Hello Quartz readers,
Last week we talked about how Covid-19 is decimating US retail. The shopping gods heard our prayers: On Tuesday, the US Department of Commerce reported that retail and food service sales jumped to $486 billion in May, a 17.7% increase over April and roughly twice what analysts predicted.
It’s an encouraging sign, but there’s good reason to be cautious. Remember, retail sales had nowhere to go except up after March and April, when stores shuttered in large numbers to halt the spread of Covid-19. Sales remain far from pre-pandemic levels, and there’s still a lot of uncertainty about how the months ahead will play out.
Speaking of the future of shopping, many of you sent in thoughtful and, uh, interesting ideas for how the US might utilize its empty mall space. Here’s some of what we heard:
- Retirement community meeting places
- Food emporiums
- Video gaming hubs
- Healthcare complexes
- Indoor pickleball courts
- Affordable housing
- Huge free adventure playgrounds for children
- “Large yet sterile brothels.” 🤔
Reader Alison also wrote in with some global perspective: “Around the world, malls function very differently: as a place to centralize services. If you went to Tokyo, you’d find a six-story building of nothing but electronics (anything and everything you need). US malls have to think about centralizing services for the community. What would serve the aging boomers or the millennials who are building families?”
Facing the debt-trap music
The coronavirus is hardly done attacking global prosperity.
Most advanced economies are now struggling to reopen businesses and public spaces, but health experts are watching poorer nations with bated breath. While testing indicates that many low-income countries have yet to experience the worst, outbreaks in Latin America suggest the hopes that climate or demographics will spare them are in vain.
And for poor countries, it’s not simply the cost of fighting the virus. They’ll also fight spillover effects from the US, China, and Europe. Many emerging markets depend on tourism, a sector likely to be in recession for years; commodity and manufacturing exports, which fall as demand slackens in wealthier countries and oil prices sink; and access to remittances and capital from abroad, which have all but dried up.
At the outset of the crisis, according to IMF director Kristalina Georgieva, private investors pulled nearly $100 billion from emerging markets, more than three times as much as the reduction after the 2008 financial crisis. David Malpass, head of the World Bank, said this month that some 60 million people could be pushed into poverty. And all this comes after a period when many low-income countries borrowed extensively, with an increase in debt equal to 11% of their GDP on average, leaving them more vulnerable to external shocks.
Alleviating near-term suffering and mitigating long-term damage will require governments to spend more on social services while recouping fewer tax revenues than expected—the ugly dilemma that defines a recession. Often dependent on borrowing in foreign currency, emerging markets don’t have the ability of wealthier countries to rely on their own central banks to backstop this spending.
That’s why policymakers like Georgieva and Malpass have been focused on encouraging lenders to give these countries a break, while also providing billions in grants and concessional loans. The group of the 20 largest economies (G20) halted debt service payments on government loans as of May 1.
One thing is definitely clear: China is the most important lender to the low-income world. A 2019 paper co-authored by Carmen Reinhart, now the chief economist at the World Bank, estimated the country’s outstanding lending at nearly $400 billion in 2017. And while China reluctantly signed on to the G20 plan, policymakers in the US and Europe are skeptical that it will offer enough debt relief in practice.
Conscientious uncoupling
☝️ That essay comes from our field guide for Quartz members on the post-coronavirus recalibration of relationships with China. Here’s what else our reporters in the US, UK, India, and Hong Kong uncovered:
- It’s taken a pandemic for many countries to wake up to just how powerful China really is—and how much its decisions can shape their peoples’ lives.
- The European Union has a unique opportunity to rebalance its China relationship—if only it could get on the same page.
- Some are questioning whether China’s bets in Africa will ever pay off, particularly given the economic impact of the pandemic.
- As global companies look for ways to be less reliant on China, India is waiting eagerly in the wings.
Want to recalibrate your relationship with Quartz? Become a member and enjoy unlimited access to our stories, presentations, field guides, and workshops. We’ll even take 40% off your first year.
Buy, buy, baby
Amid stay-at-home orders, some new consumer behaviors are emerging. We’ve identified three Covid-19 quarantine archetypes. See if you recognize yourself in any of them.
👩🌾 The hipsteader (DIYus hippus domesticus)
What they’re doing in captivity: Sewing, knitting, crocheting, constructing, planting, cooking, composting, fermenting, canning, and baking “essentials.”
Identifying markers: Sourdough starter or dirt under their fingernails; pocketed aprons to contain spades, kitchen shears, cell phones (for documentation), and one-hitters; strawberry-printed Crocs.
What companies and sectors they’re feeding: Miracle-Gro and gardening suppliers, King Arthur’s Flour and baking suppliers, Crocs
📺 The screenhead (zombus remotus)
What they’re doing in captivity: Everything they did in pre-pandemic life—shopping, socializing, exercising, eating, and entertainment—with the aid of a television, laptop, tablet, and phone. Juvenile Screenheads can also be spotted in captivity, likely on TikTok or Animal Crossing.
Identifying markers: A pile of Amazon packages outside the front door; “text neck;” a human-shaped imprint in the couch.
What companies and sectors they’re feeding: Netflix and other streaming services; Zoom and other online chat platforms; Amazon and other e-commerce and delivery giants
🎓 The overachiever (proactivus nervosis)
What they’re doing in captivity: Improving! Performing multi-step facials, highlighting their hair, building squirrel-proof bird-feeders, getting six-pack abs, teaching their kids to code.
Identifying markers: Glowing skin, discernible muscle tone, non-visible roots, a new skill, and a house without visible dirty laundry or dishes.
What companies they’re feeding: Direct-to-consumer and natural skincare companies; Khan Academy, MasterClass, and online learning; Peloton and other home workout providers.
Which corona consumer are you?
👩🌾 The hipsteader
📺 The screenhead
🎓 The overachiever
Keeping the faith
As India enters a phased lifting of lockdown, the country’s places of worship are open for the first time since March. But not everything is back to normal:
- At gurudwaras, places of assembly and worship for Sikhs, the kadha prashad (a sweet pudding blessed by the guru) is now distributed with ladles instead of by hand.
- At the Jhandewalan Mandir temple in Delhi, Hindu devotees are going without the vermillion dot that is usually placed on their foreheads by priests.
- At the Jama Masjid mosque in Delhi, yellow stickers in the prayer area indicate ideal social distancing.
Essential reading
- The latest 🌏 figures: 8,410,682 confirmed cases; 4,115,294 classified as “recovered.”
- Safe as houses: Work-from-home policies may change India’s residential realty market.
- The sequel: A Covid-19 recurrence is forcing Beijing into “soft lockdown.”
- High energy: Greenhouse emissions are making a comeback.
- Coolcoolcool: Disposable urinals are summer’s new “it” item.
Our best wishes for a healthy day. Get in touch with us at reply@qz.com, and live your best Quartz life by downloading our app and becoming a member. Today’s newsletter was brought to you by Marc Bain, Tim Fernholz, Jenni Avins, Manavi Kapur, and Kira Bindrim.