Editor: The following is my take on the writings of Parissram Jaggernath.
The paradox of thrift, also known as the “paradox of savings”, is an economic theory that explores the idea that, during a recession, individual savings can be damaging to a nation’s economy, encouraging reduced spending and thus cause economic decline.
The article explores the idea that the COVID-19 pandemic has permanently changed the financial and economic landscape and that in order to survive we must become adaptable and flexible to a constantly changing environment. There may never be a new normal because every time a standard is set, it may be destroyed and replaced. As a result, only the fittest of businesses may survive and only by being visionaries, ever growing and continuously creative.
Banks, being the backbone of local economy have remained strong in the face of this new change. They can in turn now strengthen the nation by evolving in their dealings with the public by updating policies, lowering interest rates on loans and increasing lending to small businesses. This would help in stimulating economic growth, since small businesses contribute to the economy by providing innovation and employment. More people employed is more people with disposable income resulting in increased spending, which in turn keeps businesses open.
There is now an opportunity for the evolution of strong companies especially the regional front-runners, to fit the new Caribbean environment. A merging of strengths, expertise and resources can result in the creation of new regional entities that would ensure the competitiveness and continued survival of all.
At a national level, at this time, it would be prudent use available funding to implement steps that would provide a heritage and an improved quality of life for future generations. These steps include;
- A focus on providing equal access to basic necessities.
- Improvement of the national transportation infrastructure.
- Investment in local produce that have the potential to compete on the global market.
- Development in underused communities and their people resource.
- Repurposing of failed or stagnant agricultural ventures.
In short, businesses must evolve, becoming adaptable, reimagining their products and services, distribution and supply chains and interactions with the public to not only survive but thrive in this new post-Covid climate. There is an opportunity for the rise of stronger, more resilient enterprises if traditional competitors pool their strengths. Nationally, it may be beneficial to inject funds into small businesses and community initiatives in order to encourage spending which fuels economic growth.
R. S. Stronghold