Global economic output is expected to expand by four percent in 2021 but will still remain more than five percent below pre-pandemic trends.
Harry A Patrinos
Harry A Patrinos, an education economist and manager at the World Bank, discusses how the Covid-19 is most likely to hold up human capital development. He shared a World Bank Group Flagship report that highlights how the pandemic will lead to longer unemployment spells, higher rates of school dropouts, increased income disparities, reduced learning-adjusted years of education, and lower future earnings.
The pandemic has forced governments and firms to adapt to a changing economic landscape, where protecting the poor has become imperative, while at the same time having to build effective policies to allow labour, capital, and innovation for a greener and stronger post-Covid recovery.
The World Bank report also highlighted how investments have collapsed in many emerging and developing economies in 2020 due to the virus crisis but will eventually resume in 2021. However, despite digital technology advancements, the increase will not be enough to compensate for the large 2020 decline, experts added.
Economists believe that mounting climate and environmental challenges will also affect policy changes by governments in 2021. Consequently, countries will embark on a greener, smarter, and equitable recovery path by increasing investments in green projects, phasing out fossil fuel subsidies, and offering incentives for sustainable technologies that will, in turn, create more jobs, reduce carbon emissions, and help tackle climate change problems.
. #COVID19 to set back human capital
development | @WorldBank Global Economic Prospectshttps://t.co/Y74PN1Okn6
– Longer unemployment spells
– Higher rates of school dropout Increased income disparities
– Reduced learning-adjusted years of education
– Lower future earnings pic.twitter.com/iSzzOcTFq8
— Harry A. Patrinos (@hpatrinos) January 10, 2021
Simon Wren-Lewis, an economist, tweeted about thoughts around handling Covid-19 by governments being messed up. He shared an article on why the UK’s Covid crisis should be personal for many, highlighting the major errors the government has made and none inevitable.
For instance, around 16 million of the population in the UK, that is, a quarter of the nation, are people aged over 60 years. Consequently, they are one of the largest sections of the population to be affected by the pandemic, as they come with added co-morbidities. Therefore, whether the government handled or mishandled the pandemic situation should be certainly personal to them, the article noted.
The National Health Service (NHS) is currently at breaking point, with overwhelmed hospitals and tired frontline workers. The article notes that one of the biggest errors of the government was not to implement restrictions on time and to relax them when not required. As a result, even though people could be blamed for not following the rules, the government should have planned around how people actually behaved rather than how they should behave.
Right from allowing cases to rise since the start of the pandemic, to getting them back down, and implementing sound test and tracing systems, the central government left the local government health teams to tackle tracing while wasting huge amounts of money on other measures, the article detailed.
Your thinking on COVID seems very messed up. This post https://t.co/wvhhk7WV1U lists the major errors this government has made, and none of them were inevitable. Labour called some of them at the time, and I called most of them at the time.
— simon wren-lewis (@sjwrenlewis) January 10, 2021
Robin Brooks, chief economist at the Institute of International Finance (IIF), shared an infographic on employment-population ratios for prime-age. The infographic revealed that women were doing better than men during the Covid-19 recession in the US.
Data further found the prime-age employment for women in the US to be -4.1 percentage points below December 2019 compared to -4.2 percentage points for prime-age men (black). Additionally, employment for prime-age women doubled the pace of male employment during the fourth quarter of 2020.
Women are doing better in the COVID-19 recession than men. Prime-age employment for women in the US is -4.1 percentage points below Dec. 2019 vs -4.2 percentage points for prime-age men (black). In Q4 2020, employment for prime-age women rose at twice the pace of male employment. pic.twitter.com/tjI3nh9B38
— Robin Brooks (@RobinBrooksIIF) January 10, 2021