The Choices We Make will Shape Post Pandemic world

Context:  Pandemic is not the primary driving force behind the ongoing global economic crisis instead it has reinforced the  pre-existing trends of greater government action, retreat from hyper-globalism, and lower growth rates.

The global economy will be shaped in the years ahead by three trends. 

1. Rebalancing the relationship between markets and the State in favour of the latter. 
2. Rebalancing between hyper-globalization and national autonomy, also in favour of the latter. 
3. And ambitions for economic growth will need to be scaled down.

Pandemic Reinforced three Pre-existing trends

• Greater State Intervention and Renewed Primacy of Nation-States: Neoliberal market fundamentalist consensus is retreating as government plays a larger role is responding to inequality and economic insecurity.

• Retreat from hyper-Globalization:  de-globalization, decoupling, bringing supply chains home, reducing dependence on foreign supplies, and favouring domestic production is escalating  trade war and ethno-nationalism.

• Reduction in Economic Growth: Developing  countries with already  fragile economy are facing massive public-health burden of the pandemic and external shocks in form of sudden stop in capital flows and steep declines in remittances, tourism, and export receipts.

Other Pre-existing Pandemic Reinforced Growth Problems

• Universal health insurance

• Stronger labour-market protections

• Protection of domestic supply chains for critical medical equipment.

• Countries to prioritize resilience and dependability in production over cost savings and efficiency through global outsourcing. 

• Massive supply shock

• Reliance on unsustainable demand-side factors like public-investment and natural-resource booms, more sustainable long-term development option of export oriented industrialization.

Way Forward

• Economic globalization should be focused on areas where international cooperation truly pays off, including global public health, international environmental agreements, global tax havens.