Before the crisis, a long-standing issue had been the ongoing and consistent erosion of institutions , as shown by declining or stalling checks and balances and transparency indicators.
Against this backdrop, in the revival phase governments should prioritize improving long-term thinking capacity within governments and enhance mechanisms to deliver public services, including greater digitization of public services. In the transformation phase, governments should work to ensure that public institutions embed strong governance principles and to regain public trust by serving their citizens.
A second area of concern before the crisis was high levels of debt in selected economies as well as widening inequalities. The emergency and stimulus measures have pushed already high public debt to unprecedented levels , while tax bases have eroding or shifting. To respond to these issues, in the revival phase, the priority should be on preparing support measures for highly indebted low-income countries and plan for future public debt deleveraging.
In the longer run transformation countries should focus on shifting to more progressive taxation, rethinking how corporations, wealth and labour are taxed.
This will require both national reforms and setting an international cooperative framework. For several years before the crisis, skills mismatches, talent shortages and increasing misalignment between incentives and rewards for workers had been flagged as problematic for advancing productivity, prosperity and inclusion. With the health crisis and subsequent acceleration of technology adoption, these challenges have become even more pronounced and compounded further by permanent and temporary losses of employment and income.
To address these issues, in the revival phase, countries should focus on gradually transitioning from furlough schemes to new labour market opportunities, scaling up reskilling and upskilling programs and rethinking active labour market policies. In the transformation phase, leaders should work to update education curricula and expand investment in the skills needed for jobs in markets of tomorrow, and in parallel, rethink labour laws for the new economy and use new talent management technologies to adapt to the new needs of the workforce.
To respond to this trend, in the revival phase, countries should expand health system capacity to manage the dual burden of current pandemic and future healthcare needs.
In the longer run transformation there should be an effort to expand eldercare, childcare and healthcare infrastructure and innovation. Over the past decade while financial systems have become sounder compared to the pre-financial crisis situation, they continued to display some fragility , including increased corporate debt risks and liquidity mismatches. In addition, access to finance, despite efforts to increase inclusion in recent years including through fintech applications , is not sufficiently widespread.
Against this backdrop, in the revival phase, countries should prioritize reinforcing financial markets stability, while starting to introduce financial incentives for companies to engage in sustainable and inclusive investments. In the transformation phase, the attention should shift to create incentives to direct financial resources towards long-term investments, strengthen stability while continuing to expand inclusion.
Pre-crisis there was increasing market concentration , with large productivity and profitability gaps between the top companies in each sector and all others, and the fallout from the pandemic and associated recession is likely to exacerbate these trends. We bring you our always eagerly anticipated and well-read choices of People of The Year. In our selection features men and women nominated for leadership amid crisis, thought innovation, critical social and corporate principles, and being voices of progression and positivity in difficult times.
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