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Govts, firms need to make changes to face new normal: experts

ABU DHABI, August 12, 2020

Firms and governments will need to make a lot of changes in their working to face the challenges and the 'new normal' brought by the Covid-19 pandemic impact, said leading experts and economists participating in an e-symposium.
 
Addressing the concluding symposium – The Future of Global Economy: Growth Challenges and Risks of Depression – as part of the TRENDS Global Economic E-Forum, they tackled the future of the global economy related to its growth trajectories after the Covid-19 pandemic.They highlighted the various growth challenges and risks of depression facing the global economy, said a Wam news agency report.
 
Opening the e-discussion, Robert Koopman, the Chief Economist and Director of Economic Research and Statistics Division at the World Trade Organisation, pointed to a pattern of economic re-globalisation. 
 
"The Covid-19 crisis has decimated the global economic markets. Therefore, the recovery will be very weak by all accounts," he said.
 
He also highlighted several avenues of mitigating future pandemics and crises and said that firms, households, and governments would need to evaluate the trade-off between risk and efficiency further. 
 
"Firms need to make a lot of adjustments between disrupted supply chains and automation of production while governments need to manage emergency stockpiles better," he said.
 
According to Dr Koopman, this goes hand in hand with healthcare policies such as contact tracing. "On the level of households, we have experienced remote work and the ability to earn an income while practising social and physical distance, albeit with differences in digital access and privacy concerns," he added.
 
Dr Rabah Arezki, the Chief Economist for the Middle East and North Africa Region (MENA) at the World Bank, stressed the need to focus on the health response, given the occurrence of the second wave of Covid-19. However, he said that congruently, we need to postpone fiscal consolidation until the time is right.
 
He said that it makes greater sense to eradicate leaks and increase transparency than engage in fiscal consolidation. 
 
"The Gulf countries have done well on digitalisation. The competition agenda should be the next step in the post-pandemic period. This might be a good move for attracting more investment," he said.
 
Dr Jeronim Capaldo, an Economic Affairs Officer in the UN Division on Globalization and Development Strategies at UNCTAD, said the macro-performance had been the fundamental driver of trade, especially when fiscal policies have a different role to play than in the previous crises.
 
"We need to organise an entire array of macro-economic policies, and reorganise them around income," said Dr Capaldo.
 
He also said that the constraints on financial policies have also led to an unbalanced development of global economies, which has made them unfit to deal with economic crises, including the Covid-19 pandemic. He also underlined the importance of more progressive tax policies.
 
Delivering the concluding remarks, Director-General of the TRENDS Research & Advisory, Dr Mohammed Al-Ali, said the research centre assembled 20 well-known experts from major economies. "They made projections about the future of the economy and provided adequate recommendations. The e-forum will be an annual event," Dr Al-Ali said.
 
The next TRENDS event – A Global Anti-Covid-19 Treatment: Between Development Efforts and Regulatory Protocols – will be held on August 26, 2020, at 19:00 UAE time. All sessions were live-streamed via TRENDS YouTube channel and other social media platforms. - TradeArabia News Service



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