Covid-19 has marked the history of the 21st century. Much uncertainty remains about how and when the pandemic will run its course, but the unprecedented economic shock generated by the global health emergence has already sharply exposed the global pre-exiting economy weaknesses, severely setting back development progress around the world.
Covid-19 has spurred on a number of already visible trends, magnifying some obstacles to development, but has also opened up new opportunities for trade and development. In essence, Covid-19 may be a game-changer for several persistent and emerging trade and development challenges to a new global order. To be better equipped and to deal with the crisis and build a more resilient, inclusive and sustainable future, responsive policy actions should be continuously revised, formulated, adopted and implemented to support ongoing responses to Covid-19 and eventual recovery from the pandemic.
The Covid-19 pandemic has strongly affected both national and international institutions. Thus, the following reflections cover both aspects. There are elementary questions surrounding this deadly virus: Why we did not anticipate its arrival? Why we acted late? Why our response was ineffective? Why we remained disoriented at the time of its inception; when and how this pandemic will end? Giving a closer personal look and observant reflection on the immediate impacts on public health, and how the crisis has affected employment, and ultimately individual livelihoods.
The disruption caused by Covid-19 has had real and disproportionate consequences on vulnerable and disadvantaged low-income households, migrants, workers in the informal sector and, often women, especially at national level, whereby companies have been liquidated, many of these populations are not protected by social safety nets and yet are particularly affected by soaring unemployment. The impact of the pandemic on these groups is examined with an eye to strengthening their resilience, through productive capacities, broader social protection and gender-sensitive policy responses. The impact of Covid-19 on two sectors that have been particularly and seriously affected and employ many vulnerable groups, tourism and micro-enterprises and small and medium-sized enterprises are facing a longer-term decline in development.
Most countries in Africa depend heavily on extractive industries as sources of growth. While commodities can trigger growth, the sustainability of such growth cannot be guaranteed because of the instability of commodity prices and climate change. Furthermore, the extractive industries have a low potential for employment creation as they are capital intensive and have limited linkages with the rest of the economy. In this context, there is a need to broaden the sources of growth in Africa through the building of productive capacities, particularly in manufacturing, information, communication and technology. This will require fostering capital accumulation and ensuring that investment is directed to strategic sectors, such as manufacturing, with high-income elasticity of demand and in which the opportunities for export market expansion and employment generation are numerous. It also requires fostering technology and innovation, which is critical to enhancing productivity and inducing structural change in an economy. Increasing investment in human capital is also needed to enhance productive capacities and mitigate the impact of shocks. However, it is not only the quantity of human capital that is important, but the quality of human capital also matters. In this setting, there is a need for policies in developing countries to improve the quality of education and also ensure that the educational curriculum reflects the needs stated in relevant national development plans, to maximise the development impact of human capital investments.
What will change? It is difficult to imagine that the traumatic experiences of the pandemic will be forgotten quickly or disappear entirely over time. The human losses alone will remain strong reminders of the implications of change at the level of society and individuals. Our governance systems, in many ways our democracies, will continue to be at the heart of this journey.
Crisis management at national level policymakers: the coronavirus pandemic is wreaking havoc globally, leaving governments and communities struggling to find responses. This is happening even as new technological and industrial transformations are altering societies around the world, breeding industrial avenues to be explored.
The pandemic that has brought the world to a standstill will be remembered as the virus that has let many into a self-retrospection moment and changed the way we live. We are living through a period that can only be described as having forged the greatest act of solidarity in history, as people give up civic freedoms to save lives. While we all agree that managing the health crisis is the overwhelming priority, the social and economic consequences are, and will be, dramatic in an already troubled world.
Major shortcomings in business responsibilities towards workers have been brutally exposed, non-essential supply chains have collapsed in a lot of countries and workers, including the massive numbers of informal workers who face destitution with no social protection.
While the tech industry benefits from skyrocketing demand, other industries are seeking bailouts due to a lack of resilience and enduring the least expected phenomenon. Just as the financial crisis revealed the need to require banks to hold liquidity reserves, the coronavirus crisis has shown the need for multinational enterprises to strengthen operating reserves, which in many cases are not enough to last for longer. This is an issue that requires the attention of both companies and regulators.
The impact of Covid-19 on lives and livelihoods has changed our entire way of living. All of these factors require us to push the reset button on our chronometer and to ensure a just transition to a better future as we embrace the dawn of the Fourth Industrial Revolution.
That transition needs to address all the convergent crises, be futuristic in nature and it can only be done with international cooperation and more united local frontiers than ever based on the real needs of people for health, economic security and respect of human rights.