the recession brought on by the COVID-19 pandemic.

Yousef Al-Benyan, the chairman of the B20 business group within the G20, told a webinar from Riyadh that the response to the pandemic -— including the injection of $5 trillion into the global economy — had been “reassuring.”

But he warned that the leading economies of the world had to continue to work together to mitigate the effects of global lockdowns and to address the possibility of a “second wave” of the disease.

“Cooperation and collaboration between governments, global governance institutions and businesses is vital for an effective and timely resolution of this multi-dimensional contagion transcending borders,” Al-Benyan said.

“The B20 is strongly of the view there is no alternative to global cooperation, collaboration and consensus to tide over a multi-dimensional and systemic crisis,” he added.

The six-point plan, contained in a special report to the G20 leadership with input from 750 global business leaders, sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century.

The document advocates policies to build health resilience, safeguard human capital, and prevent financial instability.

It also promotes measures to free up global supply chains, revive productive economic sectors, and digitize the world economy “responsibly and inclusively.”

In a media question-and-answer session to launch the report, Al-Benyan said that among the top priorities for business leaders were the search for a vaccine against the virus that has killed more than half-a-million people around the world, and the need to reopen global trade routes slammed shut by economic lockdowns.

He said that the G20 response had been speedy and proactive, especially in comparison with the global financial crisis of 2009, but he said that more needed to be done, especially to face the possibility that the disease might surge again. “Now is not the time to celebrate,” he warned.

“Multilateral institutions and mechanisms must be positively leveraged by governments to serve their societies and must be enhanced wherever necessary during and after the pandemic,” he said, highlighting the role of the World Health Organization, the UN and the International Monetary Fund, which have come under attack from some world leaders during the pandemic.

Al-Benyan said that policy responses to the pandemic had been “designed according to each country’s requirements.”

Separately, the governor of the Saudi Arabian Monetary Authority said that it was “too early” to say if the Kingdom’s economy would experience a sharp “V-shape” recovery from pandemic recession.