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    The Price of America’s Complacency in the Face of COVID-19 Is Survival

    On Monday, California Governor Gavin Newsom ordered many businesses statewide to shut down in response to the raging resurgence of COVID-19 in nearly all 50 US states. That same day, a friend of mine landed in San Francisco after having spent six months living in Japan. On his flight, a United employee sitting behind him failed to wear a mask, as did numerous other people on the flight. No one said or did anything. Upon arrival, he was not asked where he had been or if he had any symptoms of the virus. His temperature was not taken and there was no mention of any requirement for 14 days of quarantine. He boarded a connecting flight and was on his way — six months after the pandemic that has ravaged the world began.

    Countries the world over have gotten so many basic elements of the battle against the virus right. Why not America? The unfortunate politicization of COVID-19, the failure to implement mandatory and consistent rules nationwide, the absence of rule enforcement, selfishness, laziness and a culture of silence are all combining to doom us to the consequences of our shared failure. Our collective apathy, complacency and idiocy are killing us.

    Should We All Have Been Wearing Masks From the Start?

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    Not long ago I was in Whole Foods, in the produce section where foods are not packaged, and a perfectly healthy-looking woman in her 30s was the only one not wearing a mask. No one said a thing until I approached her and said she needed to wear a mask and that it had been the law in Connecticut since April. I was told to mind my own business. It is my business, of course, and everyone else’s business in that store, yet no one said or did a thing as she continued to breathe all over the produce. I even went to store management and said something. They had to let her in because she said she had an underlying medical condition that prevented her from wearing a mask. It just so happens that the law in Connecticut allows for that exception, but no doctor’s note is required.

    There are plenty of reasons why America continues to lead the world in COVID-19 infections and deaths, but our own stupidity and selfishness have not been talked about much in the media. Every time we see someone not wearing a mask, or wearing it over one’s mouth but not the nose, or under the chin, we should be going up to that person and saying something. Every time. Our culture of silence is raging every bit as much as the virus in this country.

    So is local, state and national authorities’ failure to make mask-wearing and social distancing mandatory in all public places throughout the country, backed up by enforcement, which is a critical ingredient that is missing. Many governments across the world have backed their policies with strict enforcement measures and fines. That is why countries such as China and South Korea have been able to successfully battle the virus, and why Morocco, which just started doing the same, now has a reasonable chance of beating down infection rates.

    America is capable of doing all this, but the politicization of the virus and silly interpretations of what freedom of action means under the US Constitution have prevented us from following their example. Yes, you are free to take your own health and life into your own hands by being stupid and selfish, but you are not free to do the same with someone else’s health and life. And that is what the “Live Free or Die” movement and conspiracy theory believers among us fail to acknowledge.

    Every one of us needs to remind ourselves that other peoples’ actions impact us, and start to act accordingly. Say something when you see someone not wearing a mask in public, or failing to wear it properly. If everyone did so, those who are failing to do so would stop. The majority of us who are now wearing masks and social distancing have the power, but our own complacency is preventing us from taking control of inconsiderate fellow citizens. We have a responsibility to ourselves and everyone else to say something. We should also be putting pressure on lawmakers to crack down on violators and enforce mandates.

    Until America gets smarter about how to battle the coronavirus, we will continue to lead the world in infections and death, and we will deserve it. We have only ourselves to blame for being so dumb and failing to take corrective action. America has the resources to get COVID-19 under control, especially if we start treating this as a war and start acting like our collective survival depends on it — because it does.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    COVID-19 and Populism: A Bad Combination for Europe’s Banks

    As Germany takes over the EU’s rotating presidency, Chancellor Angela Merkel noted that the bloc is facing a triple challenge: the coronavirus pandemic — in retreat but still requiring constant vigilance — the EU’s steepest-ever economic downturn and political demons waiting in the wings, including the specter of populism. With the pandemic somewhat under control, European policymakers’ focus is shifting toward the knock-on effects of months of lockdown.

