COVID-19 is a Story of Opportunity
The world is going through a traumatic crisis in terms of amplitude and depth. The World Bank referred to the current situation as the worst since the 1929 Great Depression. The world economy will contract by 4.9 % in 2020 according to the International Monetary Fund (IMF) and 5.2% according to the World Bank. While this would be the biggest drop in almost a century, focusing on GDP alone does not give the full picture. There are other dimensions, very human ones, to consider.
The UNDP Human Development Index measures human development along three critical indicators of a long and healthy life, being knowledgeable, and have a decent standard of living. The Index for 2020 suggests a decrease of 2.5% in average annual growth, which is considerable given that it has been on the rise since 1990 and saw an increase of +0.6 to +0.7% annually. The worrying thing is we have likely not hit rock bottom; COVID-19 infection curves have not flattened, and several countries already face a second wave of new infections.
In short, we face a socio-economic hardship of great scale and magnitude that has never been seen before.
Following an article written by Kristalina Georgieva, Managing Director of the IMF, I believe there are good reasons to be hopeful and remain hopeful. Why? The IMF Managing Director rightly sees that a crisis has the potential to bring the best out in people, which we already see happening with health staff and other essential workers putting the lives of others ahead of their own. Equally promising is most governments have stepped up in an unprecedent manner and are acting by pushing through fiscal packages that are changing the socio-economic fabric of their countries while also still investing in United Nations recovery and response fund, and the global humanitarian response plan. The below is building and elaborating further on that article and will argue that there is no reason to reinvent the wheel. We have the answers and as the IMF Management Director states, in building back better it is important to realize that countries with stronger macroeconomic fundamentals, better social cohesion, and more robust safety nets are likely to experience faster and stronger recoveries. Existing vulnerabilities, corruption, lack of social protection measures, and lack of progress towards the sustainable development goals (SDGs) will exacerbate the situation in already challenging contexts. This is why the proposals below are not new — they should have rolled out decades ago. The path to development should have always been people-centered, green and digital.
Now, more than ever, global cooperation will be vital whether that is to facilitate collective actions, share data and information, protect supply chains, and support the most vulnerable countries.
PEOPLE-CENTERED. While governments have acted fast to provide stimulus, researchers from the IMF suggest that in the absence of deliberate and strenuous attempts to protect the most vulnerable segments of society, this pandemic could end up exerting a significant adverse impact on inequality. In fact, the increase in economic inequality might be larger compared with previous pandemic episodes. ILO already calculated that before the crisis, 100 million people fell into poverty annually as a result of catastrophic health expenses. COVID-19 adds to these risks making the future even more worrisome.
Governments now have an opportunity to invest in people and build more even societies and economies. This means spending more on schools, education, training, and reskilling services, and expanding social programs that reach the most vulnerable. It means empowering women in all sectors of the economy.
The UN has been at the forefront to push many of the ideas that are surfacing again. In September 2019, the United Nations General Assembly held a high-level meeting on universal health coverage that aimed to build a “healthier world” by accelerating progress toward universal health coverage. Proponents argued this could be done through financial risk protection, augmenting access to quality essential health-care services, and providing safe, effective, quality and affordable essential medicine and vaccines to all. If these measures would have been in place before COVID-19 struck, the most vulnerable would have been hit less hard and we would not be behind on underserving one third of the world’s population or meeting SDG health-related targets. The declaration that came out of the meeting stated that Member States should, “Accelerate efforts towards the achievement of universal health coverage by 2030 to ensure healthy lives and promote well-being for all throughout the life course.” This was pre-COVID-19. We live in a world where the time to make this promise is now.
Focusing on education, the Secretary-General’s Policy Brief on Education during COVID-19 and beyond recommends a few key areas to focus on, including prioritizing education in financing decisions. Before the crisis hit, low and middle-income countries already faced an education funding gap of $1.5 trillion dollars a year. This gap has now grown. Education budgets need to be protected and increased. It is also the right time to look at the future of education. We have a generational opportunity to reimagine education. Investments in digital literacy and infrastructure, an evolution towards learning how to learn, a rejuvenation of life-long learning and strengthened links between formal and non-formal education is crucial now.
