By B Izzak and Agencies
KUWAIT: The government yesterday approved the country’s first stimulus package aimed at supporting the national economy in the face of the coronavirus impact, pledging to provide cash to companies and individuals to prevent a liquidity crisis and to enable them pay salaries to their staff.
Meanwhile, the ministry of health announced yesterday 28 new coronavirus cases, 27 of whom are expats, including 24 Indians, two Bangladeshis and one Nepali. This raises the total number of cases to 317. Spokesman of the ministry of health Abdullah Al-Sanad said 80 cases have recovered and 237 others are under treatment, including 14 in the intensive care unit. Four cases are in critical condition. As many as 911 people have been discharged from ministry quarantines.
Following an extraordinary meeting of the Cabinet that continued until the early hours of yesterday, a statement said immediate financial assistance will be provided to vital economic sectors that include individuals, small and medium enterprises and companies. The aid aims at “helping them overcome the current circumstances through providing liquidity (cash) necessary for those bodies to meet their commitments,” said the statement, adding the measure aims at preventing a shortage of liquidity from becoming a crisis.
The statement said the economic study approved by the Cabinet was prepared by 82 experts and officials from both the public and private sectors. It said the stimulus is based on safeguarding public funds and using it to serve the national economy and is not intended to compensate companies and individuals. The package aims to ensure that citizens working in sectors impacted by the crisis are not affected, and that subsidies are maintained to preserve the prices of food and medical materials in the domestic market.
It calls for adopting the mechanisms that will ensure a minimum limit of income capable of meeting the cost of living of workers affected by the crisis and which are linked to employment contracts. It did not single out Kuwaiti citizens in this category, which could mean providing this service to expatriates too. The stimulus also provides help to small- and medium-sized projects, in addition to agricultural and industrial projects by delaying payment of installments of loans they had received from the development fund.
It also provides long-term easy loans to small and medium enterprises, jointly by local banks and the development fund, and also provides easy long-term loans from national banks to companies and customers affected by the crisis. It also calls for delaying the payment of monthly social security contributions for six months by private and oil companies to help them face the current cash crunch. The package also pledges to exempt productive sectors and cooperative societies from government fees, provided customers benefit from these breaks.
The Cabinet set up a committee presided by the governor of the Central Bank and the membership of ministry of finance undersecretary and managing director of Kuwait Investment Authority to implement the stimulus package. It also set up a higher committee, assisted by a strategic team, to supervise the implementation of the support program. But Boursa Kuwait welcomed the government aid with a drop, apparently not very pleased over the extent of the incentives.
Saudi Arabia’s hajj minister asked Muslims on Tuesday to temporarily defer preparations for the annual pilgrimage amid uncertainty over the coronavirus pandemic. Earlier this month, Saudi Arabia suspended the year-round umrah pilgrimage over fears of the new coronavirus spreading to Islam’s holiest cities, an unprecedented move that raised uncertainty over the annual hajj.
“Saudi Arabia is fully ready to serve pilgrims and umrah seekers,” hajj minister Mohammad Benten told the state-run Al-Ekhbariya television. “But under the current circumstances, as we are talking about the global pandemic… the kingdom is keen to protect the health of Muslims and citizens and so we have asked our brother Muslims in all countries to wait before doing (hajj) contracts until the situation is clear.”
Saudi authorities are yet to announce whether they will proceed with this year’s hajj, scheduled for the end of July. The pilgrimage – which last year attracted 2.5 million people – is a key revenue earner for the kingdom. But it could be a major source of contagion as it packs pilgrims closely in religious sites.
The coronavirus pandemic has claimed more than 30,000 lives in Europe alone, a global tally showed yesterday, in what the head of the United Nations has described as humanity’s worst crisis since World War II. Italy and Spain bore the brunt of the crisis, accounting for three in every four deaths on the continent, as the grim tally hit another milestone even though half of the planet’s population is already under some form of lockdown in a battle to halt contagion.
