‘Building back better’ – here’s how we can navigate the risks we face after COVID-19

covid stay home

(Sharon McCutcheon, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Johnny Wood, Senior Writer, Formative Content

  • A new World Economic Forum report looks at the risks, challenges and opportunities the world is facing as a result of the COVID-19 pandemic.
  • A prolonged global recession tops the list of most feared risks, replacing long-term risks like climate change as key business threats.
  • Sustainability should be a key component of economic recovery.

As a perfect storm of health and economic crises leaves the world navigating uncertain times, a new report casts light on what lies ahead.

The World Economic Forum’s COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications looks at what the coronavirus pandemic means for the world based on the views and analysis of 350 senior risk professionals.

Here, Saadia Zahidi, Managing Director of the World Economic Forum and Head of Centre for the New Economy and Society, discusses the report’s findings.

What new risks has coronavirus triggered?

The virus has made some known global risks seem less of an immediate concern and at the same time introduced a new set of uncertainties.

Just in January, when business leaders were asked to identify the biggest risks of the coming decade, climate change was high on the list. But as we are now so distracted by the coronavirus pandemic, concerns about sustainability and the green transition have fallen down the agenda. In their place, the COVID-19 Risks Outlook report found, business leaders were more concerned about specific threats like a prolonged global recession, which they were not speaking about back in January.

Uncertainties about the current virus outbreak are compounded by fears of further coronavirus waves in the future, leading to an economic downturn with a domino effect on supply chains, bankruptcies and the movement of people and goods across borders.

We’re in uncharted water when considering what a wave of bankruptcies might mean for jobs and lost livelihoods, and also how this will impact different industries. In a year’s time, are we likely to see just the largest firms surviving and a lot of the small- and medium-sized players disappearing?

When economic risks are mixed with other factors that are unfolding, a second set of effects begin to emerge. So much of our economic activity is digitalized, automated and integrated, and factors like the sustained shift in working patterns from lockdown restrictions creates new opportunities for cybercriminals, for example. Concern about the rise of cybercrime comes out as one of the top risks.

What challenges does the pandemic present to companies in emerging markets?

Many emerging economies already face a twin burden. First, weak health care systems leave many people with insufficient healthcare provision and limited access. Second, these economies don’t necessarily have the same strong fiscal positions that are often seen in the developed world.

Most developing economies are unable to afford the vital measures needed to prop up the economy during difficult times like coronavirus lockdowns, such as payments to furlough workers or providing loans and support to large industries. As a result, a number of emerging markets are now facing the possibility of a major debt crisis.

Some countries are looking to the developed world for support, while others are seeking help from major international organizations. The pandemic could push half a billion additional people into poverty around the world, many of them in developing countries and emerging markets. But poverty could also impact some developed economies, as there are plenty of countries where the most vulnerable households receive insufficient support to keep them from poverty.

COVID-19 could unravel some of the huge progress made by countries around the world to lift their people out of poverty.

coronavirus, health, COVID19, pandemic

What is the World Economic Forum doing to manage emerging risks from COVID-19?

The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.

As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.

To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications – a companion for decision-makers, building on the Forum’s annual Global Risks Report.

The report reveals that the economic impact of COVID-19 is dominating companies’ risks perceptions.

Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.

How do we bounce back from the impact of the crisis and build a better future?

We have looked at ways to “build back better” and it’s very clear that investing in greener economies is going to be a huge part of recovery efforts. Whether that’s cleaner energy, greening how our cities grow in the future, or creating more environmentally sustainable transport and mobility systems, sustainability is going to be a necessary part of building a better future.

Many economies have in the past looked at redefining industrial policy and building more sustainable infrastructure as an impetus for more sustainable growth. And we will certainly need a coordinated new stimulus and approach in these areas, but restarting growth is not necessarily limited to that side of things.

It has become clear during this pandemic there are other critical systems that have been underfunded or overlooked. Areas like healthcare and schools have not received adequate support, or job quality has not been as good as it should have been.

Investing in health, education, care and public services can both improve the resilience of our societies and prevent them from being so exposed to future shocks and will create a lot of jobs in the coming years.

Companies in both the developing and developed world are facing huge economic disruption. How can they blunt the impact to the workforce?

A lot of governments are offering support to large businesses, small- and medium-sized businesses and directly to households. Faced with the prospect of huge economic disruption, financial support like government wage-sharing schemes aims to ease the cost burden on individual companies and help them stay afloat.

There have also been some direct subsidies, with payments made to households in order to bolster their incomes.

All of these measures can help, but it is not going to be enough if we don’t also start imagining a new path to recovery. We need to start working on investments in new areas of future growth, which includes ensuring that small- and medium-sized companies survive and are functional when economies restart.