UNDP proposed a temporary basic income. A basic income, as a concept, is not impossible to implement. Evidence so far in countries where it was tested suggests that getting a basic income tends to boost happiness, health, school attendance, and trust in social institutions, while reducing crime. Many governments have de facto implemented the principle during the present hardship. While the cost seems high at first it is a drop in the ocean compared to expenses in sectors like fuel subsidies, defense, and agriculture. The savings realized through a basic would replace other ad hoc and bureaucratic welfare programs, which makes it an important program to consider when jobs are being replaced by automation and artificial intelligence.
Putting people front and center is also a story of prevention. By prevention, the Secretary General means: doing everything we can to help countries to avert the outbreak of crises that take a high toll on humanity, undermining institutions and capacities to achieve peace and development. Yet we have seen the opposite with mass popular protests multiplied across the world over the last decade, with increasing intensity in 2019. They have occurred in developed and developing countries in democratic systems and under authoritarian regimes alike. While each context is different, common underlying drivers of protests include inequalities, socio-economic issues, corruption concerns, limited access to social services and a shrinking of civic space. In many instances, they reflect an underlying erosion of trust and legitimacy in Government and a failing social contract between people and their governments. A Pew Research study, published in August 2020 with results or survey from the spring of 2019 showed then that people around the world already felt cynical about income inequality, governance, and job opportunities. In the 34 countries surveyed, 65% of adults responded they were “generally pessimistic” about government reducing the gap between the rich and poor in their countries. Many also doubted in their political systems (54%) and the availability of well-paying jobs (53%). It is crucial we turn the narrative around by investing in education, investing in jobs, social protection, and building trust between institutions and the people.
GREEN RECOVERY. 2020 was supposed to be a decisive year for climate action as countries were expected to put forward new, ambitious climate plans in accordance with the Paris Agreement on climate change, putting the world’s 7.5 billion on a trajectory towards a greener future. But while it is understandable that governments had to shift their focus to address COVID-19, the effects of climate change — including threats posed to human health and economies — have not gone away. Climate-focused investments are stagnating and a greener future for our children and theirs is slipping through our fingers.
In 2018, the International Labour Organization (ILO) in its world employment and social outlook report calculated that a shift to a greener economy would create 24 million new jobs globally by 2030 if the right policies are put into place. These new jobs would result from adopting sustainable practices in the energy sector, like using electric vehicles and increasing energy efficiency in buildings. Because it is likely, thanks to COVID-19, these figures higher today focusing on green recovery will not only benefit the climate, but will help economies rebound, provide jobs, and weave better social safety nets.
The right policies help allocate resources to investments that support public goods for everyone like clean air and water, disaster risk measures, resilient infrastructure, and renewable energy.
DIGITAL. As the virus spread around the world people around the world were forced to work remotely and use technology to remain productive. We traveled less, piloted different ways of working, and are currently considering the ways schools, business and institutions may have to reform. Everything is likely to look differently in the aftermath.
Some private companies do not expect their staff to return to the office at all. Alternative working arrangements are becoming the norm in many sectors. While this might not be possible for all types of work, the current health crisis highlights why investments in robust digital infrastructure and policy frameworks are required. At the forefront, the United Nations recently launched a digital cooperation roadmap to help guide global leaders and change makers in shifting from analog to digital and circumventing challenges such as digital divides, cyber threats, and online human rights violations. The digital cooperation roadmap lays out a roadmap where all stakeholders play a role in advancing a safer, more equitable digital world.
Technology is one of the tools we can use to right inequalities and build a brighter and more prosperous future for people from all backgrounds.
IN CONCLUSION. None of this is new, innovative or groundbreaking. These are the sort of steps that should have been taken long ago. However, implementation did not happen due to a lack of political will or perceived lack of resources, and the chickens are coming home to roost. We are now paying the price at a much higher rate that will jeopardize the lives of future generations.
The thing is, these issues are interconnected and need to be implemented as a package. We can not have a green recovery without a different tax system that considers the social and environmental costs of the products we make and persuade others to buy. The blight of collecting taxes could be simplified through the use of digital technologies that makes corruption more easily traceable. Lessening inequality could be achieved through government investments in green economy policies. The list is long. Do we have all the answers? Not by a long shot, not yet. But now is not the time for cautious overthinking or risk avoidance.
Now is the time to act by jumping into the future, eyes wide open, prepared to adjust, adapt, and course-correct along the way.
