ARE YOU READY FOR THE RECOVERY OF YOUR BUSINESS?

ALTHOUGH THERE IS STILL NO PERSPECTIVE ON HOW LONG WE WILL REMAIN IN THIS STATE OF PARALYSIS, international markets are already showing full optimism regarding the resumption of their activities. Preparation for this moment starts now!

After witnessing the gradual recovery of the Chinese economy—even with the presence of new cases of the disease and the possibility of a second, smaller wave in the Hubei region—we have begun to see the same scenario forming in Europe. More specifically, Austria and Italy have been leading the initial gradual reopening.

Similarly, the United States, especially after publicly reporting a decline in the number of deaths, has been sending strong signals of accelerating the reopening of its economy.

In the case of the U.S. government, the Centers for Disease Control and Prevention (CDC) believes that reopening should be gradual, emphasizing the importance of state-level preparation for this process. It appears that this scenario could unfold as early as May 1st, 2020.

On the other hand, the discourse on economic recovery in our country is gaining strength, especially when we highlight data released by the CNI – National Confederation of Industry. In its March business survey, the study revealed that the impacts of the pandemic have been increasing, with 92% of companies surveyed being negatively affected, 40% of them severely.

Considering these data, and comparing them with movements observed in foreign markets, it is worth reflecting on how we will resume our activities.

Moreover, it is easy to conclude, based on indicators, that the domestic market will be severely impacted for a long period. A lack of preparation for this moment will certainly result in major difficulties for business leaders. We are not only talking about Brazil, but about all major markets, which are now considered highly volatile and insecure.

Thus, the question arises: What should we do? How can we prepare for a less traumatic and more efficient recovery?

According to Professor Rudinei Toneto Junior from the School of Economics, Business and Accounting at the University of São Paulo in Ribeirão Preto, the answer is not simple, as there is no comparable crisis. In his words: “It is very difficult to predict now how much production chains will be disrupted, how much the shutdown in China, which is now recovering, has interfered, how many Brazilian industries will have to stop due to lack of raw materials, and how much this population quarantine will affect sectors.”

In addition, Brazil’s current political polarization further complicates decision-making and the implementation of protective measures for the market.

One of the main necessary measures for a less traumatic recovery is the impact that monetary policy, when applied, will produce. We are aware of the government’s operational difficulty in implementing measures quickly and dynamically; however, this effort seems essential to give businesses the necessary breathing space to reorganize strategically and adopt better containment and development measures.

It is also worth remembering that, no matter how difficult and complex the rebuilding of commerce, a sector, or even a specific industry may be, it will have to be done. The time is now. Let us think and rethink strategies so that the scars are as small as possible. We believe in Brazil and we will fight for better days.

Arthur Martinho – International VP of IBREI

Rafael Bernardi – Government Relations Director of IBREI