Report

Reimagining the global economy: Building back better in a post-COVID-19 world

Tuesday, November 17, 2020

The COVID-19 global pandemic has produced a human and economic crisis unlike any in recent memory. The global economy is experiencing its deepest recession since World War II, disrupting economic activity, travel, supply chains, and more. Governments have responded with lockdown measures and stimulus plans, but the extent of these actions has been unequal across countries. Within countries, the most vulnerable populations have been disproportionately affected, both in regard to job loss and the spread of the virus.

The implications of the crisis going forward are vast. Notwithstanding the recent announcement of vaccines, much is unknown about how the pandemic will spread in the short term and beyond, as well as what will be its lasting effects. What is clear, however, is that the time is ripe for change and policy reform. The hope is that decisionmakers can rise to the challenge in the medium term to tackle the COVID-19 virus and related challenges that the pandemic has exacerbated—be it the climate crisis, rising inequality, job insecurity, or international cooperation.

In this collection of 12 essays, leading scholars affiliated with the Global Economy and Development program at Brookings present new ideas that are forward-looking, policy-focused, and that will guide policies and shape debates in a post-COVID-19 world.

Some have questioned whether the pandemic has put attaining the already ambitious 17 Sustainable Development Goals (SDGs) out of reach, and whether they should be scaled back and deprioritized. In this essay, Homi Kharas and John McArthur argue that the SDGs remain as relevant as ever and that the goals can in fact provide a handrail for recovery policy.

The pandemic has revealed the importance of good leadership at the local level. In this essay, Anthony F. Pipa and Max Bouchet explore the role that global cities can have in driving a sustainable recovery.

Given the global nature of the pandemic, there have been calls for greater international cooperation. In this essay, Kemal Derviş examines the state of multilateralism and presents lessons of caution as its future is reimagined.

Shared recognition of the climate agenda is central to global cooperation. In this essay, Amar Bhattacharya explores how international action can pursue a recovery that produces sustainable, inclusive, and resilient growth.

The pandemic has exposed the weaknesses in the international financial system and the need to improve the financial safety net for emerging and developing countries. In this essay, Brahima Coulibaly and Eswar Prasad make the case for an international monetary and financial system that is fit for purpose to help countries better withstand shocks like a global pandemic.

International trade has slowed, and existing trade challenges, including automation, new data flows, and the rise of protectionism, could accelerate post-COVID. In this essay, David Dollar discusses these challenges, the future of global supply chains, and the implications for international trade.

COVID-19 could further accelerate the fall in global productivity, which has been slowing since the global financial crisis. Evidence from other recent pandemics such as SARS and Ebola show their negative impact on investment growth and productivity. In this essay, Alistair Dieppe and Ayhan Kose argue that policy approaches to boost productivity must be country-specific and well-targeted.

Throughout the world, the health and economic costs of the pandemic have been felt harder by less well-off populations. On the jobs front, the pandemic is affecting labor markets differently across and within advanced and developing countries as low-wage, high-contact jobs are disproportionally affected. In this essay, Marcela Escobari and Eduardo Levy Yeyati explore the future of work and policies for formalizing and broadening labor protections to bolster resiliency.

Technology, globalization, and weakening redistribution policies are leading to rising inequality in many countries. To tackle inequality, Zia Qureshi discusses policies to better harness technology for fostering inclusive economic growth.

Evidence suggests that the poor have been suffering higher emotional costs during the pandemic. In this essay, Carol Graham offers a look into well-being measurement and strategies to combat the effects of the lockdowns.

From strict lockdowns to ensuring sufficient supplies of personal protective equipment to sending students home from school, governments around the world have enacted varying measures to respond to the virus. In this essay, Alaka M. Basu, Kaushik Basu, and Jose Maria U. Tapia examine how governments in emerging markets have managed the crisis so far, as they design governance strategies that both reduce the spread of infection and avoid prohibiting economic activity.

COVID-19 disrupted education systems everywhere and has accelerated education inequality as seen through what service governments could provide: At one point during the pandemic, 1 in 4 low-income countries was able to provide remote education, while 9 in 10 high-income countries were able to. In this essay, Emiliana Vegas and Rebecca Winthrop present an aspirational vision for transforming education systems to better serve all children.