Shutdowns stoke debate over what’s an ‘essential industry’

Published March 25, 2020
A railway employee talks on the phone inside an empty train compartment after railway services were shutdown by the authorities to limit the spread of the coronavirus in India on March 23. — Reuters
A railway employee talks on the phone inside an empty train compartment after railway services were shutdown by the authorities to limit the spread of the coronavirus in India on March 23. — Reuters

BRUSSELS: Shortly after British Prime Minister Boris Johnson ordered the closure of non-essential retailers on Monday to curb the spread of coronavirus, the parent company of Sports Direct wrote to its staff to let them know: the next day would be business as usual.

Its argument — that selling sport and fitness equipment was vital during a national shutdown — was promptly rebuffed by the government, and the plan to keep its stores open was ditched.

The brief spat underlines the dilemma for governments defining what are “essential industries” as they try to flatten the curve of infections to save lives while keeping their economies from falling off a cliff.

US President Donald Trump came right out on Monday and said what other governments may be quietly thinking: “We cannot let the cure be worse than the problem itself.”

Data on Tuesday showed that business activity around the globe has collapsed this month as millions obey orders to stay at home to avoid infection with the highly contagious virus.

Trump said he was considering how to reopen the US economy when a 15-day shutdown ends next week, telling a White House news conference that his administration would not allow the crisis to turn into a long-lasting financial problem.

But voicing what many might see as choosing the economy over lives requires delicacy.

Johnson’s senior adviser, Dominic Cummings, on Monday firmly denied a newspaper report that last month he had outlined the government’s coronavirus strategy as “herd immunity, protect the economy and if that means some pensioners die, too bad”.

“Excessive Discretion”

The difficulty for governments lies in deciding what industries are critical.

On Tuesday, just 12 hours after Johnson had ordered a draconian clampdown, minister Michael Gove was asked on a TV breakfast show why groups of workers were still being allowed at construction sites.

Italy, which has suffered the deadliest coronavirus outbreak, decreed on Sunday that non-essential businesses must close until April 3 – but set out a long list of exceptions deemed vital to keep supply chains running in Europe’s second-largest manufacturing economy.

Unions in the worst-hit Lombardy region panned the list as “excessively extended, covering areas of dubious importance” and allowing firms “excessive discretion” to apply for exemptions, and promptly called a one-day strike.

Amazon announced at the weekend it would stop shipping non-essential products to Italy and hard-hit France, where lockdowns have been imposed.

One worker at a French distribution centre for the world’s largest online retailer said last week that employees were dispatching non-essential items from small workspaces that did not allow staff to keep their distances.

“These are DVDs, video games, iPads and smart phones,” said the worker, who declined to give her name for fear of losing her job.

Amazon stopped shipments of non-essential items due to a spike in orders and the need to respect anti-coronavirus safety measures in workplaces, a spokesman said.

As more US states moved to impose stay-at-home orders on Tuesday, industries from steelmakers to auto dealerships scrambled for exemptions that would allow them to remain open.

The National Association of Manufacturers has urged states to declare all manufacturing facilities and supply chains part of “essential infrastructure” and “essential businesses”.

“Cash flow and survival are the key words here,” said Gary Hufbauer at the Peterson Institute for International Economics. “As the shutdown continues, more and more firms will seek to be designated essential.”

Published in Dawn, March 25th, 2020

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.