The corona virus is the first disruptive factor in global economy. Namely, this pandemic has caused a unique phenomenon of a global economic standstill that covers both undeveloped and developed countries of the world. Currently, all normal economic developments are suspended while awaiting the post-corona virus period in which operation would continue.
Analyzing the measures passed by some countries in order to mitigate the effects of this global economic standstill, I have noticed that all of them were guided by one basic objective – to preserve employment. There have been diverse macroeconomic approaches of the states where some decided to try to solve by their measures several issues in the economy at once. Acting in this way, they have probably only scratched the surface without resolving seriously any of them.
On the other hand, the Government of the Republic of Serbia has tried to make its macroeconomic measures influence on the basic short-term issue of the economy. Namely, in managing a company or a household finance the basic parameter that must always be taken care of is the liquidity as a prerequisite for survival. This line of thinking was evidently the guideline for the creators of our macroeconomic policy at the time of crisis because with their proposed measures their principal intention was to resolve the negative effects of this crisis on the liquidity of companies. Naturally, all economic operators are aware that these measures help in the short run, but that in the long run the companies will have to resolve their difficulties by themselves.
Taking into account that our government has by its measures provided assistance when liquidity is concerned, the companies in Serbia have to start thinking right now about the post-crisis period. It is necessary to have in mind that the government measures relate to one quarter in this business year, but that it is already now evident that because of the time and geographic development of this global pandemic disrupted (different) economic developments are expected in (minimum) one more, and/or next quarter. Accordingly, the strategy of company management in Serbia needs to be adapted to the fact that the pandemic will discontinue in certain parts of the global market earlier and in some parts at a later stage.
What does it concretely mean? Well, minimization of the negative economic effects of the corona virus is possible if the companies are already actively searching for the alternatives for their standard markets of purchase and sale. Naturally, it is not simple at all, but is simpler if we bear in mind that the competition existing on such markets will be lagging behind due to the pandemic. It is therefore necessary to determine strategically where and when a certain product can be produced and from where merchandise, raw materials or semi-finished products can be imported. This short-term substitution of standard business processes is the key for the survival of companies in the period following the present crisis.
The state has helped the issue concerning the liquidity, but has neither resolved (nor can) resolve the issue of losses incurred in individual enterprises. The enterprises that fail to adapt, and/or those that expect that their operation can become “normal” after one quarter in this business year will most probably be facing accumulated losses until the end of this business year. These losses are irrecoverable even for the enterprises that were exceptionally solvent and profitable before the present economic standstill.
The challenges of the current economic standstill are solvable if one departs from the standard and “run-in” models of doing business by the companies. The principle of the management waiting for the business activity to return to the one before the pandemic is the most expensive and the worst solution for a company. Not because the economic activity will not return to the levels before the current crisis, but because such expectation it not at all economically feasible.