Global leadership and cooperation critical for Covid recovery – leading macroeconomic influencers
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Global leadership and cooperation critical for Covid recovery – leading macroeconomic influencers

18 Jan 2021

Economists believe that policymakers will need to focus on pressing issues like the urgent action on climate change and debt restructuring.

Global leadership and cooperation critical for Covid recovery – leading macroeconomic influencers
Credit: Kat Ka, Shutterstock.com.

Economists believe that policymakers will need to focus on pressing issues like the urgent action on climate change and debt restructuring for many low-income countries that have been worst hit by the coronavirus pandemic.

David Wessel

David Wessel, a journalist and director of the Hutchins Centre on Fiscal and Monetary Policy at the Brookings Institution, re-tweeted on Brahima S Coulibaly’s (the vice president and director of the Global Economy and Development programme at Brookings Institute) views on 2020 being an exceptionally difficult year for the world to recover from due to the coronavirus pandemic.

According to Coulibaly, the two most anticipated and consequential events of the global economy and society will be the end or containment of the Covid-19 pandemic, as well as a change in the US administration. Remaining optimistic about coronavirus vaccine developments, he states that a large fraction of the world will be vaccinated by the mid of 2021, which will also pave the way for normalisation of activity.

He also confirms that the pandemic is disproportionately affecting the more vulnerable countries and segments of the society. As a result, global poverty and inequality will rise significantly. As policymakers, spending the next few years on rebuilding efforts and prioritising international cooperation will be important, he added.

Mohamed A. El-Erian

Mohamed A. El-Erian, the president of Queens’ College, Cambridge and chief economic adviser at Allianz, shared an article on Covid recovery most likely to involve significant dispersion rather than synchronised recovery in 2021. The article shared highlights that the economic repercussions of the pandemic, on top of the already existing weaknesses, will make it even more difficult for developing nations to bounce back quickly.

According to the World Bank, the number of people in extreme poverty has risen for the first time in two decades by approximately 90 million. However, despite the long-term effects of the pandemic and existing susceptibilities most of the emerging economies are expected to grow in 2021, with few expected to re-gain from what was lost in the previous year. Meanwhile, poverty and the World Bank projects will rise or remain flat.

Economists also state that emerging economies are younger and hence less susceptible to the Covid-19 disease. For instance, people aged above 70 years constitute only 2% of Ethiopia’s population and 6% of Peru’s compared to 17.5% in Italy, according to Penny Goldberg of Yale University and Tristan Reed of the World Bank. Likewise, 36% of US’s population suffered from other co-morbidities such as obesity, unlike just 2% of the Vietnamese people and 11% of Ghana’s population.

Branko Milanović

Branko Milanović, an economist, discussed how the US is inching towards 4% of the population being vaccinated six weeks after the beginning of the vaccination programme in the US. Research and data have confirmed that vaccines have been a major breakthrough in bringing down the death toll of infectious diseases in the past. For example, the plague that occurred during the 17th century, was the first pathogen to be defeated by humans in Europe. Experts believe that this was achieved through a combination of measures such as isolation, contact tracing, and cordons sanitaire.

Reports suggest that infectious diseases have been the cause of fewer than 1-in-6 deaths today owing to the development of science and vaccines. Consequently, the global average life expectancy is now 73 years after life expectancy doubled in every region across the world.