Qatar’s QR75bn relief package for the private sector, announced as part of the fight against the novel coronavirus (Covid-19) outbreak, shows that the government is responding quickly to the most immediate economic concerns, an academic with Georgetown University in Qatar (GU-Q) has said.
“It is now a certainty that a global recession is underway and that there is nothing governments can do to prevent it. Governments can, however, take steps to limit the humanitarian impact of the recession and to ensure that economies can recover quickly once the pandemic subsides,” said Prof Jack Rossbach, assistant
professor of economics, GU-Q.
“Countries must ensure that individuals at risk of losing their income streams are able to remain in their homes and do not lose access to utilities and other essentials. This protects vulnerable individuals while also encouraging compliance with emergency measures put in place to limit the spread of the virus.
“On the spillover front, a country must provide short-term debt relief to prevent a cascade of defaults, as this would eliminate any hope of a quick recovery. Qatar’s QR75bn relief package is targeted towards exactly these goals and shows that the government is responding quickly to the most immediate economic concerns,” said the professor.
With the growing outbreak of coronavirus, and businesses taking a hit, Qatar’s government has implemented a series of measures to protect its economy. Banks have been encouraged to postpone loan instalments from the private sector by extending grace periods to six months. And food and medical goods, small and medium-sized businesses, and the tourism and logistics industries are exempted from custom duties for a period of six months.
And in the longer term, the government will likely want to consider measures to ensure individuals stay employed so that businesses can quickly resume operations, as well as a broader economic stimulus package to ensure that consumer confidence and spending return to their previously high levels, the professor noted.
Recently, the International Labour Organisation (ILO) estimated that up to 24.7mn people around the world could be unemployed because of the recession, and it is up to countries to create policy responses that include worker protection measures.
“The US government is still forming its fiscal response to the pandemic. Recent reports suggest a $2trn stimulus package composed of a mix of industry loans and bailouts, an expansion of unemployment benefits, direct payments to individuals, and aid to state and local governments. Whereas the finalised details of the stimulus package will determine its effectiveness, the package appears much improved compared to earlier iterations that were too small and overly focused on stimulus measures that would have been ineffective while social
distancing remains in place.
“This pandemic has brought with it an unprecedented economic crisis. Qatar’s initial steps, however, should instil confidence that the country will ultimately emerge from the pandemic relatively unscathed,” Prof Rossbach added.
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