eports related to the COVID-19 crisis are still largely focused on the toll of the virus and short-term responses to alleviate the human and economic suffering. Given the many unknowns about the pandemic, opinions vary wildly about the long-term medical implications, related solutions, and what will be needed to restore economies slowly and safely. COVID-19 is changing the business environment in practically every country, with most sectors in some form of crisis amid widespread fears of a protracted economic downturn.
History tells us that countries with established democratic institutions and more market-based economies are better positioned to address and withstand such crises. Many less-developed economies are already beset with serious challenges: major debt, governance issues, rampant corruption, high unemployment, large informal sectors, and few reliable systems for social support. They face a much more uncertain future.
Worldwide, small and medium-sized businesses and their employees are among the hardest hit. However, many governments are looking to the private sector for potential solutions and partnership in addressing human needs, in addition to preserving economic stability and national security. In early dialogues among them and leaders of civil society, six key challenges or essential themes for COVID-19 response, work and recovery planning are frequently identified. Explained below, these themes may form the basis for an economic recovery roadmap that the public and private sectors may follow to restore economies to make them more resilient.
Restarting Economies
The goal and overarching theme is restarting economies. The logistics of shutting down economies will soon be dwarfed by the challenges associated with recovery efforts in post-pandemic environments. Ultimately, the private sector plays one of the most vital roles of all: creating jobs. This will be one of the biggest indicators that countries are restoring prosperity. However, there is much more the private sector, business associations, and chambers can do to show leadership and contribute to faster problem solving. Efforts to balance the needs of production, transportation, and service provisions with requirements for social distancing will introduce a host of new challenges for everyone, from entrepreneurs to employees and customers. All of these issues represent untested policy challenges that must be communicated to governments to ensure they help create a business enabling environment.
Additionally, as the economic engines start back up, supply chains will be broken, the needs of industry will vary, and new challenges will accompany the demands for accelerated hiring or re-hiring. All will surely be factors in determining the allocation of limited government resources. Thus, businesses have multiple responsibilities to advise governments on measures that are most conducive to economic recovery efforts, both immediate and long-term. Companies can also connect stakeholders with other experts and organizations with necessary resources or better capacity and positioned to move quickly. Some of these opportunities may fall into the realm of corporate social responsibility.
Diversifying Supply Chains
Foremost, is a necessary reorientation of global supply chains. The past several weeks have demonstrated how easily these can be thrown off-kilter: Over-reliance by many countries on a single source for manufacturing—as with the U.S. and China—becomes increasingly hazardous when black swan events like the COVID-19 pandemic emerge. Experts far and wide have been warning about such business risks for years and pushing for global supply chain diversification. The calls have continued to grow louder in the U.S. due to ongoing trade disputes and concerns about China’s increasingly assertive foreign policy. COVID-19 halted favorite U.S. exports on everything from cell phones to hockey sticks for a time, in addition to medical supplies and other necessities.
New reports indicate the COVID-19 economy is hastening the re-shoring of numerous U.S. manufacturing elements in China, already rattled by the ongoing U.S. trade war with their host country. Other companies are signaling they will shift production to a wider net of global suppliers, most likely in neighboring Southeast Asian countries, as well as emerging economies in East Africa and Latin America. This presents an opportunity for the private sector and U.S. based policymakers to encourage improved rule of law and governance in countries where they plan to initiate more trade and business relationships. This will drive healthier growth and recovery results that may benefit all citizens and thus drive greater stability.
Obvious and early efforts include leveraging technology, including fast moves by trade organizations to modernize border clearance processes and reduce red tape, especially for essentials such as food and medical supplies. Another priority of many organizations will be facilitating the growth of inclusive digital economies to help more businesses get their products to market and ensure they can access reliable electronic means of moving capital. Meanwhile, experts, including the Center for International Media Assistance, assert that digital freedoms will become more important than they ever have been. The internet is increasingly viewed as a right, not just a delivery method. For most people, it is now the top tool to be informed, stay alive, and do their jobs.
Combating Corruption
Of all the obstacles to restoring a thriving global economy, the task of combatting corruption may be the most complex and daunting. A recent World Bank study indicates that, in some cases, injections of foreign assistance in high aid countries may exacerbate conditions that lead to corruption. With billions pledged worldwide for coronavirus support, it is feared a significant amount of the money will be lost through various channels due to corruption, if additional measures are not taken to mitigate that risk. This makes it imperative that the international development community increase the collective push to curb fraud and graft and help ensure the aid gets to people who need it most. Without transparency measures already in place, there is a greater likelihood that incoming support funds will be misdirected, stolen, or used for crony capitalism rather than supporting market-based systems. The business community shares in the responsibility to prevent these dominos from falling.
