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A way forward

Apr 04,2020 - Last updated at Apr 04,2020

 

The world is going through a tough time right now. With the rise of COVID-19, certain industries are at stake with limited trade and a shortage of cash flow.

As we go through this new financial crisis, we need to reflect on the last one in 2008. During the last recession, 2.1 million Americans were laid off in 2009 alone. However, at the same time, seven of the biggest companies we see today were founded upon the 2008 recession; companies such as Uber, Whatsaap, Venmo, Airbnb, Slack, Pinterest and Square. Even before that, Disney was incorporated in 1929 right as the Great Depression was getting started. But at that time, Walt Disney knew that people needed a smile on their faces more than ever and took the risk of founding his venture. What we can observe is that technology paired with community needs is vital in these times.

In a country like Jordan, the threat of COVID-19 could act as a threat, but it could very well be an opportunity. Jordan is heavily dependent on exports. New markets could open nationally that could act as a replacement towards self-sustainment.

Main exports of the country include clothing, chemicals, potash and phosphates, with exporting partners being Saudi Arabia, the United States, China and the European Union. Imports include machinery and apparatus, crude petroleum and food products.

As the threat of the global economy is increasing and borders for trade closing, Jordan can develop a self-sustainable economy in the markets of agriculture, food and clothing. This is the time to invest in the technological transformation of traditional sectors.

This is the time to invest in agri-tech to improve the efficiency, output and profitability of the agriculture sector.

Using digital technology can enable informed management of water resources with a better understanding of demand and supply of water usage and levels in the region as well as assist in crop planning in a given region. 

This is the time for investors in the region to invest in technological food and agriculture production that can aid in production of quality foods and agriculture at less of a cost, as well as allow for the repair of environmentally degraded land to its natural state, making it possible to grow crops again. 

This is an opportunity for the clothing sector as well to use 21st century technology such as CAD, CAM, manufacturing management and information technology systems to automate the production of clothing and textile goods to produce greater quantities with good quality and at less of a cost.

At this stage, it is very important for us to approach the COVID-19 not just as containment of the virus but to parallel that with proactive efforts in this new dynamic of the economy we are about to approach.

Deregulation efforts need to be put in play as well as subsidies by the Ministry of Industry and Trade to encourage the development of the sectors stated above nationally. This is the time for Jordan to deregulate in certain sectors to help industries boom and allow for new ones to appear. It needs to create a friendlier environment that allows for the rise of new ideas. Deregulation for funds and grants entering from the international community needs to become a leaner and faster process to aid with the crisis and in job creation.

Jobs will be lost in certain industries and that is a fact, so we need to start acting in ways to help transfer these jobs into rising sectors that will rise due to the demand on the national economy. We also need to provide a platform for existing businesses to enhance and grow. One way would be to relieve companies that reinvest their profits in their business from taxes on those profits.

The Ministry of Social Development created a fund that accepts donations for the COVID- 19 response, in which Jordanians and the private sector have collaborated greatly to. Once things settle down and we are out of the emergency stage, it is very important for a parallel fund to take place, a cooperative investment fund developed that accepts donations to help fund new technological advances such as the ones stated above from the people, to the people. Increasing the purchase of government bonds to fund decentralisation efforts needs to take place as a decentralised economy can withhold shocks much better than a centralised one.

As we approach this new era, even after the lockdown period is over, companies must look at ways to reduce overhead. Flexible work conditions, work from home, renting smaller office spaces and hiring part time employees is a way for cost reduction into a more lean economy.

Every recession yields innovation and raises that bar. Upon containment, investment in new technologies that can allow us to be self-sufficient and transfer lost jobs into other forms is what will get us through this crisis.

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