“The pandemic has fundamentally changed our lives. It’s the biggest thing in all our lifetimes and will determine our futures. The surprise is not that it happened but that we were unprepared and didn’t do anything to stop it,” said Ian Goldin.
“It’s a time for grave concern but also hope. Our behaviour changes, the response from some governments, the re-evaluation of priorities, sacrifices made – all give cause for optimism.”
Goldin is Professor of Globalisation and Development at the University of Oxford and Director of the Oxford Martin Programme on Technological and Economic Change. He is a Professorial Fellow at the University’s Balliol College and a Permanent Visiting Fellow at STIAS. He was previously the Chief Executive of the Development Bank of Southern Africa, Economic Advisor to President Mandela and Director of Development Policy and Vice President of the World Bank.
Goldin was also one of those who predicted the COVID-19 pandemic. Two years ago, he hosted a five-part BBC series which reflected on the 2008 financial crisis one decade on. In the final episode he made this telling remark: “Climate change should be a global priority for many reasons. But in the short term, in my view, a pandemic is the most likely cause of the next financial crisis, and one that we’re woefully ill prepared for.”
In a live webinar, Goldin provided insight into how COVID-19 has changed all our lives, forever. He examined how the pandemic is changing the nature of work, geopolitics, economics and societies, increasing inequality and affecting the future of globalisation. He also discussed how we should respond to mitigate the outcomes.
Describing the pandemic as the “biggest development disaster since the World Wars”, he focused on the impact on inequality globally and nationally emphasising that lockdowns have disproportionately affected younger people and women leading to increases in intergenerational and gender inequalities.
“The young who have a lower likelihood of death (in the UK depicted as a higher chance of being struck by lightning!) have sacrificed jobs, social lives and studies to protect the elderly. This has immense consequences – for example, 1.3 billion children have been affected by school closures and 463 million of these have had no access to remote learning. UNICEF estimates that as many as 23 million will never return to schooling.”
“Those who can work remotely – mostly the wealthy – have been largely unaffected,” he said. “Most of the services that have shut down involve employees with lower incomes. The top 10% of earners have been largely unaffected, indeed many have benefited from soaring stock markets, while the bottom 20% have faced a 50% reduction in the USA and Europe – this is worse in developing countries.”
“The state of the job market is severe,” he continued. “Many low- and medium-skilled jobs have been lost. Opportunities have collapsed. The young are inheriting greater debt which will have to be repaid by future generations.”
“People with the lowest income – often ethnic minorities – have also faced the highest mortality. In the UK nearly double. This is due to overcrowded living conditions, less access to health services and co-morbidities like diabetes.”
“More stringent lockdowns have led to greater damage,” he added. “In countries with a strong fiscal stimulus, lockdown has had less impact. In South Africa, which has a weak fiscal stimulus, unemployment and poverty has escalated.”
He pointed to the different responses from governments.
“The rich countries have invested US $13 trillion to save companies – over four times the GDP of the whole of Africa.”
Using Germany and the UK as examples of governments that have not allowed firms to go bankrupt – through loans, tax moratoria and directly paying workers, he pointed out that at some stage this will end and society will have to pay the debt back.
“It’s postponing the pain and begs the question of whether governments should be intervening to support companies rather than directly supporting people. Government-mandated interference will lead to an increasingly corporatist world where politicians decide which firms win or lose. This can lead to mistakes, the keeping going of zombie firms and corruption.”
Developing countries are seeing a reversal of gains made, resulting in a rapid increase in hunger, poverty and deprivation. Over 100 countries have appealed to the International Monetary Fund. However, if they accept bailouts their credit ratings will be downgraded.
“This is a scandal,” said Goldin. “These countries are suffering economic collapse through no fault of their own – they are in this situation due to a force majeure. This is punishing the victims. The international community should write off the debt.”
“Failure to help countries in need is a failure to understand common humanity – it’s a failure in leadership and governance.”
Turning to successful versus unsuccessful country responses he pointed out that a number of less-wealthy countries have responded extremely well.