    Economies in Central, Eastern and Southeast Europe (CESEE) are in a particularly precarious situation, as a number of factors, from bad debt to populist legislation, are cramping the ability of the banking sector —which performs a vital role in stabilizing the economy through loans, payment holidays and other forms of financial support to local businesses in times of crisis  — to withstand a potential economic downturn.

    Bad Loans on the Rise

    A troubling report recently released by the Vienna Initiative (created during the 2008 financial crisis to support emerging Europe’s financial sector) has indicated that CESEE banks are facing a wave of bad loans, or non-performing loans (NPL), caused by the COVID-19 pandemic that could last past 2021. The issue of bad debt is by no means limited to CESEE countries, but the problem is exacerbated by populist political decisions in many nations in the region.

    European banking regulators had previously estimated that EU banks had built up adequate buffers to withstand a certain number of bad loans, with “strong capital and liquidity buffers” that should allow them to “withstand the potential credit risk losses.” But many banks in the CESEE region, operating in more volatile economies and with their reserves already whittled away by populist measures, are uniquely vulnerable if hit by too many NPLs.

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    At the heart of the problem is the fact that an excess of NPLs can drain banks’ capital reserves, making them reliant on support from governments and central banks. If the regulators and politicians don’t then put the necessary measures in place to support banks, the entire economy could be in danger of collapsing.

    Lenders in countries including Hungary, Czech Republic, Croatia, Slovakia and Bulgaria have sought reassurance from national authorities in recent months that they will receive the necessary protections should restrictive COVID-19 measures last much longer, particularly if the continent is hit by a second wave of the virus before a vaccine or an effective treatment is found. At present, it is unclear whether governments across Europe will be willing to continue with the same level of support packages to businesses and employees. 

    It’s not just a matter of renewing special coronavirus provisions. In return for providing additional financial support to businesses, lenders understandably expect reciprocal measures from governments and central banks. These include favorable tax measures, or the relaxation of excessive levies, so that banks are able to maintain their reserve levels, a lowering of countercyclical capital buffers and a guarantee of emergency financial support from central banks if necessary.

    Populist Measures Exacerbate Financial Strain

    In the wake of COVID-19, banking sector outlooks have already been revised to negative in several countries including Poland, Hungary, the Czech Republic and Croatia. These problems are in danger of being intensified by populist political decisions in many CESEE countries, where governments have a tendency to see punitive measures on banks as an easy way of shoring up popular support.

    In particular, many CESEE countries’ financial sectors are still suffering from 2015 decisions to convert loans taken out in Swiss francs into loans denominated in the euro or the local currency. The conversions came in response to a sudden surge in value of the Swiss franc, which had previously allowed lenders to offer low-interest loans. The forced conversions benefited borrowers but left the country’s banks to pick up the tab, making it difficult for them to build up capital buffers.

    While some countries which carried out the forced loan conversions, like Hungary, at least provided lenders with euros from the central bank to ease the blow, others, such as Croatia, left banks to shoulder the full loss. Croatia’s loans conversion, pushed through quickly ahead of the 2015 parliamentary elections, was applied retroactively, foisting a bill of roughly €1 billion on the country’s banks, many of which are subsidiaries of financial institutions from elsewhere in the EU. A pending court ruling on whether or not Croatian borrowers who had taken out Swiss franc loans could apply for further compensation could impose another €2.6 billion in losses on the banks at the worst possible time.

    Nor is the controversial loans conversion the only policy sapping CESEE banks’ capital reserves. As part of its coronavirus recovery plan, the Hungarian government announced a special tax on both banks and multinational retailers back in April. The additional banking tax was worth HUF 55 billion ($176 million). Prime Minister Viktor Orban had already announced the toughest COVID-19 measures of any central or eastern European country, including a suspension of all loan payments until the end of the year. The move ignored a call from Hungary’s OTP Bank for a reduction in taxes to help banks deal with the pandemic’s fallout.

    A number of other countries in the region, including the Czech Republic and Romania — though Romania later eliminated the levy — have raised banking taxes in recent years, making it harder for the financial sectors in these emerging economies to respond to the crisis and has left it in a more precarious position should the effects of COVID-19 continue into 2021.

