Corporate DispatchPro MATTHEW BUGEJA
The private sector
and bailout sustainability There is a term to describe what COVID19 is: a black swan event. Perhaps one of the best definitions of a black swan event comes from the website, Investopedia: A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the widespread insistence they were obvious in hindsight. No matter how you dissect it, COVID19 hits every single one of those factors. It was largely an unpredictable event, and has had very severe consequences. A global pandemic is rare, the impact is almost unheard of, and with the benefit of hindsight, we can probably say that the warning signs from the initial outbreak in Wuhan, China were there for all to see. The novel coronavirus’ impact has been both wide from a geographical perspective, and deep from an economic standpoint. This piece will focus on the impact to businesses and the assistance given to them by their governments, and try to understand how certain can survive the havoc wrought by the pandemic. Businesses have been devastated by the lockdown imposed by governments in order to contain the spread of COVID19. If people are not allowed to physically leave the house in order to engage in economic activity, a lot of businesses will suffer considerably. A few easy examples in order to illustrate this point include cinemas, airlines, hotels, restaurants and nightclubs. These businesses need people to be physically present in order to provide their service, and the more customers they have, the better. COVID19 has shut these down for the foreseeable future, through no fault of their own. So how do they move forward? Should governments continue to provide funding on an open-ended basis? Can they afford to? 33
www.corporatedispatch.pro
