The coronavirus accelerated the end of an economic cycle. The systems we build: political, economic, social, legal, health and education will have to adapt to a new reality. The problems inherent in the moment, such as the destruction of jobs, the huge income disparity and the growing public deficit in the countries – were compounded by the abrupt halt in the economy. It is unacceptable to waste time on illusions that the world will be the same, as the Brazilian president says when he called for the end of the quarantine.
The coronavirus has already caused one of the greatest socio-economic mayhem in the history of the United States. Last week, 6.8 million Americans filed for unemployment insurance. It is the largest record number of unemployed in the history of the United States. The possibility of a rebound of the world economy in the second semester is increasingly distant.
Low growth and unemployment in Brazil
In Brazil, before the coronavirus crisis, the Brazilian economy was already in a dangerous situation. In addition to a negligible GDP growth rate of only 1.1% in 2019, Brazil faced a record number of unemployed (13 million people) and discouraged workers (26 million Brazilians). The global economic crisis triggered by the coronavirus has aggravated the country’s two chronic problems: low economic growth and high unemployment.
Insufficient measures and wrong posture
The government sought to mitigate the effects of the economic paralysis by sending to Congress a package of 600 billion reais to guarantee income for the unemployed and incentives for small and medium-sized companies, in exchange of shelving of lay-offs. Although necessary, such measures are insufficient to contain the bleeding impacts of the global economy. But Bolsonaro continues to double the bet on a deceitful alternative: the end of the quarantine with the rapid resumption of economic activity.
The unknown new reality
The coronavirus accelerated the end of the economic cycle. The world will have to adapt to a new and challenging reality. The latent problems that existed before the crisis – such as the destruction of jobs, the huge income disparity and the growing public deficit in many countries – has been compounded by the problems of the abrupt halt in the economy. At this moment when we are all sailing in uncharted waters, it is unacceptable to waste time with illusions that the world will be the same after the crisis, as is the belief of the Brazilian president. The crisis has already confirmed that it will be precisely the union, cooperation and exchange of knowledge, data and ideas that will propel a new wave of innovation. We are in the verge of a time when honest mistakes will come before successes that will put the world back on the path of growth and economic prosperity.