An online discussion economic policies for pandemic exit and post area is slated for April the 22nd at 15:00 GMT+1. You can join the team on webconferencing system. Just in case the system fails, please go to Zoom meeting.
The ability of governments around the world to reopen the economy ultimately depends on their ability to better understand the spread and risk of the virus. It is also quite likely that the virus will remain a threat. Many countries are rolling out economic rescue packages, but a few have plans for reopening their economies and conducting economic, social and environmental policies in the years to come.
McKinsey has proposed the 5R timeline – 5 stages of Resolve, Resilience, Return, Reimagination and Reform – for business leaders to think and act across horizons. It is noteworthy that “20% of companies that emerged from the last recession did not have any particular starting advantage”, according to McKinsey. Instead, they managed to to achieve a small lead which they extended over the next year. There is no good reason why this lesson would not apply to countries. Resilient companies leaned up their balance sheets ahead of the downturn, maintained their capacities during the crisis and moved faster and harder on productivity. They divested more during the downturn and acquired more in the recovery.
Getting prepared to the “Return” stage involves, among other, protection of employees, reassurance of customers, restoration of supply chain and reinstating or revising business the model and practices. Companies and governments need to re-imagine the next “normal” and be clear about the regulatory and competitive environment. This requires a team work to plan for re-opening economies and achieving speedy and sustainable recoveries. Fiscal and monetary policies alone can mend broken value chains and offset the sudden halt of production. Also, there is a safe dose of fiscal and monetary measures, beyond which they can be counterproductive and aggravate the external balance, in particular. In the regard, the role of exchange rate must be at play, also to put the economy on a more competitive track.