It believed that 9/11 was the false flag operation in the history similar to the Gulf of Tonkin invasion in Vietnam and the sinking of the Lusitania during WWI. As a result of 9/11, we saw major changes in the world, including America’s wars of aggression in the Muslim world. Many millions were killed, and many more millions were injured and displaced. Similarly, coronavirus exists but the global politics of coronavirus is fraudulent. Since its kill rate is less than the ordinary flu, closing down the world economy cannot be justified, yet global powers are all set to do that. At the end of 2020 at a time when the outbreak is still raging in Latin America, Europe, UK, South Asia and much of the US, COVID-19 has killed less than 0.03% of the world population. To put this low figure into context in terms of lethality, the SmallPox killed 12%, Spanish flu killed 2.7% and HIV/AIDS killed 0.6% of the world’s population. The Plague of Justinian from its onset in 541 AD until it finally disappeared in 750 AD killed almost one-third of the population of Byzantium according to various estimates, and the Black Death (1347-1351) is considered to have killed 51% of the world population at the time.
At a global level, if viewed in terms of the percentage of the global population effected, the corona crisis is so far one of the least deadly pandemics the world has experience over the last 2000 years, but highest deadly in term of economy. In all likelihood, unless the pandemic evolves in an unforeseen way, the consequences of COVID-19 in terms of health and mortality will be mild compared to previous pandemics. While the global lockdowns will liquidate the global economies, the war drums can be heard and a new series of wars seem to be knocking at our doors.
COVID-19 has both triggered momentous changes and magnified the fault lines that already beset our economies and societies. Building a better World needs a better SWAT analysis. Rising inequalities, a widespread sense of unfairness, deepening geopolitical divides, political polarization, rising public deficits and high levels of debt, ineffective or non-existent global governance, excessive financialization, environmental degradation: these are some of the major challenges that existed before the pandemic. The corona crisis has exacerbated them all. The deep crisis provoked by the pandemic has given us plenty of opportunities to reflect on how our economies and societies work and the ways in which they don’t. The verdict seems clear: we need to change; we should change. There are deep concerns about the environment or questions about how technology can be deployed and governed for the benefit of society will force their way onto the political agenda. A very real risk exists that tomorrow the world will be even more divided, nationalistic and prone to conflicts than it is today. An alternative scenario is possible, that’s reset of global economy, in which collective action within communities and greater collaboration between nations enable a more rapid and peaceful exit from the corona crisis.
The public sector will have a bigger role to play in the future. It’s important for countries to recognise there are essential services that need to be provided in terms of healthcare, education, good governance and a social safety that cannot be compromised on
As economies restart, there is an opportunity to embed greater societal equality and sustainability into the recovery, accelerating rather than delaying progress towards the 2030 Sustainable Development Goals and unleashing a new era of prosperity. Hoping that the corona crisis will compel us to address four existential risks that we collectively face: nuclear threats; climate change; the unsustainable use of essential resources like forests, seafood, topsoil and fresh water; and the consequences of the enormous differences in standards of living between the world’s peoples strange as it may seem, the successful resolution of the pandemic crisis may motivate us to deal with those bigger issues that we have until now balked at confronting.
The reset agenda for building the better world must have three main components. The first must steer the market toward fairer outcomes. To this end, governments should improve coordination in tax, regulatory, and fiscal policy, upgrade trade arrangements, and create the conditions. Moreover, governments should implement long-overdue reforms that promote more equitable outcomes. Depending on the country, these may include changes to wealth taxes, the withdrawal of fossil-fuel subsidies, and new rules governing intellectual property, trade, and competition. The second component would ensure that investments advance shared goals, such as equality and sustainability. The third and final priority is to harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges.
The public sector will have a bigger role to play in future. It’s very important for countries to recognize there are essential services that need to be provided in terms of healthcare, education, good governance and a social safety that cannot be compromised on. What’s needed is to ramp up production of alternative forms of energy. And second, to have infrastructure that’s much more climate-friendly. In both these measures, the public sector can play a very big role, 70% of the world’s population has no social protection. While short-term measures such as income support are vital now, post-reconstruction policy frameworks are needed in the medium- to long-term. The problem to understand is that not everything that is profitable is of social value and not everything of social value is profitable.
It is not the business of governments to be in business. But unfortunately in poor countries, the governments need to be necessarily business-minded so as to be able to not only rationalise the dependence, but also reduce the undue economic and financial burden. Donor-driven poor countries need business-minded governments even more because, it is only a business-minded government, which can make a distinction between an enterprise that yields profits of immense social value and those that yield purely financial profits. A government without business know-how would hardly be able to maximise social benefits of a public sector entity at a minimum financial cost.
There is, therefore, a lot of economic sense in discarding the practice of using private capital through markets and instead investing the limited resources we mobilize through various means, including costly borrowing in public-sector projects aimed at expanding the much-needed physical infrastructure, like irrigation systems, power plants, roads, bridges, housing schemes, motorways and metro buses, etc. Such projects generate all kinds of jobs and most of these are highly labour intensive. More jobs would mean more disposable incomes in the hands of more people belonging to all classes: upper, middle and lower. More money in the hands of more people would mean steep escalation in the demand for all kinds of essential and non-essential consumer goods, necessitating expansion in production capacities of the goods in demand leading to significant growth in the real economy. The situation can only be sustained whilst inflation and interest rates remain historically low. If inflation were to take off, the central banks would be forced to increase the cost of borrowing, which would very quickly make these massive debts unsustainable.
History teaches us that many crises have occurred after years of low differentials, government expenditure cannot resolve the crisis, but merely postpone it. Worldwide, movements demanding a better future and calling for a shift to an economic system that prioritizes our collective well-being over mere GDP growth are proliferating. We are now at a crossroads. One path will take us to a better world: more inclusive, more equitable and more respectful of Mother Nature. The other will take us to a world that resembles the one we just left behind – but worse and constantly dogged by nasty surprises. We must therefore get it right. The looming challenges could be more consequential than we have until now chosen to imagine, but our capacity to reset could also be greater than we had previously dared to hope. This global reset requires concomitant reset at the regional, national and local levels. Pakistan is still a weak actor at the global level, but it can reset at the national and regional levels to build a better world, such resistance presupposes a strong state and a deep trust between state and society.
The writer is an economist, anchor, analyst and the President of All Pakistan Private Schools Federation. [email protected]