We’re already starting to see some of the permanent structural changes brought about by the impact of the pandemic. As parts of Asia and Europe begin to emerge from lockdown restrictions, there are signs of seemingly permanent changes in consumer behavior. We have to start rethinking where future sources of economic growth will come from.

The effects of recent events will be felt by many businesses for years to come and some may not survive without support. We have to think much more carefully about helping with reskilling and upskilling, and providing better social safety nets for affected workers, because it may be a two- to three-year journey before they’re able to move into a new sector.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Constitution of the 9th legislature of the European Parliament

To solve big issues like climate change, we need to reframe our problems

Any doubt?

GSMA announces first speakers for Mobile 360 Series-Middle East and North Africa

A Sting Exclusive: “Accelerating Trade Digitalization in Times of the Pandemic”, written by the UN Under-Secretary-General and Head of ESCAP

NATO summit, Brussels, 11-12/07/2018

The United Kingdom’s decision to leave the European Union will impact young people’s future the most

Guterres welcomes conduct of Afghan elections, commends ‘all who braved security concerns to uphold their right to vote’

Can I still send mail in the time of coronavirus?

Stable growth momentum in the OECD area

A brief history of vaccines and how they changed the world

Quality Internships: Towards a Toolkit for Employers

This company is breeding millions of insects in the heart of London

7 surprising and outrageous stats about gender inequality

Welfare of transported animals: MEPs urge EU states to do a better job

Financial support for workers affected by no-deal Brexit

EP leaders call for negotiations on upgraded Transparency Register to continue

Eight years after Fukushima, nuclear power is making a comeback

Black historical figures who shook the world, from a warrior queen to a Mexican president

Parliament approves key directive regulating professional qualifications

Russia won’t let Ukraine drift westwards in one piece

Elections in Europe: No risks for the EU, leaders readying to face Trump-Brexit

More needs to be done to bridge the digital gender divide

Technology and public healthcare: the basis to fight COVID-19

Forest fires: EU continues to mobilise assistance for Greece and other countries in region

Data Protection Regulation one year on: 73% of Europeans have heard of at least one of their rights

Too Young to Feel Hopeless – Mental Health of the Youth and the Effects of COVID-19

EU will have stronger powers in trade disputes

UNICEF calls on supply chain and transport industry to take COVID-19 vaccines to the world

Nairobi summit: Women’s empowerment a ‘game changer’ for sustainable development

Syria: At least seven children killed in yet another airstrike

Budget MEPs approve €104.2 m in EU aid to Greece, Spain, France and Portugal

This woman solved one of the biggest problems facing green energy

Withdrawal Agreement: Commission sends letter of formal notice to the United Kingdom for breach of its obligations under the Protocol on Ireland and Northern Ireland

‘You can and should do more’ to include people with disabilities, wheelchair-bound Syrian advocate tells Security Council in searing speech

3 dynamics shaping the future of security on the Korean peninsula

Wednesday’s Daily Brief: Women boost work profits, saving biodiversity, UK loses Chagos Islands vote, Gaza funding, malaria-free in Argentina, Algeria

Madagascar: UN Secretary-General reaffirms support for electoral process

Chart of the day: This is how many animals we eat each year

New Zealand Prime Minister opens door to 4-day working week

Digital democracy: a Swiss view on digital trust

Libya: Heavy shelling and civilian deaths ‘blatant violation’ of international law – UN envoy

Coronavirus: Commission presents practical guidance to ensure continuous flow of goods across EU via green lanes

Further reforms in Sweden can drive growth, competitiveness and social cohesion

Plastic is a global problem. It’s also a global opportunity

‘Counter and reject’ leaders who seek to ‘exploit differences’ between us, urges Guterres at historic mosque in Cairo

Avocado: the ‘green gold’ causing environment havoc

A third of young people polled by UN, report being a victim of online bullying

As ride-hailing firms drive into the future, who is being left behind?

COVID-19 has been a setback for women. Gender-responsive policies can stem the losses

How India can become a leader in sustainable aviation fuel

‘Stealing’ food from hungry Yemenis ‘must stop immediately’, says UN agency

Why is scientific collaboration key? 4 experts explain

Women in Switzerland have gone on strike – this is why

Climate change hits the poor hardest. Mozambique’s cyclones prove it

COVID-19: Commission creates first ever rescEU stockpile of medical equipment

MEPs strengthen EU financial watchdogs

More than 90% of the world’s children are breathing toxic air

Chart of the day: These countries have seen the biggest falls in extreme poverty

Security: better access to data for border control and migration management

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: