Economist Esmond Birnie on Covid: Look back 100 years - we will get past this crisis
A top economist says that while there are significant financial challenges ahead, the past 100 years remind us that Covid will pass - and he notes that measured restrictions have already begun to slow down the infection rate across NI.
Senior Ulster University economist Dr Esmond Birnie told the News Letter that people should take confidence from the many trials Northern Ireland has survived.
“There is a sense of ‘This too will pass’, if you consider Northern Ireland over the last 100 years - next year is after all the centenary of the state,” he said. “Society and the economy have passed through many times of great turbulence and sometimes destruction, for example, the Great Depression, the Second World War, the Troubles and the 2008-10 banking crisis and recession. We got through those and we can get through this too.”
Looking to more immediate optimism he notes: “We already have evidence that the rate of growth in new infections is slowing down, particularly in the north west and it is important to note that the current restrictions are not as severe as late March-late June.”
And after reviewing all the economic and ethical information on the impact of lockdowns on health and wealth, he comes to one firm conclusion: “What should be done - as should have been done in the summer - put resources into improving our contact and trace system. The public have a part to play; people need to play their part by complying with instructions to self-isolate for the required number of days where necessary.”
What will happen next in light of the hundreds of billions of extra UK debt? There are only a few possibilities, he says; debt default, the economy outgrows the debt, negative interest rates or post war levels of inflation.
He also warns that NI must face the reality that taxpayer funded lockdowns “cannot simply be rolled on and on forever”.
He adds: “The hard challenge for government is to recognise this sooner rather than later and move from subsidies to encouraging people to re-train for sectors which will expand after the virus.”
The Department for the Economy appeared to agree. “The Minister for the Economy has presented the stark economic impacts to the Assembly, but these were predicated on a bounce back in the second half of the year as opposed to even more economic blows,” it said.
“The economic outcome in the short term is already set to deteriorate further than the expectations set out earlier in the year, and on this basis the minister has also set out clearly that we cannot continue to shut down our economy.
“A future competitive, inclusive and greener economy can be secured through taking action now to protect jobs, strengthen the core pillars of our economy, support the people and places most affected, and boost those sectors that will deliver the jobs of the future.”
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