A coronavirus dashboard could improve the economic balance between the Randstad and the rest of the Netherlands

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The Dutch government has announced that every region should follow its own route towards relaxing the restrictions. This is a logical decision. Infection rates, hospital capacities and numerous other influencing factors show considerable differences across the country. Why then should the stricter rules that the Randstad conurbation and the provinces of Noord-Brabant and Limburg demand be imposed on Groningen and Twente, where the data are considerably less serious?

It goes both ways: we will also earn from a cautious unlocking Sandra Phlippen Chief Economist ABN AMRO

Prime Minister Mark Rutte has said several times that “all of us together have earned” a cautious unlocking. What he has not mentioned, however, is that it goes both ways: we will also earn from a cautious unlocking – literally, in this case. From an economic perspective, this could create some interesting regional dynamics.

Worldwide, the general pattern is that large cities – places with an economic buzz, where house prices are high and people are packed closely together – have been hit by relatively high infection rates. Those infections lead to lockdowns, and so halt the economy and cause further harm. In the US, for example, the infection hotspots are along the East and West Coasts, which generate around 25 percent of the country’s GDP.

Using a dashboard in the Netherlands (and perhaps in other countries too) to tighten or ease restrictions as the local situation demands could create a closer alignment between the Randstad conurbation and peripheral regions. That’s good news for the economies of the northern and eastern parts of the country, and perhaps also for the province of Zeeland and parts of Limburg in the south, where shops, hotels, bars and restaurants and smaller events might be able to start up again.

Quite possibly, that development could persuade people who lose their jobs in the Randstad to relocate to those regions. An increase in the availability of labour will boost productivity, purchasing power and house prices. It might become a profitable investment for businesses to help finance hospital capacities, which is one of the ‘meters’ on Health Minister Hugo de Jonge’s decision-making dashboard.

Again and again, research into inequality shows that where in a country you were born is a major factor in your economic opportunities in life. Those opportunities are limited if you grow up in the periphery (particularly in countries such as the US). The fact that the same periphery could now develop a comparative advantage relative to large prosperous cities is an opportunity we need to seize.

Every week, Sandra writes a newspaper column for daily newspaper AD (in Dutch only), which can also be read here.

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