    The CESEE region’s financial sector suffered greatly in the wake of the 2008-09 global financial crisis, and much work has been done in the intervening years to shield the sector from future downturns. The Vienna Initiative report, however, makes it clear that the region’s banks still face headwinds due to the COVID-19 crisis. Hopefully, policymakers across CESEE will take heed of the report’s findings and realize that trying to scapegoat banks in these uncertain times will only make them more vulnerable, leaving them ill-equipped to deal with the onslaught of loan defaults expected over the next 12 months.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    Getting Qatar’s Tourism Sector Back on Track After COVID-19

    COVID-19 has undoubtedly had a massive impact on the global tourism industry, perhaps none more so than in Europe, where many countries are considering or have already reopened resorts to limit the damage. While Qatar’s tourism sector remains small by comparison, there can be no denying that it has also taken a hit. However, this is not the first time the country has confronted an existential challenge to this increasingly important economic activity.

    Tourism makes a formidable contribution to the global economy. According to the World Travel and Tourism Council, in 2019 the sector accounted for 10.3% of global GDP and approximately 330 million jobs. Unsurprisingly, COVID-19 has been nothing short of a disaster for this vital sector. Thanks to lockdowns and other precautionary measures, this past April and May witnessed a near 100% reduction in tourist arrivals worldwide.

    The United Nations World Tourism Organization (UNWTO) warns that COVID-19 might yet result in the loss of 1.1 billion tourist arrivals, $1.2 trillion in revenues and 120 million jobs. Hotels are already feeling the pinch, with the Intercontinental Group expecting revenue per available room — a commonly used indicator — to have dropped by 80% in April. Other hotel chains have made equally gloomy predictions.

    Trouble Ahead

    Though not as developed as major destinations in Europe, North America and further afield, Qatar’s tourist sector has also suffered under COVID-19. Statistics for March indicate a 78% reduction in tourist arrivals, with the figures for April and May expected to be even worse. With lockdown measures still firmly in place, it remains to be seen how many of the country’s restaurants and local tourist facilities will emerge from the pandemic unscathed.

    Qatar’s hosting of the FIFA World Cup 2022 nevertheless underlines why its tourist industry needs to make as full a recovery as possible from COVID-19. It is expected that millions of fans will visit the country for the world’s top football tournament. Most will require accommodation and entertainment beyond the stadiums.

    In keeping with governments around the world, Qatar has initiated general support and subsidized loan programs to mitigate the impact of the coronavirus on business revenues. The country can also draw inspiration from a number of international efforts to restart the global tourism sector. These include 23 actionable recommendations developed by the UNWTO to mitigate the impact of COVID-19, accelerate recovery through national policies and build resilience through lessons learned.

    In a similar vein, the European Union has developed a comprehensive framework for rejuvenating its tourism sector. This calls for a recovery strategy and a common approach to lifting travel restrictions between member states. Additional measures include the development of detailed health and safety measures for hospitality establishments and the transportation of passengers and personnel to and from tourist destinations. In the case of the latter, Greece has already issued a list of protocols for traveling around its network of islands by ferry.

    When it comes to small states, Singapore has developed two initiatives that might be of interest to Qatar. The Marketing Partnership Program aims to improve cooperation and encourage synergies between stakeholders in the city state’s tourist industry. To assist, the program makes funds available for marketing costs and collaboration between businesses. From there, the Stories Content Fund encourages local and global content creators to create compelling and positive stories about Singapore’s tourist sector.

    Been Here Before

    These are by no means the only initiatives Qatar might look to when reawakening its currently dormant tourist sector. There is also a case for taking the best ideas from as many global efforts as possible to develop a hybrid action plan with two interconnected phases.

    Focusing on the short term, phase one is concerned with mitigating the impact of COVID-19 and restarting tourism activities following the easing of travel and social distancing measures. Taking a cue from Singapore, Qatar could develop public relations activities to highlight that the country is a safe and interesting place to visit. This could be supported by tourism vouchers for Qatar Airways stopover passengers, an initiative that resonates with the EU’s travel vouchers program.

