It is hard to think now of a Covid-19 recovery, but it will surely come, and when it does the world will be a very different place. This article speculates on what a post-Covid global economic order could look like. For the moment that is difficult to think of with countries facing mountains of debt, rampant unemployment and grim growth prospects. According to the Economist, with the possible exception of China, GDP growth projections for the U.S, Euro area, Britain and Japan are all likely to be significantly negative for 2020. https://www.economist.com/finance-and-economics/2020/04/04/economists-forecasts-for-gdp-growth-in-2020-vary-widely.
Contrary to a view that the pandemic will mark the end of globalisation, our perception is that there will be globalisation with a “different face”. The world is too enmeshed for it to simply and totally unravel. While the physical trade of goods may be curtailed due to transport restrictions, and people mobility constrained, there would be nothing to suggest that the global transmission of ideas and knowhow will abate. On the contrary, now is the time for countries, businesses and individuals to stage fast track massive open source projects, driven by online technology, which bring together the global “melting pot” of ideas from far and wide, to both address current and any future global scale problems. Could we be seeing the emergence of “collaborative globalisation”, one which is founded far less on cut throat competition but more on joint discovery and diffusion of know how? Of course, the road is not necessarily easy, since this would have major implications for the way firms do business, the way stock markets value assets, intellectual property regimes, and Government’s willingness to embrace openness.
Similar, one can envisage co-operation between Governments around the world, the likes of which has never been seen, to co-ordinate policies, not just the usual macroeconomic and trade policies, but even going far as possible perhaps to have social welfare policies that transcend national boundaries? One should not forget the disproportionate impact that the virus will have on nations, especially those with limited means and capabilities. In addition, more financial and other support for global institutions such as the World Health Organisation, and World Trade Organisation could be called for. Indeed, there are concerns that continued trade restrictions in essential items is having, and likely to have deleterious impacts (https://qrius.com/why-the-g-20-needs-to-step-up-now).This is not the time to further retreat into isolationist enclaves. On the other hand there is evidence of nations putting aside their sharp and long standing differences, for example China supplying ventilators to the US as a donation. These co-operative efforts could become more the norm.
In fact, extended even further perhaps, is the possibility of framing a new institutional order, including for example, a global emergency body to rapidly co-ordinate joint action, share resources and knowledge, and put in place protocols for decisive action. Such a body would not usurp national actions, but provide a basis for stronger, more institutionalised forms of global co-ordination. Indeed, perhaps it could be extended to other areas such as global action on climate change?
While globalisation may take on a difference appearance and mindset, it is also likely that countries will focus on local industrial development, including for essential food, medical equipment, and off grid energy, especially renewable energy, in the context of broken global supply chains. Within this framing, there will be a premium on innovation and creativity, and potential for replication in many countries. Innovations in re-purposed products and new business models will be paramount. We are already seeing many examples of this. In Australia, beer dispensing is being transformed into hand sanitiser production, while vacuum cleaning manufacturing is being turned into respiratory machine production. Flexibility more than ever is key. These sorts of initiatives are important not only to meeting changing demand but to keep people in jobs as far as possible. While one can understand that wage subsidies and bailouts are an immediate short term response, thinking ahead, loans, grants and the like for innovative, re-purposed industrial development and providing skills and training support to enable the workforce to move from declining to growing activities, may be of more benefit.
Beyond these considerations, is the wave of new online support groups, creative, artistic and exercise events conducted via social media around the globe, massive on line learning and telehealth that has taken hold in the public consciousness. As the Economist indicates, daily views of You Tube videos have increased by 600% in a short period of time, with usage of meditation apps rising 19 times, and also huge numbers of participants in fitness and cooking sessions via social media. https://www.economist.com/international/2020/04/04/with-millions-stuck-at-home-the-online-wellness-industry-is-booming.
Consistent with our notion of a re-framed globalisation is that these things transcend national physical boundaries, and can give rise to widespread global “grass roots” communities of practice involving shared learning, new ways of thinking and tackling problems. Similarly, local Government institutions could make further attempts at learning how to tackle community problems of social isolation, distancing and economic renewal from counterparts at home and abroad. Such features could well endure beyond the immediate crisis.
Dr. Anand Kulkarni
The author’s book India and The Knowledge Economy: Performance, Perils and Prospects was published by Springer in September 2019.
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