Future of post COVID pandemic world: Investment in infrastructure, new technology will be game-changer

August 19, 2021 4:48 PM

The world is assured to see a reset as the unprecedented public health crisis and operational disruptions caused by Covid-19 have broken the myth of ‘old normal’, the ‘new normal’ calls for accommodative policies and inclusive goals under an alternative development paradigm

Indian economyAt the crossroads, international relations should give the shifting developmental priorities their due.

By Atul K Thakur

The global pandemic Covid-19 has caused an unprecedented crisis and altered the course of history. In reckoning its genesis, severity, and counter-response, the existing world order has failed miserably. More as the writings on the wall rather than a prognosis, the operational disruptions, restricted mobility and glaring insecure future are certainly going to redefine the way globalisation, international trade, intergovernmental collaboration, multilateral culture and cross-border migration have been perceived and liberally pursued under the old normal. The new normal poses many challenges and fewer avenues of green shoots, which calls for absolutely appropriate policy responses.

Braving the new world

A scenario where an acute public health crisis and systemic failure are defining the existence of humankind beyond borders, essentially imagines a post-pandemic world with a realistic view about the damages made and how to go ahead on a path less travelled. To brave the new world, otherwise elusive, a global consensus is needed for revitalising the United Nations (UN), international financial institutions such as the World Bank and regional development banks like Asian Development Bank (ADB). The UN’s role is still very critically important in creating a common platform for finding a broad-based approach to strategise the economic rebounding process and re-establish the norms of international economic engagements and development partnerships.

The World Bank Group deployed over $157 billion to fight the pandemic’s health, economic, and social impacts over the last 15 months (April 1, 2020 – June 30, 2021). This is the largest crisis response of any such period in the Bank Group’s history and represents an increase of more than 60% over the 15-month period prior to the pandemic, according to the World Bank.

The crisis caused by COVID-19 pandemic has highlighted severe fragilities and inequalities within and among nations. Coming out of this crisis will require a whole-of-society, whole-of-government and whole-of-the-world approach driven by compassion and solidarity,” United Nations response to Covid-19 is principally well-meaning. After its late institutional response to the crisis, the UN is making course-correction with the socio-economic response and recovery plan for the middle and lower-income countries. As per the UN’s own estimate, while a significant proportion of the UN’s existing $17.8 billion portfolio of sustainable development programmes is being repurposed towards COVID-19 needs, additional funds are required. Noticeably, the UN Covid-19 Response and Recovery Fund supports the rapid implementation at the country level of the UN Sustainable Development Goals (UN SDG) framework for the immediate socio-economic response to COVID19.

While the action through communication and socio-economic responses have been praiseworthy, the UN surely couldn’t act in the same manner on finding the cause of Covid-19 and its unusual global spread through its General Council or Extraordinary Meeting. A sheer irony, the Covid-19 couldn’t be seen as an imposed unprecedented crisis–and practically its origin and spread pattern were not discussed at the inter-governmental level as they needed.

Extending a helping hand

With the world going in reset mode, it is important to ascertain a few key frontiers of challenges, especially from the Middle-Income Countries (MIC) and Least Developed Countries (LDC). It is vital for the governments, central banks and the other stakeholders to offer immediate helping hands to the affected families, migrants, workers, youth population, children, women and Micro, Small and Medium Enterprises (MSMEs). Considering the scale of damage, resource-mobilisation should be targeted. Instead of being driven through tokenism, the relief measures should be oriented fair and square to work on the ground and should help the potential beneficiaries.

Regional and subregional economic cooperation in South Asia

Being one of the worst affected regions, the South Asian countries are particularly vulnerable with the uncertainties over vaccines, inadequate public healthcare infrastructure and ever-growing economic inequalities. In such a challenging emerging scenario, the Asian Development Bank (ADB) Economic Forecasts made in July 2021 appears more than conservatively optimist, “In South Asia, new waves of infections prompt a lower growth forecast of 8.9% for 2021, followed by growth at 7.0% in 2022. India’s 2021 growth projection is downgraded from 11.0% in April to 10.0%, followed by 7.5% growth in 2022.” Surely the final financial figures will depend a lot on how the national economies approach economic rebounding processes on their own or through regional and subregional economic cooperation.

Investment in infrastructure and new technology will be the game-changers besides the development partnership. As a positive example, India’s development partnership with Nepal for boosting infrastructure and connectivity—and reconstruction shows the way. Unlike China, India’s development partnership is not maneuvered through any grand strategy. India has no Marshall Plan or Belt and Road Initiative (BRI), however, its contribution to the development of weaker economies through its Development Partnership Administration (DPA), Ministry of External Affairs (MEA) is very significant and reflects on India’s commitment for global peaceful co-existence.

Quest for an alternative development paradigm

At the crossroads, international relations should give the shifting developmental priorities their due. The changing world necessitates creating a firmer ground for defeating poverty and inequality—and making sustainability, as the steering force of business and our social action. Welfarism is not an obsolete concept, this should be recognised. While imagining a post-pandemic world and coping with some of the glaring transitory challenges, an overt inclination is much needed for adopting the inclusive and sustainable development framework. We have to come through this together.

(Atul K Thakur is a policy professional and columnist. Views expressed are the authors’ own.)

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Unemployment rate seems settled at 7-8%, says CMIE’s Mahesh Vyas
2Forex reserves down by USD 1.47 bn to USD 639.64 bn
3Net direct tax mop-up grows 74% at Rs 5.70 lakh cr so far this fiscal