‘Business as usual’ will only bring us more pandemics, this Oxford economist says
The seven world leaders gathering on Friday in Cornwall, England, for the G7 summit face some of the toughest problems in years: staving off climate disaster, figuring out how to vaccinate the world against COVID-19, halting Russian cyberattacks, instituting a minimum global corporate tax; resolving trade disputes—to name just a few items on the table.
That’s a daunting list, even for seven very rich countries—the U.S., the U.K., Canada, France, Germany, Japan, and Italy. In the end, their talks could fall far short of what’s needed.
So says Ian Goldin, professor of globalization and development at Oxford University and the founding director of the Oxford Martin School, the university’s interdisciplinary research center. Goldin, an economist, was vice president of the World Bank until 2006, was once an economic adviser to Nelson Mandela, and has served as a consultant for dozens of Fortune 500 companies, the United Nations, and the International Monetary Fund.
In his new book just released, Rescue: From Global Crisis to a Better World, Goldin says the world needs radical, groundbreaking change—and it had better come fast to stave off spiraling global crises. The book offers a blueprint for choices governments and businesses need to make. “This needs to be acted on before the impact of the pandemic fades and we are lulled into complacency,” he writes.
In an interview, shortened and edited for clarity, Goldin laid out for Fortune what he thinks needs doing:
You say in your book, we shouldn’t just “bounce back” after the pandemic. But to many companies, and to us, bouncing back seems like great news.
Keeping on the current track, there will be more pandemics, more climate change, more geopolitical tensions, more inequality—and a massive reversal of globalization.
“Business as usual” brought us this pandemic. We’ve come close to a global pandemic several times in recent years: Ebola, SARS, H1N1, and others. Unless we make a big commitment to stop them there will be many more, possibly much worse than COVID-19. They come from more and more people globally, living more densely, close to domestic and wild animals, and with global connectivity through airports and other travel spreading any virus more quickly. They [pandemics] can be stopped if countries work together.
What has the pandemic and working from home meant for investors and business?
The pandemic has compressed into a couple of months trends that would have taken years to emerge: The growth in online sales, the rise of Asian markets, consumers pushing for higher environmental standards.
Now businesses need to rethink their strategies for attracting talent. Physical, informal get-togethers are vital. Working from home can’t replace the social interaction needed for transformative innovation. For business to thrive, the convenience of remote meetings needs to be combined with the stimulation that comes from encountering new ideas and experiences.
Prospering in the post-pandemic world will require more agile business leaders who embrace change.
Is the pandemic a turning point in the way governments and companies are run?
We have been able to change in dramatic ways. Governments are doing now what would have been thought absolutely impossible in January 2020. Citizens are doing things that would have been unimaginable: working from home, wearing masks. We can change our behavior.
This is a unique moment—perhaps the only moment in our lives—to do something different. The Second World War was a tragic war, but out of it came a totally different world. It led to the golden age of capitalism, with the highest rate of investment and business growth and employment and rising living standards the world has ever seen.
These cataclysmic periods leave us with a choice: whether we want history to repeat itself, or learn from the lessons.
Has the pandemic revealed what we have been doing wrong all along?
We devote 1,000 times more effort to military preparedness than to pandemic preparedness. But all the experts tell us the risk of a pandemic killing us is far greater than a military conflict. That’s one example of how the pandemic should be a wake-up call.
President Biden is headed to Europe on Wednesday for the G7 summit. What are the most urgent things he and the other leaders need to do?
My hope is they will come to a very bold and strong decision about vaccine distribution. The majority of the world’s population has had no COVID vaccine. Only about 2% of Africans have been vaccinated, and a very small percentage of South Asians. That’s an absolute priority, both for others’ sake and ours, as the virus continues to mutate and threaten all our societies.
The other absolute priority is development financing. It’s estimated 125 million people will fall into absolute poverty because of the pandemic. Many more people will die of starvation than will die of the pandemic.
George W. Bush mobilized G7 leaders in 2008 [after the global financial crisis]. He called a heads-of-state meeting. It had a massive impact on coordinating global response. China was invited, even though it is not in the G7.
The contrast with what’s happening now is great. President Biden has not focused on global financial mobilization. The rich countries have found $17 trillion for themselves—that’s between 10% and 20% of their GDP.
But poor countries have spent far less than 1% of their GDPs on stimulus, because they just don’t have the money. The people who need it most have the least.
Far from COVID being the big equalizer, it’s exacerbated health and income inequalities. Rich countries have been able to stimulate their economies. Zombie firms are being kept alive on credit. There are unemployment benefits. None of those options are available in poor countries. In India, for example, for most people, there is no safety net, no health insurance, nothing.
How much difference can the U.S. and the rest of the G7 make—especially since China is not in the group?
The G7 represents a declining part of the world’s population and economy, but it’s still vitally important. If the G7 can’t agree, no way others can agree. President Biden convened the climate summit [a virtual meeting of world leaders in April to agree on climate policies], which included China. It is exactly the sort of thing he should be doing in other areas, because there is no one else that can do it.
There is no global problem that can be solved without the U.S. and China cooperating. If the G7 policies—which aim to stop crises and boost the world economy—don’t include China, then they are not global. You cannot solve pandemics, create cyber-stability, address climate change without China being part of the solution. Rising geopolitical tensions between the U.S. and China would kill the prospects for a more stable world.
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