“Countries like Greece, Mongolia and Vietnam have done remarkably well,” he said. “Both democratic and authoritarian governments have done well – it isn’t about the political system but about social trust, cohesion and solidarity of the people, individual sacrifice, and the willingness and ability to be guided by international norms and regulations to safeguard the future.”
“Individuality has been challenged by the pandemic,” he added. “More individualistic societies – like the US and UK – have done worse.”
Behaviour changes have had both good and bad consequences.
“The move to remote work is a fundamental shift,” said Goldin. “I think presenteeism is broken permanently. It saves money and is good for health but it will lead to a more differentiated economy – a new class in the suburbs while city centres will become poorer and probably inhabited by younger, single people who prefer urban lifestyles, or for essential workers who cannot afford anywhere else.”
“For many, working remotely, provided they have adequate income and space, does not seem to have reduced productivity and not commuting has freed up time for leisure and entertainment activities but there could be long-term negative consequences on innovation and creativity. People and organisational cultures operate very differently in remote settings.”
“It’s also clear that there will be more global workers – the internationalisation of professional services.”
“But there has been a huge increase in loneliness, mental health issues, and general societal destabilisation,” he added.
“It’s a terrible time to be alone, not least for people who are unemployed and suffering economically and in other ways. We still don’t know exactly how bad.”
Stakeholders not shareholders in climate change
Working remotely has also had an impact on climate change with a dramatic reduction in carbon emissions (5 – 10%) over the year. But Goldin pointed out that this will rebound and could potentially be worse. Things like the stimulation of the construction and infrastructure sector which uses more cement as well as the deforestation of the Amazon will increase carbon emissions.
“Once again it’s a trade-off between the short and long term. Unless we get the message that we can change our behaviour for social good and create green new deals leading to a zero-carbon future, climate change will be accelerated.”
He emphasised the need for good global decision making going forward. Returning to the comparison with the World Wars, he asked “Which one are we in?”, pointing out that post World War I decisions by world leaders heightened nationalism and recrimination, leading to the Great Depression, the rise of fascism and an even-worse war.
In contrast after World War II, leaders like Roosevelt and Churchill had a vision of a post-war world order – leading to the creation of the United Nations, the Bretton Woods agreement, the Marshall Plan and the development of the welfare state. “They understood the need to work internationally, to increase solidarity, rebuild their enemies and ensure that the sacrifice was not in vain.”
“Right now the geopolitical situation is very worrying with rising nationalism in many countries. But old powers like the USA and the UK have been removed from their pedestals due to their mismanagement of the pandemic.”
Looking to the future, Goldin highlighted the need for more international collaboration and the management of globalisation.
“We don’t need less globalisation,” he said, “but it needs to be better regulated. The disconnect between the globalisation of goods and services and policies has led us here. We need to manage globalisation in effective ways that do not harm ourselves and our climate.”
“This is a wake-up call and hopefully will be the pandemic to end all pandemics but this will not happen if we insulate, create islands. There is no wall high enough to keep out global existential risks. The superspreading of the good is also the superspreading of the bad. All platforms spread both good and bad, it’s a question of how they are regulated.”
“The only way we can create a better world is through coalition and working together. People in their own lives doing what they can for the social good.”
He pointed to a recent survey that highlighted the global appetite for change.
“Three quarters of people indicated that they want change that is more sustainable and equitable. 91% of South Africans indicated that change is necessary.”
“Nothing will be the same. Taboos have been broken,” he concluded. “Our behaviour now will determine whether we slip into a disrupted dystopian world of increased inequality, future pandemics and escalating climate change or we create a portal to a new world of sustainable, inclusive development.”
Goldin has published over 50 articles and 22 books. His latest book, Terra Incognita: 100 Maps to Survive the Next 100 Years, was published by Penguin Random House in August 2020 and will shortly be available in South African bookstores. He is on twitter @ian_goldin and his website is iangoldin.org.
Michelle Galloway: Part-time media officer at STIAS