The world is in crisis – would anyone doubt this? The crisis is, in fact, unprecedented. The Covid-19 conundrum has altered global dynamics and compelled communities, worldwide, to reconsider almost everything. It has jolted our popular beliefs. While many crises are yet to unfold, Covid-19 broadly represents several interconnected problems i.e., a health crisis, economic fallout and climate change challenges.
What is of real concern is that all countries are confronted with the same challenges, to a varying degree, and must find answers to them. Some are conflicting in nature and have certain tradeoffs. The global communities would like to reopen the economies as swiftly as possible and jumpstart the economic rebuilding process in right earnest but the health concerns of people don't permit this.
Bangladesh, for instance, has partially reopened after 66 days of shutdown and is closely evaluating the situation along with the potential obstacles the country may face when it is fully open. Nevertheless, the social distancing, partial lockdown and/or general holidays are contributing to natural de-growth of economies, which are – though not desirable – bringing myriads of benefits to global climate at the expense of economic development. In parallel, the countries need to reassess traditional growth strategies to not compound existing climate problems. Such are the complexities the world is exposed to. For all practical purposes, we can't pick one or two of the problems while keeping the remainder aside.
The post-Covid-19 world may herald the return of Keynesianism as governments across the world are planning to inject huge amounts of money to rejuvenate their suffering economies. However, the problem here with Covid-19 is complex as we perhaps can't be hasty with the economic recovery process unlike with any other financial crisis.
In the absence of a vaccine – which according to some would take at least a year to be available for use – we may need to continue to conform to social distancing rules at work and other places for a longer period. What we can comprehend is that the post-Covid-19 era would be different in many ways. Notably, the German football league has resumed but is being played behind closed doors. Some other leagues would also follow suit.
It is also worthwhile to consider that the second wave of the 1918 Spanish flu pandemic, reportedly, was deadlier than the first – this warrants devising plans to contain the second wave of the Covid-19 pandemic in a more coordinated way.
From another perspective, many companies, that have been incentivised for years by governments, are tending not to take care of their staff members even for a month. The people, who have been the prime movers of these companies, are being laid off or are at the risk of losing their jobs. That no backup or emergency funds are at the disposal of the companies is quite difficult to fathom. Globally, we have created a system, i.e., a "grow-forever society," assessed predominantly based on a single parameter – gross domestic product (GDP). The welfare of people, as a result, is, more often than not, neglected. As such, a better normal is very much expected by many rather than reverting to business-as-usual.
There is a growing sense that we are better off if we have a more resilient society with well-being parameters integrated into it. We should have a very detailed inside view of the society to be able to clearly address its core problems. However, if the core problems are not holistically considered and are only tackled in isolation, we would see better days with aggregate GDPs by way of modern technology and access to more shopping malls, elevated expressways and fancy cars on our streets – yet we may continue to be as fragile as manifested by Covid-19.
The Covid-19 pandemic has not only stirred healthcare systems into action globally but has also suddenly brought into focus its severe shortcomings, for instance, even healthcare workers are not provided with basic health protections. In the long term, we must consider how our health systems are structured, their sustainability and their capacity to protect all in times of crisis.
While there is an obvious distinction between the 2008 financial crisis and the present, experiences can certainly be drawn from the 2008 case. As far as climate change is concerned, the recovery from the 2008 financial crisis was very emission-intensive. Back then, the financial crisis, according to the International Energy Agency (IEA), induced a dip in carbon emissions by 400 million tonnes in 2009 with a strong rebound of 1.7 billion tonnes in 2010.
In all likelihood, we would see Covid-19 driven emissions drop this year, which is barely anything but to celebrate as emissions would bounce back once economies attempt to get fully back on track. Climate change, therefore, warrants policy decisions that can lead to emission reduction when economic activities prop up and can be followed in the coming years. In any case, we may also look back to the 2009 rebuilding process to gauge what went well, what didn't and why this occurred in this manner.
As aforementioned, Covid-19 represents several interconnected problems, for which – if we want to address them effectively – policymakers around the world need to set clear and straightforward policies. How we eventually respond would lay the foundation for post-Covid-19 era, which, to many people, is going to be a better normal.
To realise that, we cannot design a rebuilding process that only emphasises profit maximisation, resource concentration and GDP growth – instead, it should be a conscious move with increased attention to environmental and social parameters. In other words, governments around the world must ensure that any spending under the purview of an economic rebuilding process should deliver the maximum environmental, social and economic returns to the society – in comparison to other available options. What is imperative is to ensure political traction for a better normal instead of being lofty and nascent.
The author, a Humboldt Scholar, is an environmental economist. He is a senior advisor for an international development agency.