Tue, 02 June 2020
Regular columnist, Pria Masson Tanwar, continues her ruminations on the post-coronavirus future.
While continuing to analyse the situation and understand the many complex issues on the path to recovery, I chose to take a top-down approach – I started with the larger businesses and more capital-intensive, state-owned and -run projects.
Every economy had infrastructure planning underway when the pandemic hit us. This was based on the needs of the economy at that point. The question I wanted to then ask was, has the need changed? Do roads, transportation infrastructure, education infrastructure, utilities etc have modified demand? Or do we need to re-think how to provide these and, perhaps, also understand why providing them could be a significant step on the path to recovery?
For oil dependent GCC economies, even before the pandemic, there was a clear understanding of the need to diversify revenue sources. Which is why travel and tourism, hospitality, retail, aviation and logistics have been getting varying levels of impetus from the governments and incentives for private investment. But what will the new way be?
To my mind, one change could be an increase in public-private partnerships across sectors. It’s a common way for governments to undertake large infrastructure projects. How it works is that the government delegates a project – with support – for a price to a private operator on what’s called a build-operate-transfer model. That means that for a set amount of time, the private operator gets revenue from the project and shares it with the government. This is quite common for toll roads, railways, airports etc and has some application in healthcare, education and waste management.
The other change could be more flexibility around the use of existing infrastructure – the fact that this can be done is evident with how efficiently healthcare facilities have been put in place across the region – either by building assets or by utilising existing assets. The same concept can be extended to remunerative uses as well.
The third change I’m anticipating is a lot more focus on affordable businesses. With vulnerability to income more exposed than ever, these could see new interest. Two sectors strike out, one is healthcare and the other education. In healthcare, good quality healthcare at an affordable level is a requirement across the world. Government systems cannot always cater to all needs. There are those that are most vulnerable who need free healthcare. Then there are those that can easily afford private healthcare. It is the zone in between that suffers and will see increased demand. This holds true in education as well.
Difficult times call for difficult changes and new partnerships. Perhaps one new partnership should be one between governments and their citizens/residents. The governments have been trying to do what they can to keep us safe. They have provided stimulus and tried to balance the remarkably diverse needs of their countries. If we, as residents, realise that everyone, even the government, is stretched beyond their means, we can be more open to sharing some of the burden and finding new ways to progress together.
Pria is an Advisor with JEO Capital Management Consultants (http://www.jeomanagement.com). You can follow Pria at her Instagram handle money_cues or know more about her professional experience at http://www.i2d-consulting.com