Martin Wolf has said with the current lockdown seen across the world, people won’t be just staying home and starving to death if they have no means of earning left.
Financial Times economic commentator Martin Wolf. (Image: Moritz Hager/WEF)
As the world witnesses the biggest ever lockdown across nations to tackle the coronavirus pandemic that has killed over 1,80,000 people worldwide and put millions out of job, Martin Wolf, Chief Economics Commentator of Financial Times said governments must support people so that they don’t venture out looking for help.
Speaking at the India Today E-Conclave, Martin Wolf, a noted expert on world economics, said, “If people can’t go out and work, they can’t be expected to stay at home and starve to death. The first priority should be to support their living standards. The second focus of governments should be to support companies.”
“My view is that governments should put a hold on all bankruptcy proceedings and encourage banks to support companies,” said Wolf.
Speaking on the great economic crisis that companies across the world are facing, putting millions of people out of jobs, Wolf said governments must protect the companies.
“At the end of this, there will be some businesses that will be completely devastated and the government will have to look at those industries and see what sort of bailouts are appropriate,” he said.
Asked about what economic measures a country like India can look at considering that we are under a lockdown of minimum 40 days, Wolf said India’s focus should be on maximum utility of healthcare resources.
“First, you have to use all medical resources you have and can create to deal with the medical side of the crisis. We know India has a relatively limited healthcare system so this is going to be quite a challenge,” Martin Wolf said.
He added, “Then, you have to protect people who are dramatically affected by the crisis. In the developed countries, we have rightly put in place systems to protect people’s salaries. This is aimed at people’s welfare. That’s what you have to do but this is an enormously expensive process.”
The economics expert further said that such measures will escalate the fiscal deficit. “Public debt will rise. I think India needs to run a large fiscal deficit,” he said.