Anti-money laundering experts have pinpointed many activities that should be red flags to governments and watchdog groups. For example, we know that some types of insurance and real estate transactions may indicate illegal activity or improper use of funds. Such information can help governments anticipate and preempt the misuse of funds. Effective counters to the most common forms of corruption include diligent monitoring of government procurement contracts, public budgeting, and state-owned industry activity. Additional actions include support for NGOs that work to shine a light on situations where corrupt actors may seek to exploit the COVID-19 crisis.
Authoritarianism and Challenges to Democracies
At this time, even the world’s most open economies acknowledge the need for additional government controls. However, there is very real concern that market freedoms and other rights surrendered in authoritarian states will not be returned. The COVID-19 crisis has been used by autocrats in numerous countries, including Russia, The Philippines, and Hungary, to consolidate power. In addition to edicts controlling the economy, laws, and limitations framed as medical and security safeguards have led to increased surveillance on citizens, opposition figure arrests, bans on some political parties, and censorship. In Pakistan, military leaders have largely taken control of the COVID-19 health response, working directly with provincial governments.
Disinformation and cyberattacks are also a major concern. In addition to other activities, China has accelerated a major disinformation campaign about COVID-19, including far-flung conspiracy theories that must be debunked. Fact-checking and time limits or “sunset provisions” for some COVID-19 related laws are among the controls and accountability measures that the private sector in these economies should be doing or demanding in concert with civil society allies. We know that once autocrats take control of parts of their economies, they are not likely to give control back.
Economic Challenges for Women and Marginalized Groups
Social distancing and isolation policies have resulted in a larger economic burden for women, youth, and other marginalized groups and their path to economic recovery is expected to be more difficult. For women especially, there are also increasing concerns about victimization. Many countries with mandatory stay at home orders, including Bangladesh and Papua New Guinea, are reporting surges in domestic and gender-based violence.
The fact that women in many societies still lack basic civil rights and political representation compounds their inability to be heard and involved in potential solutions. In addition to working in service-oriented and fashion-related industries, traditional areas of economic activity for women in developing countries are based on their ability to trade or sell items for cash in open markets. Some travel with their goods. Many do not have bank accounts. Thousands of these women entrepreneurs are in countries currently observing Ramadan, and they expect to miss out on their biggest business days of the year, as shoppers spend more on special meals, new clothing, and gifts for the upcoming Eid-al-Fitr.
The business community must ensure that the interests of women and other groups that are often socially, politically, and economically excluded are adequately addressed in recovery policy debates. The Afghanistan Women Chamber of Commerce and Industry is among the most active: doing surveys, benchmarking with brother organizations, submitting proposals to cabinet ministers for interest-free loans, and requesting delayed rent payments for government space on behalf of women entrepreneurs. Other organizations are very focused on technology training, personal finance, and even virtual offerings for yoga or counseling to assist with personal health and stress management.
Chamber and Association Responses and Strategies
Finally, chambers of commerce and business associations are among the private sector leaders that must assume a larger role in getting their collective economies on track. This includes delivering the latest resources, information, and advice to members and governments that can be folded into COVID-19 response and recovery strategies. There are many great examples worldwide of private sector innovation in this vein.
Chambers of commerce and business associations in the United States, Kenya, Ukraine, Lebanon, and Venezuela are among those that quickly submitted COVID-19 response policy recommendations and proposals to administrations. These have included specifics on possible stimulus packages, tax breaks, and better banking access for citizens, to name a few. Groups are using a variety of mediums and platforms to get their message across: videos and podcast interviews in Egypt, surveys in Slovakia, articles in Ethiopia, and position papers in Yemen.
The voice of think tanks is also getting louder. Many are helping to collect valuable information and data. For example, Vérité in Sri Lanka recently hosted a forum with leaders of Parliament. Meanwhile, organizations in Burma are surveying small businesses to gauge their access to the country’s COVID-19 Fund and learn how they will use the money. The Center for Indonesian Policy Studies is focusing on food security and other key areas. Think tank México Evalúa provides analysis to local media on the COVID-19 impact on state owned enterprises in the energy sector.
Meeting the Moment
The impending global economic downturn threatens to dwarf the 2007 financial crisis that hit emerging markets particularly hard. In this extremely fast-moving and crowded information landscape, all populations are looking for trusted sources that can cut through the clutter and share relevant and timely facts, insight, and solution-oriented ideas for economic recovery. Many are looking to the private sector, with leadership from business associations and chambers, to step up and meet the moment. The six economic restoration themes outlined above may serve as an immediate checklist of areas to focus on, both to mitigate current risk and initiate long-term planning from an informed position.
a global affairs media network
Six Essential Themes for an Economic Recovery Roadmap
April 27, 2020
Worldwide, small and medium-sized businesses and their employees are among the hardest hit. However, many governments are looking to the private sector for potential solutions and partnership in addressing human needs, in addition to preserving economic stability and national security.
