Sustainable Stimulus in a Post-Pandemic World

As nations around the world slowly recover (or in some cases, regress) in the global fight against Covid-19, plans to stimulate economies with legislature are being drawn up and enacted. The Philippines is no exception, with the proposed House Bill (HB) No. 6185 or the Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (ARISE Philippines) having recently been given the final nod by the House of Representative last June 4, 2020.

The proposed stimulus proposes financial assistance to micro, small, and medium enterprises (MSMEs) alongside critically impacted sectors such as the tourism industry. It plans on creating jobs through infrastructure projects, while financing small businesses. Wage subsidies and cash-for-work programs are all part of the P1.3 trillion package.

While this package in unquestionably beneficial to stem the losses that business have incurred over the past few months, it seems difficult to shake off the feeling that this proposed “new normal” looks a lot like… the regular old normal. The world had been irrevocably and unquestionably changed by this event- there’s no going back to a pre-pandemic global market. While it is important to address the immediate economic impact of Covid-19, it is just as important to look ahead and prepare for future markets with that one much-touted, all-important word in mind: sustainability.

The Brundtland Report put it best: “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” It’s about time that sustainability be an integral part of any policy-making, especially in the light of the current disaster. How can sustainability fit into a proposed economic stimulus though?

Looking around the world at various proposed stimuli, the “bailout” of affected sectors seems to be almost universal. Airlines have been beneficiaries of some of the largest, cheapest loans globally. In the UK, the world’s largest chemical producer BASF, received the largest loan. This despite only employing 850 workers locally. Both the aforementioned industries are historically large polluters, and employ relatively low percentages of local populations. Despite this, Covid related loans remain large, cheap, and without any commitments tied to them regarding emission reduction. In the words of Ms. Fiona Nicholls from Greenpeace, “we should be seeing a lot more public benefit from all this public money.”

ARISE Philippines has certain labor commitments to its financial packages- wage subsidies are granted only if workforce is retained throughout the lockdown period. While this is important to ensure that jobs are kept and maintained, perhaps sustainability commitments should be tied to financial aid for historically destructive sectors too. Transportation, tourism, and aviation are all sectors that may be considered critically impacted, but are all sectors as well that need to make a sustainable transition anyway- why not couple financial aid with this transition? If ever there was a time to do it, it’s right now.