## How will the world be different after COVID-19?

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**Canonical URL:** [How will the world be different after COVID-19?](https://www.imf.org/-/media/files/publications/fandd/article/2020/june/how-will-the-world-be-different-after-covid-19.pdf)

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### Daniel Susskind — Crisis as revelation and opportunity
- The COVID-19 crisis is "the nearest we have to a revelation for atheists" (Rabbi Jonathan Sacks), highlighting a biblical sense of shock and the "fragility and vulnerability of the human situation."
- Novel features: a global medical emergency from a poorly understood virus; a self-inflicted economic catastrophe as a necessary policy response.
- Many distressing aspects are continuations of preexisting problems:
  - Striking variations in infections and outcomes reflect existing economic inequalities.
  - Low wages for "key workers" reflect the market's failure to value what matters.
  - Disinformation and declining faith in experts follow a decade of rising populism.
  - Absence of coordinated international response reflects "my country first" global politics.
- The crisis focuses collective attention on existing injustices and weaknesses; the world will only look significantly different if we take action to resolve these problems and bring about fundamental change.

*DANIEL SUSSKIND is a fellow in economics at Balliol College, Oxford University.*

### James Manyika — Acceleration of digital and structural trends
- The world after COVID-19 is unlikely to return to the world that was; many existing trends are being accelerated.
- Digital economy expansions:
  - Remote working and learning, telemedicine, and delivery services are rising.
  - Explosion of cross-border data flows.
- Structural changes accelerated include regionalization of supply chains.
- The future of work has arrived faster, with amplified challenges:
  - Income polarization, worker vulnerability, more gig work, and occupational transitions.
- Reconsideration of beliefs and policy trade-offs:
  - Efficiency versus resilience.
  - The future of capitalism, densification, industrial policy.
  - Role of government and institutions.
- Shift in responsibility from institutions to individuals over two decades exposed by strained health systems; reconsideration of paid sick leave and universal basic income.
- Choices made during crises can shape the world for decades; collective action is critical to build inclusive growth, prosperity, and safety for all.

*JAMES MANYIKA is chairman and director of the McKinsey Global Institute.*

### Jean Saldanha — Need for a new multilateralism and Bretton Woods reform
- Refers to Arundhati Roy: "The Pandemic Is a Portal" — pandemics force humans to "imagine their world anew."
- COVID-19 has tested the limits of global cooperation; support for developing economies remains inadequate.
- Developing economies faced:
  - Record capital outflows and tightening financial conditions.
  - Unprecedented pressure on limited fiscal capacity to tackle public health and social needs.
- Calls for a fitting UN-led reform agenda including the IMF to address structural drivers of debt vulnerability.
- Agenda must:
  - Shift development finance away from market-friendly reforms and incentives for private investment.
  - Abandon the dogma of austerity.
  - Rich countries must meet official development assistance commitments.
  - Correct power imbalances in global institutions to recognize needs and rights of the two-thirds of the world’s population in the Global South.
- Warns that failure to respond decisively will fatally derail the 2030 Agenda and the Paris Agreement.
- A new multilateralism must center human rights, gender equality, and climate.

*JEAN SALDANHA is director of the European Network on Debt and Development.*

### Sharan Burrow — Toward an inclusive, resilient, and sustainable recovery
- The post-COVID-19 world must be "more inclusive, resilient, and sustainable."
- Preexisting problems: rising inequality between and within countries, working poverty, weak social protection, inadequate public health systems, lack of plans to reach net-zero carbon emissions by 2050, and absence of a sustainable real economy with quality jobs.
- Historical parallel: Bretton Woods formed a postwar social contract; now we need an ambitious reconstruction plan while ending the pandemic.
- International support is essential for collective survival and as investment in health, the global economy, and multilateralism; the IMF and multilateral system will be decisive.
- Recovery goals and policy tools:
  - Full employment and a new social contract.
  - Public investment in the care economy, education, and low-carbon infrastructure as stimulus to reduce inequality.
  - Wage policy, collective bargaining, and labor market regulation to revive demand and income, and to hold companies accountable for workers.
- Debt relief should focus on the United Nations Sustainable Development Goals and enduring economic growth; warns against shortsighted fiscal consolidation that hindered post-global financial crisis recovery.
- Shared prosperity requires shared ambition and global solidarity.

*SHARAN BURROW is general secretary of the International Trade Union Confederation.*

### Sergio Rebelo — Permanent economic changes and policy lessons
- COVID-19 will leave a lasting imprint, causing permanent changes and teaching lessons.
- Public health and prevention:
  - Virus screening likely to become part of life, analogous to security measures after 9/11.
  - Important to invest in infrastructure to detect future viral outbreaks and to protect economies if immunity is temporary.
- Labor-market policy:
  - Many economies adopted versions of Germany’s Kurzarbeit (short work) subsidy to keep workers employed at reduced hours and pay, with government compensating some wage shortfall.
  - Keeping firm-worker matches intact aids quick recovery; improve implementation and make such policies permanent in recovery tool kits.
- Remote work:
  - Likely to become more common; evidence suggests working from home is at least as productive as office work.
- Digital transformation:
  - Accelerated adoption of e-commerce, telemedicine, videoconferencing, online teaching, and fintech.
- Supply chains and reshoring:
  - Companies facing shortages and bottlenecks will likely reshore some production, but automation means this trend will not create many jobs.
- Government role and public debt:
  - Governments will be bigger after acting as insurer and investor of last resort; public debt will balloon, creating financial challenges worldwide.
- The most important lesson: importance of working together on global problems.

*SERGIO REBELO is a professor of international finance at the Kellogg School of Management at Northwestern University.*

### Ian Bremmer — Geopolitical acceleration: deglobalization, nationalism, and China’s rise
- COVID-19 has accelerated three key geopolitical trends shaping the next world order.
- First trend: deglobalization
  - Logistic difficulties point to a shift away from global just-in-time supply chains.
  - Economic difficulties and growing nationalism will push companies to localize operations and favor national and regional supply chains.
- On China’s geopolitical rise:
  - China has transformed into an economic and technological superpower; crisis diplomacy could position China as a "soft power" superpower.
  - Skepticism persists due to distrust of Chinese numbers and the initial cover-up that enabled global spread; political narratives (e.g., from the Trump administration) may intensify U.S.–China tensions.
  - Likely outcome: emergence of a new cold war between the United States and China after the pandemic.
- Concludes that some things will remain unchanged even as the geopolitical landscape shifts.

*IAN BREMMER is president and founder of Eurasia Group.*

*Source: IMF Finance & Development, June 2020 — "How will the world be different after COVID-19?"*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2020/june/how-will-the-world-be-different-after-covid-19.pdf_