How the coronavirus pandemic could provoke a ‘Great Reset’ of capitalism across countries and sectors

Name: Low-paid garment workers in Bangladesh face mass unemployment amid coronavirus crisis
Uploaded: 2020-06-03T07:00:13.000Z
Duration: 1 min 40 s
Description: Low-paid garment workers in Bangladesh face mass unemployment amid coronavirus crisis

Global leaders must steer the market towards fairer outcomes, ensure stimulus programmes support equality and sustainability, and use the innovations of the fourth industrial revolution to address health care and social challenges

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An employee of University Hospital Southampton takes in an artwork by street artist Banksy called Game Changer on May 7. People have shown great willingness to make sacrifices for the sake of health care and other essential workers. Photo: AFP/ University Hospital Southampton

Klaus Schwab

Published: 3:00pm, 3 Jun 2020Updated: 10:28pm, 3 Jun 2020

Covid-19 lockdowns may be gradually easing, but anxiety about the world’s social and economic prospects is only intensifying. There is good reason to worry: a sharp economic downturn has already begun and we could be facing the worst depression since the 1930s. But, while this outcome is likely, it is not unavoidable.

To achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.

There are many reasons to pursue a Great Reset, but the most urgent is Covid-19. Having already led to hundreds of thousands of deaths, the pandemic represents one of the worst public health crises in recent history. And with casualties still mounting in many parts of the world, it is far from over.

This will have serious long-term consequences for economic growth, public debt, employment and human well-being. According to the Financial Times, global government debt has already reached its highest level in peacetime.

Moreover, unemployment is skyrocketing in many countries: in the US, for example, one in four workers has filed for unemployment since mid-March, with new weekly claims far above historic highs. The International Monetary Fund expects the world economy to shrink by 3 per cent this year – a downgrade of 6.3 percentage points in just four months.

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Low-paid garment workers in Bangladesh face mass unemployment amid coronavirus crisis

All of this will exacerbate the climate and social crises that were already under way. Some countries have already used the Covid-19 crisis as an excuse to weaken environmental protections and enforcement. And frustrations over social ills like rising inequality – US billionaires’ combined wealth has increased during the crisis – are intensifying.

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