Research has shown that Covid-19 will not be completely eradicated and that it will continue to appear periodically or seasonally despite the decrease in the virus. Many international institutions such as Think Global Health have stated that completely protecting people will not be possible with the existing measures, as the goal is to save time against the virus, and that life will not be the same until a new vaccine and/or drug is found.
It is noted that the period and intensity of the exposure rates to the virus for each country during the pandemic has strengthened the aim of gaining an advantage in the trade wars. As the People’s Republic of China tries to combat the virus, other countries try to fill the gap in the production and retail sector dominated by the People’s Republic of China is a great example of this. Even though the virus seems to be under control in China and that daily life and production has started at a certain capacity; there may be flow of capital from China to other countries on the medium and long term and this situation may indicate an opportunity for competitive countries.
On the other hand, in the new world where many new measures such as social distancing, meeting barriers, halting factories and production, working from home are introduced into our daily lives; concepts that were yet to be fully implemented for many years such as digitalization, online sales, effective business management, alternative cash flow, strong supply chain and effective legislation/risk management have quickly been adapted by companies.
The states’ policies in the fight against the virus and its legislative effects on companies have demonstrated the importance of risk management, internal audit departments and external legal advisors. Knowing the importance of predicting new risks and determining their outcome during the legislative process while implementing potential measures rapidly within companies, we have decided to closely follow legislations that are still being drafted, to effectively inform our clients on such issues and to efficiently resolve your questions.
We should also be aware that we are not in this for the short term but for the long run and that we have long way ahead of us. Hence, countries with a declining number of cases which have accepted the fact that Covid-19 will not end soon, have started to prepare for the “New Normal”, which is the period when the effects of Covid-19 are decreasing but have not fully ended, in order to restart their economies.
It is noteworthy that the term New Normal was also used for the period of global recession between 2008-2012, which started after the 2007-2008 crisis.
Companies trying to compete with local and international companies need to adhere to the rules of the New Normal within the bounds of the new measures and limitations implemented within their own country.
As it was seen at the beginning of the outbreak and period of increase, it is observed that countries continue to act on an individual scale rather than collectively making decisions and measures even in the period where the outbreak has started to decline. This has led to increased competition in the world of finance and business as the pandemic is considered a kind of “chance” for companies and countries competing against those still fighting the pandemic.
During Covid-19, we witnessed that leading car manufacturers could continue production in some European and Middle Eastern countries that have not stopped production yet. It is expected that investors who realize this advantage, may attempt to reduce risk by shifting their investments to different countries in order not to fall behind in the competition, and that countries applying more flexible measures and restrictions are expected to become more attractive to investors in the future. We believe that Turkey will also become a strategic location for investors and manufacturers by implementing flexible measures without disrupting the manufacturing and supply sector.
On the other hand, the increase in the transition to sectors and areas that are not affected by the pandemic or even on the contrary with an increased market share can be seen as another outcome of the New Normal. Among these sectors, retail and e-commerce, hygiene, food, medicine and bio-technology, child-baby products, media, entertainment and internet technologies stand out. The fact that some companies that are not in these sectors have completed R&D on the production of masks and medical devices during the outbreak and have initiated production, while companies with limited online outlets have taken steps to address these areas clearly demonstrates how important these sectors are. It is anticipated that these sectors will continue to develop during the New Normal.
Evaluation of the sectors to be invested according to the legislation of the planned country and its measures taken during the Covid-19 period, examining the past actions of the country and as a result, obtaining the most suitable sector-country combination will be crucial on whether the investment will be successful or not.
Currently, we believe that quickly realizing digitalization and online sales processes that have not been completed, speeding automation in manufacturing, establishment of legislative monitoring and application systems, making/adapting contracts according to the new reality and conditions, determining the feasibility of new projects in terms of the current or potential legislation and following the legal periods introduced with a constantly changing legislation and working closely with lawyers on litigation and collection are a matter of importance.