Reviving the economy | Kuensel online

Much to the relief of many, especially those in the private sector, the government will implement the fourth phase of monetary measures to revive the economy. The strategy is developed. The government will look at three windows – covering past non-performing loans, current credit portfolio and future credits.

Business may not be business as usual, but it has improved since the government lifted all Covid-19 restrictions. A month ago we were operating under strict restrictions. Look around and we will see that the way we do business has returned to the pre-Covid-19 era, although the threat remains.

The decision to pursue monetary measures to support the private sector is a welcome decision. It may have become a cliché, but if you have a strong private sector or an industry that promotes growth, you need fiscal or monetary measures to support them. What growth it would bring is the bigger question. Over the past two years, the private sector has benefited from the government’s monetary and fiscal policies. It may be exaggerated, but it is said that some have benefited from the pandemic and the measures while many have lost.

Financial institutions had suffered losses due to the increase in deposits. Banks make money by lending. It became the opposite when they had to pay interest on increased deposits. The pandemic and our policies have helped some to invest in luxuries like expensive cars. The government and central bank are expected to offer prudent financial policies as the country recovers from the Covid-19 pandemic which has disrupted business. Politics should benefit everyone. There are enough lessons to learn. Many wonder why a few wholesalers have had access to generous and cheap loans while others have struggled to access financing.

The problem of non-performing loans was not born of the pandemic, although it made it worse. So-called financial experts are ready to support financial policies, but there is more to it than is made public. The NPL happened long before the pandemic. It’s not just in agriculture or services. It happened because of the greed for profit.

Decisions such as increasing the gestation period of loans, reducing bureaucracy in accessing finance and making loan repayments easier are welcome. This will ease the financial burden on the private sector. What is also important is to identify which sector needs help. While the policies aim to fuel the private sector, the so-called engine of growth, this could backfire.

As we move into a new normal with all restrictions lifted, it would be wise to identify which sector needs help. Tourism and hospitality are still reeling from the pandemic. They need time and political intervention to recover. A one-size-fits-all policy in the private sector could be flawed. We have time and we need to identify who or what sector could benefit from government policies.

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