Butterfly Effect: Rebuild the Economy — While in Lockdown
WHY YOU SHOULD CARE
We're being told we need to pick between our health and the economy. That's not true.
Charu Sudan Kasturi
OZY Senior Editor Charu Sudan Kasturi's column, "Butterfly Effect," connects the dots on seemingly unrelated global headlines, highlighting what could happen next and who is likely to be impacted.
By Charu Sudan Kasturi
Jerusalem had planned to extend its light rail along key routes starting in October 2020. But an unforeseen window opened up earlier — owing to the coronavirus pandemic — allowing the city to fast-track its construction schedule to begin in April.
Around the world, streets have fallen silent as lockdowns have brought the economy and all signs of it — traffic, manufacturing, people in public — to a standstill. But Jerusalem is using reduced road traffic during the lockdown to speed up public infrastructure and construction projects that are otherwise eyesores and represent frustrating detours and roadblocks for people driving to work or school.
It’s an example of what the world can smartly get done while most people are sheltered at home. In the U.S., across Europe and in large parts of Asia, we’re being told we’re trapped in a zero sum game where we must choose between our physical health and the economy. Stay-at-home orders must be lifted, we’re being told, before the economy can be restarted. Yet one sector that economists and politicians alike recognize as central to rebuilding the economy — construction of public infrastructure — can actually gain from the lockdown period.
Projects that normally take years because workers can only hold up traffic for a few hours every day can now proceed at much faster speeds — while creating jobs or at least keeping them intact. It’s an opportunity some cities and countries are embracing. Bogotá, Colombia, is using the period of reduced traffic to expand its network of bike paths. Hyderabad in southern India is expediting work on a major overpass. In Italy, the city of Genoa has used the period to finish the reconstruction of the Morandi Bridge that had collapsed in 2018, killing 43. Australia has allowed construction work to continue amid lockdowns.
In the U.S., Florida Gov. Ron DeSantis has said he’s accelerating $2 billion worth of interstate highway construction while the state remains under stay-at-home orders. Oregon’s shelter-in-place orders allow construction work. Los Angeles is extending its Metro system at a time California has seen road traffic drop 60 percent. Reno, Nevada, is speeding up work on a bus rapid transit system.
Yet these efforts are outliers in a world where construction of public infrastructure has largely been put on hold amid the pandemic. In the U.S., we’re seeing piecemeal initiatives from different cities, but there’s nothing binding them together under a coherent strategy.
That’s a missed opportunity for the world’s largest economy.
President Donald Trump and Democratic Party leader Nancy Pelosi for once appear to be on the same page. Trump has said he wants to spend as much as $2 trillion on infrastructure in a second stimulus package. Pelosi too is pushing for enhanced infrastructure spending as a key component of the next federal economic response. Even as they wrangle over what the specifics of an infrastructure deal could look like, they could work together to build a national consensus on expediting public works projects during the lockdown.
Yes, there are challenges. Safety of workers and others involved in these projects is paramount. In Australia, some construction workers on ongoing projects have tested positive. In many parts of the world, construction work is driven by migrant workers, who’ve now gone home. Contractors might struggle to find supplies for their projects even if they’re allowed to work. And while cities might be willing to expedite infrastructure initiatives during a lockdown, those projects might be stuck in red tape, awaiting state or federal clearances.
But that’s precisely why a coordinated approach, led by the federal government in consultation with states, could prove critical in helping fast-track infrastructure projects that do meet safety guidelines for workers. That big picture game plan would allow governments to work together to ensure migrant workers are cared for while they work on these projects, and that bottlenecks in approvals or construction industry supply chains are cleared.
Done right, America could immediately kickstart a 21st-century version of President Franklin Roosevelt’s Works Progress Administration, an initiative that gave employment to more than 3 million people after the Great Depression, and laid the foundations of the country’s modern infrastructure.
As Bogota and Brisbane, Jerusalem and Genoa have shown, it can be done even with restrictions in place on most movement and activities. It’s the smartest way to ensure that when lockdowns do lift, the economy will already be in first gear, its engine ready to rev.
- Charu Sudan Kasturi, OZY AuthorContact Charu Sudan Kasturi