Across the Atlantic, President Donald Trump warned of a “very, very painful two weeks” as the United States registered its deadliest 24 hours of what he called a “plague”. America’s outbreak has mushroomed rapidly. There are now around 190,000 known cases – a figure that has doubled in just five days. Some 41,000 deaths have been recorded worldwide from more than 830,000 infections since the pandemic emerged in China in December.
For UN Secretary-General Antonio Guterres, the extraordinary economic and political upheaval spurred by the virus presents a real danger to the relative peace the world has seen over the last few decades. The “disease… represents a threat to everybody in the world and… an economic impact that will bring a recession that probably has no parallel in the recent past. “The combination of the two facts and the risk that it contributes to enhanced instability, enhanced unrest, and enhanced conflict are things that make us believe that this is the most challenging crisis we have faced since the Second World War,” he said.
As companies shut down for undetermined periods and entire workforces are forced to stay home to halt the spread of COVID-19, scenes of economic desperation and unrest were emerging across the globe. In Italy, queues were lengthening at soup kitchens while some supermarkets were reportedly pillaged. Half a million more people now need help to afford meals, Italy’s biggest union for the agriculture sector Coldiretti said, adding to the 2.7 million already in need last year.
“Usually we serve 152,525 people. But now we’ve 70,000 more requests,” confirmed Roberto Tuorto, who runs a food bank association. It was crucial to “ensure that the economic crisis unleashed by the virus don’t become a security crisis,” he warned. The economic pain of lockdowns is especially acute in the developing world.
In Tunisia several hundred protested a week-old lockdown that has disproportionately hit the poor. “Never mind coronavirus, we’re going to die anyway! Let us work!” shouted one protester in the demonstration on the outskirts of the capital Tunis. Africa’s biggest city Lagos was set for its second full day of lockdown yesterday – but with some of the world’s biggest slums, home to millions who live hand-to-mouth, containment will be difficult.
Wary of a collapse of the world’s economy with shops shuttered and millions forced into shorter working hours or losing their jobs completely, the globe’s leading central bankers have pumped billions of liquidity into the system. Last week, G20 leaders said they were injecting $5 trillion into the global economy to head off a feared deep recession. In the European Union, however, battle lines have been drawn over the terms of a rescue plan.
Worst-hit Italy and Spain are leading a push for a shared debt instrument – dubbed “coronabonds”. But talk of shared debt is a red line for Germany and other northern countries, threatening to divide the bloc. The tone sharpened this week, with Italian politicians even taking out an advertisement in a major German newspaper to remind Europe’s biggest economy of WWII debts in a bid to jolt it into action.
The economic cost of the crisis could still worsen as lockdowns remain at the forefront of official disease-stopping arsenals – a strategy increasingly borne out by science. Researchers said China’s decision to shutter Wuhan, ground zero for the global COVID-19 pandemic, may have prevented hundreds of thousands of new cases. “Our analysis suggests that without the Wuhan travel ban and the national emergency response there would have been more than 700,000 confirmed COVID-19 cases outside of Wuhan” by mid-February, said Oxford University’s Christopher Dye.
At the same time, focus is now turning to how asymptomatic cases may be fuelling the spread. China yesterday said it has more than 1,300 asymptomatic coronavirus cases, the first time it has released such data following public concern over people who have tested positive but are not showing symptoms. Experts agree that asymptomatic patients are likely to be infectious, but it remains unknown how responsible they are for spreading the deadly virus.
Chinese respiratory expert Zhong Nanshan said in a state media interview last week that asymptomatic carriers could potentially infect “3 to 3.5 people each”. Germany and France were also ramping up testing of the population to establish how many already have immunity.
The inundation of patients has sent health facilities worldwide into overdrive. Emergency hospitals are popping up in event spaces while distressed medical staff make grim decisions about how to distribute limited protective gear, beds and life-saving respirators. In scenes previously unimaginable in peacetime, around a dozen white tents were erected to serve as a field hospital in New York’s Central Park.
But even with the extended capacity, doctors say they are still having to make painful choices. “If you get a surge of patients coming in, and you only have a limited number of ventilators, you can’t necessarily ventilate patients,” Shamit Patel of the Beth Israel hospital said. “And then you have to start picking and choosing.”