The present nationwide and worldwide business and financial crisis has the same results as if it were caused by flood, earthquake, or disturbance in nature. It has deprived millions of persons in this nation of their employment and means of earning a living for themselves and their families; it has destroyed the value of and the income from all property on which thousands of people depended for a living; it actually has resulted in the loss of their homes by a number of our people and threatens to result in the loss of their homes by many other people in this state.
REVIVAL OF THE GLOBAL ECONOMIC EMERGENCIES :THE ROLE OF LAW
The relationship between Law and Economy is like that of a tree and roots. Economy is just like a tree with luxurious leaves and colourful flowers: what nourishes and sustains the leaves and the flowers is the roots (Laws and Policies). When the colors of the flowers wither, it is the roots will facilitate growth of another. In other words, Global Emergencies have the potentials of plunging world economy into recession, with the consequences of unemployment and deprivation. For Instance, economist warned that the recent outbreak of Covid-19, could cost the global economy an estimated $1.1 trillion in lost income.
Consequently, the negative effects of emergencies on the global economy show an undeniable need for appraising the role of law in reforming economies. For centuries, law has provided societies with necessary tools for the realization of economic policies. Law has provided mechanisms for intervention and point of direction in the economic process of countries. Against this background, the kernel of this write up is to analyse the negative effect of Global emergencies on the economy with a view to highlight the roles of Law and Policies in cushioning such negativity. But from the onset, it’s germane to embark on a journey to figure out what Global emergencies is all about.
2.0 The Concept of Global Emergency
The word emergency in this context is referred to a crisis that has the potential to grow beyond the coping capacity of the affected community, single organization or group of a community at risk. To declare an emergency is to set aside a normal state of affairs or to acknowledge that such a departure has already occurred. Emergency may be on two levels, State and Global. Hanrieder and Kreuder-Sonnen Contend that state of emergency is the legal order through which sovereign states respond to security crises. States of emergency constitute an exceptional type of government and follow a distinct logic. In this situation, given the unanticipated, exceptional nature of existential threats, law has to recede in order to facilitate decisions aimed at re-establishing political order.
On Global Emergency, Handrier and Kreuder-Sonnen, remarked that Security threats are increasingly seen as worldwide contingencies that do not respect national boundaries, particularly within the discourse of globalization. Environmental disasters, terrorist attacks, financial breakdowns or globalized pandemics are some of the prototypical crisis scenarios in which high-speed decision-making and rapid political interventions are seen to be needed.
Some issues seems to have surfaced From the above statement. Firstly, there are three kinds of emergencies which include Political, Economic and Natural Emergencies. Political emergencies are kind of emergencies that involve security threats such as War, Terrorists Attacks like September 11. Economic Emergencies are all emergencies that begin in financial crisis, like the Argentine fiscal crisis of 2001.
Finally, natural emergencies, as the name implies, are event that caused by natural events such as Tsunami, like Hurricane Katrina or diseases like the ongoing Coronavirus (Covid-19). Secondly emergencies have the potentials of setting aside normal state of affairs and constitute an exceptional kind of government. The reason for this suspension is that, during emergencies, the principal concern of governments is to preserve a nation whose survival is somehow imperiled. However, setting aside the normal state of affairs wretch a deep havoc on economy.
3.0 Negative Effects Global Emergency on Economy
The negative effects of emergencies on economy could be seen as it creates high level of unemployment, disruption in the process of production and all kind of economic activities. An American Judge Olsen, although trying to equate economic emergency with natural, has vividly painted the negative effects of emergencies on economy in the authority of Home Building and Loan Association v. Blasdell Where he insisted that
The above postulation explain that people do loss their Jobs, properties and means of earning a living as a result of emergencies. Governments also loss their incomes. For instance, as a result of the recent breakout of the Global Emergency, Covid-19, IMF warned that economies in Asia would see no growth this year, for the first time in 60 years. Furthermore, US April unemployment rate has risen to a record 14.7%, with more than 20 million jobs lost and EU GDP is forecast to contract by 7.5% during 2020. Thus the germane question here is, what is the role of Law and Policies in reviving such economy?
4.0 The Role of Law in Cushioning Negative Effects of Global Emergency on Economy Stability in economy is critical for the survival of any society. The role of law in this aspect is to seek all means to avert regression and decent into chaos through Disputes resolution, Rules, guidelines and measures and relevant Legal Frameworks that establish order and good atmosphere in the economy.
4.1 Law as a Mechanism for Dispute Resolution In order to contain any emergency, countries around the globe do adopt stringent measures such as curfews or lockdowns, with have negative implications on businesses, more especially small scales, and contractual relations. So this may result in high litigations as a result violation of agreements among others. Laws and Policies in regard utilizes canons in exploring the nature of contentions stemming from this, and resolve it in order to improve good economic atmosphere and development.
4.2 Law and Policies as a tool for Reviving Businesses and Contracts Although the right to economic freedom is a fundamental individual right, during emergencies, the government may infringe upon such rights. A policy may be issued to restrain institution from sacking workers as a result of lack of performance caused by emergency.
Furthermore, law and policies may be enacted/issued to impose a mandatory loan scheme on financial institutions to fund small scale businesses on a low or subsidized interest rate. Law may also suspend some contractual clauses. For instance, as a result of Emergency, the court in Hamdi v. Rumsfeld upheld the section of the Minnesota Mortgage Moratorium Law extending the period during which a mortgagor could redeem her property after foreclosure as against a Contract Clause.
4.3 Law as an Instrument for Economic Reforms Government may adopt legislations to achieve its goal of economic development. Law creates a room to facilitate structural reforms of the unhealthy financial industry and adopt best practices that may serve a long way in cushioning the negative effects and fill the vacuum exposed by emergency on the economy.
4.4 Law and Policies as instruments for Ensuring Healthy Economic Environment. The appropriate role of criminal law in the process of mitigating economic hardship caused by emergency, especially Public Health Emergency, is imposition of penalties. Infectious Diseases and Public health laws often contain penalties for failing to comply with public health orders made by authorities, or for engaging in behaviours that place public health at risk. This encourage the public and the market players to participate in the market for its being healthy and safe. Policies and laws may make it mandatory for the economic players to disclose their health status in order to avoid an unintended consequence for exposing another person to infectious such as Covid-19.
Legal sector has wide-ranging economic impacts, which can help long way in mitigating the negative effect of Emergencies on economy. Law plays a fundamental and important role in creating good atmosphere for economic activities. Laws and Policies are the key facilitator of economic development through the promotion of more sophisticated economic activity. Without these two instruments, the economic development is uneasy to be conducted, since the support and stability is hard to get.
ABOUT THE AUTHOR
Ahmad Abubakar Dubagari, is a writer and poet, Author, with strong interest in Capital Markets, Telecommunications, Banking, Property and Islamic Commercial Laws. He writes from Ahmadu Bello University Faculty of Law. He could be reached through his e-mail [email protected] or his phone 0814 651 5644.
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