Governments around the world need to legislate to enact an immediate moratorium on commercial rents and loan payments to preserve the global economy.
With revenues slashed as the world population goes to ground and international borders go up, businesses large and small will quickly go broke en-masse without immediate relief.
Government should also look at freezing rates and taxes, particularly payroll tax.
Even if businesses wind down and switch to skeleton staffs to keep trading they will be crippled if rent, interest and loan repayments, have to continued to be paid.
The retail sector will be the hardest hit, and most establishments, large and small, independent and franchised, big brands and no brands will end up in receivership, and likely into liquidation.
Already restaurants, cafes, bars and theatres in major cities such as New York, Washington DC, and Los Angeles have been forced to close, while hotels and other accommodation establishments around the world have lost almost their entire revenue. These businesses cannot be expected to continue paying rent for premises that cannot be used or their clientele has been forced to stay away because of (necessary) government restrictions and controls.
The tourist sector too, hotels, motels, backpackers, serviced apartments and resorts will have to reduce trading and in some cases suspend as international traffic has dried up, and domestic travel has been reduced to stand-still as governments encourage social distancing. Corporations are ordering executives not to travel, and no-one wants to engage in leisure travel as borders have closed, and in many parts of the world entertainment venues, themese parks, and in many cases beaches, as well as restaurants, cafes and bars have been closed. The world is in lockdown.
With gatherings at first being reduced to 500, then 100, 50, and now in the U.S. to ten, the demand for conferences, expos, exhibitions and conventions has evaporated overnight. Hotels and event venues cannot survive if despite an almost total loss of revenue, they have to to continue to pay rent and loan payments.
Similarly the owners of these establishments should not be expected to take on their tenants’ burdens because of government controls which have brought about a freeze to the world’s economies. Landlords too should be afforded moratoriums on loan payments, freeing them of interest costs and freezing principal repayments until the pandemic has passed.
Unless there is government action to protect business, the global economy will continue in freefall sending the world into a depression with mass unemployment .
No matter what, the world has changed, there will be no V recovery, the world economy has collapsed. It will take years to build back up to where it was prior to the coronavirus pandemic. But without urgent government action now, the time that it takes will be significantly prolonged.