Covid 19 has made the world learn that pandemics will emerge and that humans are not infallible and society is needed to be prepared for such incidents. A delay in detection of such outbreaks may cost very heavy to the whole world as 95 % of cases in china could have been prevented if it would have acted three weeks earlier (n.a, 2020). The pandemic has led to overburden on the health infrastructure. The preparation of efficient infrastructure needs to be done and conventional definition of health infrastructure should be changed to prepare more resilient and transferable infrastructure. Thus future health infrastructure should be war prepared to fight a pandemic as still world has lesser knowledge of virus. Khanna et al (2020) say that there is a need to set up a kind of early warning system in different places as viruses in the new age are more severe unlike the past and are more devastating. Governments all over the world needs to make a mandatory agreement on a contingency fund big enough to deal with such a pandemic to avoid disruption of the world economy. There is a need to make a permanent general check system on international migration because knowledge of virus spread is still lesser known. Social distancing should be made a part of lifestyle and working from home should be regularized and normalised as far as possible to avoid disruption to economy as enough technological support is available today to achieve this.
Cleanliness should be made strict for 100 % population; every country should come out with a mechanism of maintaining hygiene and sanitization. A new and revolutionary solution for solid and liquid wastes need to be invented and governments should work together on these issues as it will also achieve the bigger target of sustainable development. A guide for people at risk be made like elder people, undernourished, malnourished and patients should be made and followed strictly in all the frameworks. There is a vital need to promote the research and development programs on the essential needs of the human then in the fields of entertainments or other non essential factors (Weforum, 2020). Knowledge is the only weapon against the future pandemics and outbreaks, strengthening our pharmaceutical segments updated in accordance with the applied research are also the need of the hour. International collaboration is the key of success for such key areas. The other lesson learnt is that there is a need to make indigenous diagnostics manufacturing sufficient enough not to be dependent on imports. Unpreparedness against Covid kits and PPEs were big factors of devastation, because when a pandemic hits the world, the only way to check is testing kits. Governments need to prepare adequate provisions to support the Balance of payments for the population in case of any pandemic or emergency hits a place. The global economy according to IMF is expected to contract by 3 % which is the worst downturn after the great depression of 1930s (Kpmg, 2020). For future, governments need to collaborate on a minimum safety programs including economical, social, employment, provisional which should be binding on all.
The covid 19 pandemic has again made a strong link between health, economy and environment. Thus to save the economy from such a shock, sustainable development is the key to efficient and sustainable economic development. Air pollution has contributed to higher number of mortality, deforestations has made human vulnerable to forest pathogens and climate change has uncovered undiscovered permafrost pathogens. But it also demonstrated that major number countries have strong resilience to turn their resources and actions towards coping the pandemic or any such emergency. Following could be taken to protect economies from financial risks in the future:
Investing in sustainable infrastructure- infrastructure is the core element for economical activities in a territory, effective and sustainable infrastructure can boost and sustain jobs even in the difficult time and financial health of an economy could be maintained. South Korea’s recovery from the financial crisis of 2008-09, which it did by investing 70 % of its stimulus in green measures recovered faster than other countries (Chaoui et al, 2011), similarly US’s investment in clean energy and public transport created more jobs and sustainability then in conventional recovery measures in the same period (Live.worldbank, 2020).
Creating the resilience for the most vulnerable in the society- Most of workers in the world belong to the informal sector, facilitating this sector with formal access to financial and basic facilities is the key to resilience from any economic shocks, this workforce in world is informally employed and that this workforce is very vulnerable to economic shocks and any emergency and is a big contributor to the economy. Need to strengthen this sector is the key. Fulfilment of the basic needs and a universal basic income could be very helpful for this sector.
Fiscal mechanisms- efficient fiscal measures and mechanism can help recovery and future resilience is the most trusted and efficient way of economical solidarity in future as fiscal measures are made by those policymakers who have both financial and political authorities and that they have enough room for creating such sustainable measures. Fiscal packages in the correct sectors could prove to be highly productive for the whole economy. Identifying future needs and essentials and then investing in the correct framework will be the key aspects of efficient fiscal policies in the future.
Encouragement for long term behavioural changes- The current pandemic has shifted the consumption pattern to a degree, electricity consumption in working from home, temporary avoidance of non essentials items have paved a way for implementing demand side resolutions to be made to make behavioural changes to sustainable development like encouragement to energy conservation, individual green energy, reusing, recycling modes, and support to work from home culture can help economy to a great degree.
Regulation of promising technologies- It will be greater for the fiscal policy makers to see new and promising technologies that will be job bearer of the future, these technologies which can support the resilience and responsibility for economy in future should be encourages and adopted. These decisions will encourage long term sustainable development, long lasting economic recovery and the base for future.
