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  HOME | Opinion (Click here for more)

Beatrice Rangel: The Economic Value of Truth
Venezuela Minister of Ministers Beatrice Rangel identifies how in a post-truth world, truth is even more important and the Chinese experience with coronavirus will show us just how costly not embracing the truth is.

By Beatrice E. Rangel

In these times of liquid realities when no events hold public opinion concerns for more than half an hour, truth is beginning to become not only a scarce commodity but a precious competitive advantage.

Lady Diana conquered the hearts of Britons forever when she candidly revealed the excruciating pains endured by participating in a marriage where her spouse was taken by another woman. Her son Prince Harry has just won the world affection and support by deciding to part with family tradition and initiate a brand-new life with his wife Meghan Markle and son Archie.

And the markets reacted wildly with employment and partnership offers that will keep him busy the remaining of the year in assessing all.

China, on the contrary, is about to foot a very large bill for standing on top of the truth in the face of the coronavirus outbreak. According to Bloomberg, the net impact of the catastrophic health pandemic could reach 10% of GDP.

The Prince Harry story and the Corona virus outbreak both illustrate the economic value of truth.

This is particularly significant in an age where, according to Mac MacManus, we live in the Post-Truth Era.

In these times citizen trust in political institutions is the lowest in centuries. Everybody signals media outlets as biased sources of information. Fake news has become an adjective. Politifact signals the presence of half truths or outright lies in 83% of public speeches by the President of the United States.

But we shall never know what the costs of these departures from the truth are until we measure their economic impact.

To my mind positive market reactions to loosely pinned economic statements by the President of the United States could produce short lived market rallies that would retrench fast upon discovery that there is no substance to the statements.

A good approximation to the value pf truth would then be to measure the difference between the market gains and the retrenchment.

Neither we shall ever know how many advertisers abandoned TV news networks on the grounds of their partiality. It thus is very difficult to ascertain the value of truth on these instances just as it is difficult to measure the impact of the Washington D.C. protracted political stalemate upon US competitiveness and security.

But where the value of truth will be crystal clear is on the impact of the coronavirus not only upon China but upon the world.

Starting with China, the cost of covering up the outbreak will hit its growth rate by at the very least one percentage point or 10% of GDP.

Next it will impact 20% of the value chain in the West and 40% of the value chain in Asia.

Mongolia, Cambodia and Laos Myanmar, the Philippines, and Viet Nam come next in terms of value losses.

These nations export more than on sixth of their GDP to China. As China reduces economic activity due to the virus impact imports will tend to shrink and so will the GDP of these nations.

In Africa, Angola, Congo, Sierra Leone, Lesotho, and Zambia are highly exposed too, given that they export between 25%-40% of their GDP to China.

One can measure the impact upon global economic sentiment through the prices of energy and minerals. Oil prices have so far lost 20% of value and copper 7% since the outbreak. Other losses include delays in monetary unification in China and perhaps even a leadership reshuffle.

Should Xi Jinping be lose his governance, he will also learn the economic value of truth.

Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.

For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.


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