The difficulties of war against an invisible enemy



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## The difficulties of war against an invisible enemy

18/06/2020 |
SCP

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* [![ opinio-vicente-castello VCR](/com/investigacio/arxiu/noticies/2020/6/opinio-vicente-castello/VCR.jpg)](#)

Albert Camus said that a good way of getting to know a people is to find out how they work. So having seen everything all the people taking care of us are doing, we have to value genuine honesty at least. The current slowdown in economic activity and interruption of a considerable amount of productive activity, together with the limitation on people’s mobility, are the result of attempts to stop the worldwide spread of COVID-19. This is not a financial crisis or even a crisis of excess production due to lack of demand.

There is no historical precedent for it and no comparable experience. Some say that the epidemic is like a war, but war can provide no reference for it. In his novel *Moby Dick*, Herman Melville uses the metaphor of a whale to represent unintentional evil, while war is intentional or premeditated evil.

We must remember that this is not a sporadic crisis affecting one region, it is a worldwide crisis of considerable magnitude in the short term. It is affecting economic activity and employment in the most developed economies, such as the United States. The unemployment rate there has leapt from 3.5% to 14.7%, and in the last six weeks the number of unemployed people has increased by 30 million, which, according to the BBC, represents the worst unemployment rate since the Great Depression of 1929.

The economic crisis is not exclusive to the United States, however, and although the crash is symmetrical, because it affects all countries equally, its consequences are not. In Europe, the impact of the coronavirus could destroy more than 59 million jobs. In the United Kingdom, the Bank of England warned of the most acute recession in its recorded history, and it predicts the British economy will shrink by 14%. According to some estimates, this figure could make the UK the European economy worst affected by the coronavirus, doubling the number of people unemployed. In France, where activity has fallen by more than 33% and there has been a negative impact on GDP (down six percentage points), 453,800 jobs were destroyed according to the French National Statistics Institute (INSEE). Germany expects its GDP to fall by 6.5%, according to the European Commission.

Spain is not immune to all this, of course. The measures required to contain movement and contract the economy were adopted with asymmetrical repercussions on jobs for different regions and industries depending on their level of tourism activity.  
 The European Commission’s forecasts indicate that GDP will fall by up to 9.4% and that the unemployment rate will significantly increase, to 18.9%. This also points to the fact that Spain’s recovery will be slower than that in other countries because of the specific importance of the tourism sector in our economy. For this reason, mobility will be fundamental.

It must be borne in mind that the productive structure of our economy is strongly orientated towards the tourism industry, which represents about 15% of GDP and provides work for almost three million people. It is good that each country should specialise in something. As the economist David Ricardo said, nations must focus on what they can do better than others. Historically, this industry has been an umbrella providing protection against the various economic crises we have been through, and it has contributed to economic recovery, but this time tourism is the industry that has most to lose.

The deterioration of economic activity is having a very serious effect on the job market. According to the Spanish Employment Ministry, unemployment rose in March and April by more than 584,000 people (+18%) to a figure of around 3.8 million unemployed people. The statistics show that three-quarters of the increase in unemployment is concentrated in the six regions which have a total of 75% of tourist industry jobs. Specifically, the rate has increased in Andalusia (21%), the Balearic Islands (26%), the Canary Islands (23%), Catalonia (18%), the Valencian Community (20%) and Madrid (15%), compared with an average of 14% in the other regions. From this, the correlation between the development of the variables in the tourism industry and the job market can clearly be deduced.

Despite this, the above indicators are not enough to provide a better view of the development of the job market. We should also consider the lay-offs (temporary redundancy procedures or ERTEs), amounting to 1.6% of GDP, according to the think tank Funcas. These have allowed large numbers of workers (3.4 million) to remain registered with the social security system without actually working. To 30 April, the worst affected activities in terms of jobs have been the following: accommodation (-75%), travel agencies (-75%), games of chance (-70%), food and drinks (-62%) and air transport (-48%).

Meanwhile, the recovery is expected to be slow, particularly in areas linked to tourism, as most industries are months behind manufacturing and construction, which were the first to begin their activities. Not all industries will recover symmetrically, so their contribution to GDP will be different in each case, and at different times. We must not forget the automotive sector, which already had its own problems before the crisis brought about by the pandemic.

**Vicente Castelló, Universitat Jaume I lecturer and member of the Interuniversity Institute of Local Development**

**This article was published in the newspaper** *Cinco Días* **on 1 June 2020.**

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