The covid 19 has presented the biggest challenges of all time to the global economic system; the outbreak imposed unprecedented global macro financial shock and pushed the global economy into a downturn which is deeper than the 2008 global financial crisis. Now the global economic system faces the double challenge of flow of efficient credit in the times of decreasing growth with management of hightening risks. The financial stability board that was constituted soon after the financial crisis of 2008, an international body to manage the coordinated efforts to stabilize global financial system has adopted the Basel 3 norms in 2015 for increased reliance against the financial shocks, but t the surprise only 28 countries have adopted the norms into their financial systems. There is an immediate need to adopt these norms by maximum countries. The FSB coordinates the work of national financial bodies at the international level and promote effective implementation of regulatory, supervisory financial sector laws and policies.
Though the international financial system is more resilient to sustain to finance the economy as a result of the regulatory changes after the 2008 financial crisis, still the surprising shocks given by the pandemic, funding markets are facing acute crisis and there is a need to take wide ranging measures to contain this problem (Live.worldbank, 2020). The actions which are taken till now are commendable, including big scale liquidity support and targeted bailout and stimulus packages. The priority today is an internationally coordinated policy of well functioning financial infrastructure and open markets. There is a real pressure of supply of credit to the real economy as non financial institutes face increasing liquidity crunch in these times
The role of non banking financial sector could be a game changer in this regard because covid 19 has put the financial system into a position of re-pricing and re-positioning. There is an urgent need of trust making in the global investment market which will help sustain the financial system once the economies recover from the shock as continued downward estimations of the growth rates and risk expectations with high uncertainty have led to increased volatility in the equity and other markets for the fear of risky assets, capital outflows and sharp decline in the foreign reserves (Khanna et al, 2020). There is an increased need of participation of non banking credit facilities which will help evolve connection and link between banking, non banking and financial markets.
There is an urgent need to check the ability of financial institutes to channelize funds to the market. Policies are adopted to enable market participants to obtain US dollars especially in the developing economies. Central banks must strengthen the financial intermediaries like investment banks to manage liquidity risks and to manage the counterparty risk of credit (Kpmg, 2020). Weakness to adopt such policies to check the aforesaid disruptions and suggestions provided will lead to a disruption of long lasting nature and will adversely affect the financial system.
Khanna et al (2020) say that it still remains to be seen in the politics of countries whether the covid 19 pandemic will demand are arrangement of the distribution of resources in the favour of poorest or not. The majority of the world’s workforce is in the informal sector and least facilities are available for them to make them strengthened and able to find opportunities in the market, the global informal market and workforce have been kept in a low trap equilibrium which is worsened by the pandemic. There is the need to streamline this workforce to the formal systems in order to make the world financial system stable which will require investment into the clean energy and sustainanable development. Covid 19 has pushed the economies into focussing on the key areas leaving apart the non essential and leisure sectors, this is a golden opportunity to channelize the funds into most needed and important sectors for human development rather research and development into non essential sectors.
The covid 19 pandemic has alerted many countries with regard to their health care management and self ability to erect and infrastructure of healthcare as such a pandemic was mostly non bearable by the healthcare infrastructure of even the most developed economies too (Kpmg, 2020). Now countries are thinking on being self reliant in the sector of basic and essential requirements like healthcare, water, infrastructure, food as healthcare exporting countries have banned or been very strict in exporting healthcare equipments during this time and optimum allocation of resources was being hindered.
The climate crisis can also be seen as a crisis with no immediate affect but is contributory of the global hurdle in general stability of human institutions. Its long term effects are likely to be very threatening and thus, countries should spare a share of their budget into green and sustainable investment in infrastructure which are now on the radar of many economies for being self reliant in basic amenities
The covid 19 pandemic has and is marking long lasting effects on the global institutions and human sustainable survival. There is a need to revive the economic resourcing which is climate and environment sustainable as uninterrupted and irrational resourcing from earth will make the human life susceptible to many pathogens and environmental dangers which can erode or reduce the long history of human development in all the fields. The world leaders must drop the idea of resource extraction from the vulnerable and sustainably important areas. Corruption, cyber security, optimum allocation of resources is some areas to be focussed on from the policy making point of view.
Chaoui, L., Grazi, f., Joo, J. & Plouin, N. (2011) OECD regional development working papers 2011/02. Retrieved from https://www.oecd.org/korea/49330153.pdf
FSB.org (2020) COVID-19 pandemic: Financial stability implications and policy measures taken. Retrieved from https://www.fsb.org/wp-content/uploads/P150420.pdf
Home.kpmg (2020) Covid 19 insights: emerging risks. Retrieved from https://home.kpmg/xx/en/home/insights/2020/04/covid-19-insights-emerging-risks.html
Khanna, R., cicuineli, M., Gilbert, S., Honavar, S. & Murthy, G. (2020) COVID-19 pandemic: lessons learned and future directions. IJO 68 (5). Pp.703-710.
Live.worldbank.org (2020) What the future holds: covid-19 and the global economy. Retrieved from https://live.worldbank.org/what-future-holds-covid-19-and-global-economy
n.a. (2020) Facing the future—what lessons could we learn from covid-19? Journal of Public Health 42(2) pp. 221-222
Weforum.org (2020) Impact of covid-19 on the global financial system. Retrieved from http://www3.weforum.org/docs/WEF_Impact_of_COVID_19_on_the_Global_Financial_System_2020.pdf
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