R
eports related to the COVID-19 crisis are still largely focused on the toll of the virus and short-term responses to alleviate the human and economic suffering. Given the many unknowns about the pandemic, opinions vary wildly about the long-term medical implications, related solutions, and what will be needed to restore economies slowly and safely. COVID-19 is changing the business environment in practically every country, with most sectors in some form of crisis amid widespread fears of a protracted economic downturn.
History tells us that countries with established democratic institutions and more market-based economies are better positioned to address and withstand such crises. Many less-developed economies are already beset with serious challenges: major debt, governance issues, rampant corruption, high unemployment, large informal sectors, and few reliable systems for social support. They face a much more uncertain future.
Worldwide, small and medium-sized businesses and their employees are among the hardest hit. However, many governments are looking to the private sector for potential solutions and partnership in addressing human needs, in addition to preserving economic stability and national security. In early dialogues among them and leaders of civil society, six key challenges or essential themes for COVID-19 response, work and recovery planning are frequently identified. Explained below, these themes may form the basis for an economic recovery roadmap that the public and private sectors may follow to restore economies to make them more resilient.
Restarting Economies
The goal and overarching theme is restarting economies. The logistics of shutting down economies will soon be dwarfed by the challenges associated with recovery efforts in post-pandemic environments. Ultimately, the private sector plays one of the most vital roles of all: creating jobs. This will be one of the biggest indicators that countries are restoring prosperity. However, there is much more the private sector, business associations, and chambers can do to show leadership and contribute to faster problem solving. Efforts to balance the needs of production, transportation, and service provisions with requirements for social distancing will introduce a host of new challenges for everyone, from entrepreneurs to employees and customers. All of these issues represent untested policy challenges that must be communicated to governments to ensure they help create a business enabling environment.
Additionally, as the economic engines start back up, supply chains will be broken, the needs of industry will vary, and new challenges will accompany the demands for accelerated hiring or re-hiring. All will surely be factors in determining the allocation of limited government resources. Thus, businesses have multiple responsibilities to advise governments on measures that are most conducive to economic recovery efforts, both immediate and long-term. Companies can also connect stakeholders with other experts and organizations with necessary resources or better capacity and positioned to move quickly. Some of these opportunities may fall into the realm of corporate social responsibility.
Diversifying Supply Chains
Foremost, is a necessary reorientation of global supply chains. The past several weeks have demonstrated how easily these can be thrown off-kilter: Over-reliance by many countries on a single source for manufacturing—as with the U.S. and China—becomes increasingly hazardous when black swan events like the COVID-19 pandemic emerge. Experts far and wide have been warning about such business risks for years and pushing for global supply chain diversification. The calls have continued to grow louder in the U.S. due to ongoing trade disputes and concerns about China’s increasingly assertive foreign policy. COVID-19 halted favorite U.S. exports on everything from cell phones to hockey sticks for a time, in addition to medical supplies and other necessities.
New reports indicate the COVID-19 economy is hastening the re-shoring of numerous U.S. manufacturing elements in China, already rattled by the ongoing U.S. trade war with their host country. Other companies are signaling they will shift production to a wider net of global suppliers, most likely in neighboring Southeast Asian countries, as well as emerging economies in East Africa and Latin America. This presents an opportunity for the private sector and U.S. based policymakers to encourage improved rule of law and governance in countries where they plan to initiate more trade and business relationships. This will drive healthier growth and recovery results that may benefit all citizens and thus drive greater stability.
Obvious and early efforts include leveraging technology, including fast moves by trade organizations to modernize border clearance processes and reduce red tape, especially for essentials such as food and medical supplies. Another priority of many organizations will be facilitating the growth of inclusive digital economies to help more businesses get their products to market and ensure they can access reliable electronic means of moving capital. Meanwhile, experts, including the Center for International Media Assistance, assert that digital freedoms will become more important than they ever have been. The internet is increasingly viewed as a right, not just a delivery method. For most people, it is now the top tool to be informed, stay alive, and do their jobs.
Combating Corruption
Of all the obstacles to restoring a thriving global economy, the task of combatting corruption may be the most complex and daunting. A recent World Bank study indicates that, in some cases, injections of foreign assistance in high aid countries may exacerbate conditions that lead to corruption. With billions pledged worldwide for coronavirus support, it is feared a significant amount of the money will be lost through various channels due to corruption, if additional measures are not taken to mitigate that risk. This makes it imperative that the international development community increase the collective push to curb fraud and graft and help ensure the aid gets to people who need it most. Without transparency measures already in place, there is a greater likelihood that incoming support funds will be misdirected, stolen, or used for crony capitalism rather than supporting market-based systems. The business community shares in the responsibility to prevent these dominos from falling.
