Advertisement
Features

Economic governance amid raging pandemic

Advertisement

By Patrick Achitabwino:

Peter Mutharika

The Malawi economy, just as all other world economies that have been ransacked by the coronavirus, needs a reorganisation. Emergency control measures need to be implemented. It is obvious that Malawi can hardly come up with a robust stimulus plan that can see the bailing out of organisations and companies whose fortunes have plummeted. However, it is imperative that both the corporate world and the government cushion the citizenry from the disastrous economic impact of the coronavirus.

It is obvious that in moments like this, when trade initiatives are faltering and achievement of profits now stands a mere illusion, boards and shareholders are likely to toy with the idea of staff downsizing. Shortly, headlines will be awash with technical elements like strategic reorganisation and retrenchments thus eventually quarantining people into the quandary of poverty.

Advertisement

The paradox of it all is that those implementing the measures will insulate themselves from the very same decisions they are piling on others. They will work out a retrenchment plan that will not affect them but only those they lead.

It is imperative that the world now embodies a military strategy. In military, they give medals to those that are willing to sacrifice their lives so that others gain. In business, we give bonuses to others who are willing to sacrifice others so that they may gain. The concern should no longer be on prioritizing the survival of corporate executives and larger-than-life returns on investment for shareholders but ensuring that humanity survives in dignity.

Corporate entities need to wear a human face, their business models need to be founded on the Ubuntu philosophy – I am because you are. There is need for the emergence of corporate leaders whose main motive is an integrated approach to business than mere financial returns and hefty bonuses and benefits.

Advertisement

The very same employees that are on the verge of being sacrificed have invested a lot in the prior business growth of the entities they have been serving. Even though coronavirus has hit the entity, their loyalty and dedication over the past years should not be ignored.

Great leaders will embark on a robust survival strategy. They will put in place measures that ensure that ‘it is better that we all suffer a little than that one person suffers a lot.’ In this regard, cost-cutting measures will be implemented through holidays – paid and unpaid, salaries slashed at least only for the period of recovery, benefits revised until the economy reaches equilibrium while at the very same time ensuring that no one, absolutely no one, gets sacked.

Leadership guru Simon Sinek teaches that great leaders will never sacrifice the people to save numbers; they would sooner sacrifice the numbers to save the people.

The corporate world can learn from the amazing story of Bob Chapman who was chief executive for a large manufacturing company in the mid-west called “Barry- Wehmiller.” In 2008, it was hit by the recession and they lost thirty percent of their orders overnight.

The company was then on its knees. It could no longer afford to manage its labour pool. The company needed to save ten million United States dollars.

The Board of Barry-Wehmiller quickly met as many boards will shortly meet in this coronavirus era. The board discussed and opted for layoffs. Bob Chapman refused to carry out the layoffs directive because he was not a believer of head counts; he was a believer of heart counts and that is exactly what the corporate world needs in this coronavirus ravaged economy.

It is said that Chapman came up with a programme where every employee from Secretary to CEO was required to take four weeks of unpaid vacation. They could take it any time they wanted and they did not have to take it consecutively.

REJECTED LAYOFFS—Chapman

Bob Chapman announced the programme with the conviction that resonated well with the people he worked with. Chapman said: “It is better that we should all suffer a little than any of us should suffer a lot.”

The results were phenomenal. Morale was boosted. The company eventually saved 20 million United States dollars. Eventually, people started trading holidays with each other. Those who could afford it more traded with those who could afford it less. Some people could take five weeks so that somebody else only had to take three weeks. Still, we have the majority of Malawians that are absolved in the public sector and many others that are in the informal sector. Their economic suffering also needs to be cushioned. The disease has brought in a greater call for hygiene. In this regard, public enterprises have to play their social role in cushioning people from effects of economic collapse as a result of the coronavirus.

The government can consider that a certain quota of water that people access from water boards should be for free up until the situation improves. This will save the people some resources that could be channelled to other survival needs. The same should also be the case with electricity.

A quota of some megawatts could be accorded to all households for free. Energy poverty is one of the worst poverty hitting people most. A relief in the challenging time of coronavirus could be highly appreciated.

But after the coronavirus is gone, which will obviously happen, the economy must be ignited for growth. Investors and other entrepreneurs will be in great need of cash to resuscitate their faltering companies thus eventually boosting the provision of goods and services.

Unorthodox financial management policies will need to be implemented. Interest rates should better be chopped down to rock bottom so that people access loans at low interest, invest and have the ability to repay. As long as interest rates remain high, business uptakes will never happen. Worldwide, central banks have started slashing rates to boost easy access to credit and Malawi should be no exception.

In a nation of over 18 million people, almost all households have to be cushioned. Malawi must therefore undertake a socialistic model in reaching out to the common man at least for a period of three months. This could be through according each household at least a minimum of K10,000 per month.

This could be done through direct bank transfers or mobile money services. The amount may look small but it would go a long way in mitigating the economic impact of the coronavirus on the common man. Of course, mobile money service providers will also have to slash processing fees as part of their contribution in this emergency exercise. On the financial resources management, Value Added Tax could temporarily be halted on essential services and even Pay as You Earn tax be allowed to be paid in instalments as part of financial management to accord corporate entities breathing space to work on survival.

The sacrifices made towards steering the economy through the turbulent waters of the coronavirus need support at the highest level. It is refreshing that the President and Cabinet ministers have slashed their salaries by 10 percent. It may appear small but it is out of their free will, anyway.

Members of Parliament can follow suit. People’s representatives must share in their agony and a salary cut could be part of their contribution. Top senior officials should better suffer a cut through salary reductions and some cuts on some non-essential benefits.

At the end of the day, the Malawi economy is the economy we all have to build hence worth sacrificing everything else. It is better that we all suffer a little for the sake of the entire nation than have a few people suffer more.

The author is a motivational speaker, author, columnist and mindset change specialist.

Facebook Notice for EU! You need to login to view and post FB Comments!
Advertisement
Tags
Show More
Advertisement

Related Articles

Back to top button
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker