Budgeting for 2021: Is it an act of faith?

By Luis García

Los Andes/Grupo Clarín

Mendoza, Argentina

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Each of us is unique, with a personality and different perspective of the future shaped by our own reality. Nonetheless, regardless of age, nationality, race, and wealth, over the last few months of the pandemic, we have all experienced one common feeling: Fear of what the future holds.

The way we have perceived the world no longer exists. Have you ever considered that seeing someone without a face mask would make you feel disapproval?

Depending on our level of resilience, adapting to this new reality has been more or less difficult, but in no way has it left us indifferent.

Without knowing what will happen in 2021, planning for next year may feel daunting. Image courtesy of August de Richelieu from Pexels.
Without knowing what will happen in 2021, planning for next year may feel daunting. Image courtesy of August de Richelieu from Pexels.

Obviously, the impact has been different depending on the means we have available during confinement. While the wealthy have been able to make a private plan to escape to their private retreats, less fortunate people have been forced to share small spaces with their relatives and lose any sense of privacy.

All of us have had to fight the same battle: the virus. Even though we have all changed the way we live to protect ourselves, nobody has the formula to win this war: the vaccine.

Old reality

Prior to the pandemic, life was defined based on the projects we undertook: family, study, travel, and work. None of those projects now has a horizon. We can dream about them, but we don’t know when we can execute them. They are on a forced “hold” status.

In the meantime, the game is “adapt and change to survive.” Some people have explored new market niches and opened e-commerce distribution channels to remain relevant. However, these actions have been reactive and not proactive, forced and not planned.

Since the beginning of time, evolution has been the ruling force: Only the fittest survive. Since the last world war, we have seen decades of orderly progress without large disruptions. Achieving social prosperity and growth of the middle class was the common objective over the last 80 years.

Current reality

Now, it seems like we are facing a new world war with an inviable enemy: the virus. Like in a horror movie, we know something bad is happening, but we don’t know its origin or when or how it is going to end.

In the world wars, we had armies led by leaders that would guide millions of soldiers who would give their lives for a common goal: liberty. Allies vs. Axis. Today, each human being is a soldier. We don’t know who our enemy is. Is it the virus? Our weapon is the healthcare. Do we have the right weapons? And who are our leaders?

My father used to say “blood, toil, tears, and sweat” are going to be needed to achieve a goal in life. He was paraphrasing Winston Churchill, who led the British nation to victory. Today, as we can see in the many involuntary errors made by presidents from the most powerful nations, the figure of the true leader has vanished. Nations need clarity, honesty, and coherence in times of obscurity and confusion. Today’s leaders do not live up to the challenge.

If world leaders have exposed themselves as weak, management of large corporations have followed a similar path. Even those whose businesses have benefited from the pandemic don’t seem to have clear horizon.

We see large corporations trying to bring their employees back to their offices and then, days later, having to undo everything. Downtown areas are empty in the United States, Europe, and Asia, resulting in immense losses to both companies and cities.

Nature is ruling over man.

New reality — and the 2021 forecast

Almost a year has passed since the beginning of the pandemic, and no vaccine is in place. The year is ending, and it is time for companies to complete their annual plan for 2021. Each business endeavor, no matter how small or big, has to provide its best forecast of what comes next. Without clear indicators, how do we predict the future?

Every year around the fourth quarter, companies consult economic analysts, industry experts, and gurus to get a sense of what is coming. With that knowledge, they forecast revenues and expenses and estimate growth.

In the pre-Industrial Revolution times, planning for the future was an act of faith. People hoped God would protect them from famine, pests, war, or all of the above. With the Industrial Revolution, science took centre stage. Enlightenment ruled over superstition. The level of uncertainty about the future was reduced, and planning became more feasible. Reason triumphed over faith.

But, out of nowhere, COVID-19 hit us, and the future seems as unforeseeable as it was in the pre-modern times. The question is: Will the 2021 budgeting process be an act of faith?

Header photo courtesy of Roman Koval from Pexels.

About Luis García

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