Anti-money laundering experts have pinpointed many activities that should be red flags to governments and watchdog groups. For example, we know that some types of insurance and real estate transactions may indicate illegal activity or improper use of funds. Such information can help governments anticipate and preempt the misuse of funds. Effective counters to the most common forms of corruption include diligent monitoring of government procurement contracts, public budgeting, and state-owned industry activity. Additional actions include support for NGOs that work to shine a light on situations where corrupt actors may seek to exploit the COVID-19 crisis.
Authoritarianism and Challenges to Democracies
At this time, even the world’s most open economies acknowledge the need for additional government controls. However, there is very real concern that market freedoms and other rights surrendered in authoritarian states will not be returned. The COVID-19 crisis has been used by autocrats in numerous countries, including Russia, The Philippines, and Hungary, to consolidate power. In addition to edicts controlling the economy, laws, and limitations framed as medical and security safeguards have led to increased surveillance on citizens, opposition figure arrests, bans on some political parties, and censorship. In Pakistan, military leaders have largely taken control of the COVID-19 health response, working directly with provincial governments.
Disinformation and cyberattacks are also a major concern. In addition to other activities, China has accelerated a major disinformation campaign about COVID-19, including far-flung conspiracy theories that must be debunked. Fact-checking and time limits or “sunset provisions” for some COVID-19 related laws are among the controls and accountability measures that the private sector in these economies should be doing or demanding in concert with civil society allies. We know that once autocrats take control of parts of their economies, they are not likely to give control back.
Economic Challenges for Women and Marginalized Groups
Social distancing and isolation policies have resulted in a larger economic burden for women, youth, and other marginalized groups and their path to economic recovery is expected to be more difficult. For women especially, there are also increasing concerns about victimization. Many countries with mandatory stay at home orders, including Bangladesh and Papua New Guinea, are reporting surges in domestic and gender-based violence.
The fact that women in many societies still lack basic civil rights and political representation compounds their inability to be heard and involved in potential solutions. In addition to working in service-oriented and fashion-related industries, traditional areas of economic activity for women in developing countries are based on their ability to trade or sell items for cash in open markets. Some travel with their goods. Many do not have bank accounts. Thousands of these women entrepreneurs are in countries currently observing Ramadan, and they expect to miss out on their biggest business days of the year, as shoppers spend more on special meals, new clothing, and gifts for the upcoming Eid-al-Fitr.
The business community must ensure that the interests of women and other groups that are often socially, politically, and economically excluded are adequately addressed in recovery policy debates. The Afghanistan Women Chamber of Commerce and Industry is among the most active: doing surveys, benchmarking with brother organizations, submitting proposals to cabinet ministers for interest-free loans, and requesting delayed rent payments for government space on behalf of women entrepreneurs. Other organizations are very focused on technology training, personal finance, and even virtual offerings for yoga or counseling to assist with personal health and stress management.
Chamber and Association Responses and Strategies
Finally, chambers of commerce and business associations are among the private sector leaders that must assume a larger role in getting their collective economies on track. This includes delivering the latest resources, information, and advice to members and governments that can be folded into COVID-19 response and recovery strategies. There are many great examples worldwide of private sector innovation in this vein.
Chambers of commerce and business associations in the United States, Kenya, Ukraine, Lebanon, and Venezuela are among those that quickly submitted COVID-19 response policy recommendations and proposals to administrations. These have included specifics on possible stimulus packages, tax breaks, and better banking access for citizens, to name a few. Groups are using a variety of mediums and platforms to get their message across: videos and podcast interviews in Egypt, surveys in Slovakia, articles in Ethiopia, and position papers in Yemen.
The voice of think tanks is also getting louder. Many are helping to collect valuable information and data. For example, Vérité in Sri Lanka recently hosted a forum with leaders of Parliament. Meanwhile, organizations in Burma are surveying small businesses to gauge their access to the country’s COVID-19 Fund and learn how they will use the money. The Center for Indonesian Policy Studies is focusing on food security and other key areas. Think tank México Evalúa provides analysis to local media on the COVID-19 impact on state owned enterprises in the energy sector.
Meeting the Moment
The impending global economic downturn threatens to dwarf the 2007 financial crisis that hit emerging markets particularly hard. In this extremely fast-moving and crowded information landscape, all populations are looking for trusted sources that can cut through the clutter and share relevant and timely facts, insight, and solution-oriented ideas for economic recovery. Many are looking to the private sector, with leadership from business associations and chambers, to step up and meet the moment. The six economic restoration themes outlined above may serve as an immediate checklist of areas to focus on, both to mitigate current risk and initiate long-term planning from an informed position.
