Business Maverick: Build-back better to withstand the next global systemic economic disaster

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The COVID-19 pandemic may be unprecedented but it is unlikely to be the last physical or financial systemic crisis the world will face. Multilateral organisations and responsible investors are emphasising the importance of building a resilient global economy that acknowledges the complexity and interconnectedness of our environmental, socio-political and economic systems and can adapt, recover and bounce forward next time.

Multilateral organisations like the World Bank and the OECD are urging policymakers to take the opportunity offered by COVID-19 to build a more resilient economy; one that is more prepared for systemic crises down the line and which addresses the vast inequalities and economic vulnerabilities exposed during this crisis.

, refers to a bouncing forward economy in the context of a world in which we are part of a complex system of environmental, socio-political and economic systems that, it says, cannot be dealt with linearly in the event of a crisis like COVID-19. Instead of relying on policymakers to prevent, avoid, withstand, and absorb any threats, they say, resilience relies on the recovery and adaptation of the economy in the aftermath of a crisis, as envisaged in the diagram below.

She also addresses the fact that virus pandemics and climate change share several defining features in terms of their impact, “including their ability to rapidly and exponentially impact societies, particularly the most vulnerable elements.”, in which it compares the nature of pandemics and future environmental crises – both of which are physical, not financial, shocks to the global socio-economic equilibrium.

 

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