    Phase two is focused on strategic and structural issues. As per the mandate of the Qatar National Tourism Council, the country should accelerate efforts to develop a clear vision for its tourist industry. Inspiration could be drawn from Australia’s bid to become “the most desirable and memorable destination on earth” or Morocco’s practical goal to make tourism an engine of development. Either way, Qatar needs to factor agility and resilience into its future tourism sector. This entails working with stakeholders to identify challenges as well as opportunities to diversify the country’s tourism offerings. Doing so will help shield Qatar from the volatility of limited market penetration.

    It should also be remembered that Qatar has prior experience of navigating its tourism industry through difficult times. In 2016, almost 3 million tourists visited the country, the majority coming from fellow Gulf Cooperation Council and Arab states. Tourist arrivals have nevertheless diminished in recent years due to the reduction of visitors from the states involved in the ongoing blockade of Qatar. According to the Qatar Planning and Statistics Authority, arrivals from the Arab world declined by 76% between 2016 and 2019.

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    Qatar has responded with a strategy to diversify tourist arrivals and new tourism markets. In the immediate aftermath of the blockade, nationals from 80 countries were granted visa-free entry into the country. The development of the Qatar National Museum and other tourist attractions was also expedited. High-profile marketing campaigns such as Qatar Airways’ “A World like Never Before” continue to highlight the diversity of the country’s tourist sector.

    Such initiatives undoubtedly contributed to a 38% increase in tourist arrivals from other parts of the world between 2016 and 2019. Additionally, hotel bookings rose from 4.97 million nights in 2016 to 5.38 million in 2018, suggesting that the average length of stay in Qatar has increased. The country’s museums also benefited from a fresh approach to attracting tourists, with visits rising from 477,000 in 2016 to 597,000 just two years later. According to the UNWTO, Qatar’s tourism sector generated $5.6 billion in 2018 despite the negative impact of the blockade.

    Qatar’s response to the blockade offers key insights into how tourism can get back on track once the worst of COVID-19 is over. Tourism sectors around the world will need to act quickly and decisively upon the resumption of business as usual. Well-executed, creative public relations campaigns should highlight what makes a country, resort or attraction a compelling place to visit. Diversity, safety and resilience will also be at the heart of tomorrow’s tourism strategies.

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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    The City on the Hill Has Lost Its Shine and Its Bounce

    In a dramatic headline, Yahoo News expresses its surprise if not dismay that a “staggering 62 percent of Americans no longer see America as Ronald Reagan‘s ‘shining city on a hill.’” Yahoo and YouGov published their poll to give an idea of the mood of the nation on this year’s Fourth of July weekend. The […] More

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    Will Paraguay’s President Abdo Benitez Redeem His Name?

    Paraguay’s current president, Mario Abdo Benitez, was elected in April 2018. When he was sworn into office in August that year, it represented a second consecutive five-year term in power for the conservative Colorado Party, following the right-wing presidency of Horacio Cartes. At 48, Abdo Benitez is one of the youngest heads of state in […] More

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    Trump Is Playing Peekaboo With the Pandemic

    If the United States had quick-thinking and efficient leadership, the pandemic would have infected about 100,000 people and killed only a couple thousand. That’s the experience of South Korea, times seven to account for the difference in population. If the United States had overwhelmed but reasonably sensible leadership, the coronavirus pandemic would have racked up […] More

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    Instagram Is a Strategic Communication Channel

    Communication between governments and citizens has changed over the years. The digital era has provided state actors with new channels to spread their messages. Different channels offer different types of outreach. Nevertheless, successful communication requires consistency and coordination. This is even more important in the current crisis we have witnessed with the coronavirus pandemic. In […] More

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    Who’s the Dealer and What’s the Deal?

    The verdict is in. Contrary to what some have maintained, what COVID-19 has provoked is not just another recession in the eternally recurring cycles of capitalism. Not even a Great Recession, like the one the world began wading through 12 years ago. This time, it is clearly our second Great Depression. And, who knows, it […] More