With the recent lockdown flexibility maintained in India, it is high time we consider opening our economy as soon as possible. When measures for ensuring safety against the COVID-19 are available, with the right policy we can go back to our usual routine once again and end the economic misery.
But while strategies for reopening are required, to ensure the magic of the free market, nothing needs to be enforced.
In the past few weeks, we have been constantly calculating financial losses of various sectors, startups and innovative businesses that have been able to lead markets and provide employment opportunities. Businesses may now have already considered now or even swift but weak business models that may enable them to survive this confusing time of a post-crisis. Some of them are likely to be incapable of sustaining their current market position, a result of which they might file for bankruptcy and mass unemployment might occur.
Obviously, people’s purchasing power will shrink.
It almost looks like the economy will never be the same. And it won’t. It shouldn’t.
A post-crisis economy is an opportunity if anything. Yes, the previous performances of almost all enterprises cannot be maintained post lockdown but this is where an economy should start. Smart businesses will survive while failing entrepreneurs will grab the next big opportunity. Suddenly having an online payment account is not a bad idea. Maybe buying remote work facilitating service is really important. What if people need a service related to data security? Unexplored ideas will be on the rise, and so will its demand.
But we can’t overlook the loss that awaits us, the loss that awaits every single country that has implemented lockdown. What we can do is leave it to the market to decide and shape our demand and supply, facilitating the consumers with the required goods and services with convenience while guiding entrepreneurs towards new possibilities through its market signals. The economy will go on. It will need to adapt and adjust, but it will go on.
Governments may want to try and “save” the market. For example, protectionist policies may be implemented in order to save local businesses. But this can disrupt the chemistry of demand and supply while affecting consumer welfare.
Nothing of this sort is needed. In fact, the economy needs less government post lockdown than any other time. Fewer regulations, intervention and red tapes. Flexibility promotes innovation and glocal advancements.
So if a post lockdown economy needs a policy, it would probably be around preserving and protecting the balance of a free, uncontrolled market.