Opening of the World Economic Series: Rebooting the World Economy
By Public Policy Projects-
The Rt Hon The Lord Mayor of The City of London, Alderman William Russell, HM Marshal of The Diplomatic Corps, Alistair Harrison CMG CVO and UN Under-Secretary-General, Inger Andersen open the first of a global event series for the diplomatic community: The World Economic Series.
Public Policy Projects (PPP), a UK-based policy institute, and Diplomat magazine, have embarked on a virtual tour of the world, offering international insights on the ways that different nations are rebooting their economies during the Covid-19 pandemic. The programme, entitled the World Economic Series, hosted the largest gathering of UK Ambassadors outside of the State Opening of Parliament at its launch in late June 2020.
Chaired by Rt Hon Stephen Dorrell, the inaugural event welcomed Her Majesty’s Marshal of the Diplomatic Corps Alistair Harrison CMG CVO and the Rt Hon Lord Mayor of London Alderman William Russell, to kick off the discussion and set the context for the series. The opening meeting (which took place virtually) was attended by more than 100 diplomatic missions from around the world, creating a forum for discussion on an issue from which no individual nation is immune. The overriding theme of the inaugural meeting was clear: build back better.
The greatest challenge
Covid-19 has ravaged economies around the world. Nowhere is that truer than in the UK, where recent data from the Office for National Statistics reveals that the economy contracted by 2.2 per cent between January and March, the largest fall since 1979. However, the mood in the forum was far from downbeat. On the contrary, heads of mission from around the world welcomed the Lord Mayor’s resolute and optimistic reflection that “there is a real opportunity to come back from the pandemic stronger than ever before”.
The first of the keynote speakers, Her Majesty’s (HM) Marshal, raised the importance of global collaboration in addressing the Covid crisis, emphasising the value of economic diplomacy. It is crucial that diplomats pursue trade deals with increasing pace, he stressed, adding that “patience and persistence” will be needed to aid global economic recovery.
The crisis, which HM Marshal described as “the most challenging of our lifetimes”, has caused unimaginable disruption to almost every sector and, in many places, has redrawn the economic map entirely. While the challenges this has presented are far from being overcome, accelerated change is underway, rebuilding supply chains and rewriting the priorities for financial institutions and professional services. While some sectors have been successfully reactive in adapting to new times, others, including hospitality and tourism, remain beleaguered by uncertainty.
“As we face the economic consequences of Covid-19, economic diplomacy is going to be more important than ever,” said HM Marshal. This reflects the very purpose of the World Economic Series and the critical role it has to play in stimulating economies around the world and aiding them in their recovery. Calling out the dangers of protectionist policies, HM Marshal instead urged an intrinsically international approach. “Diplomats and other economic actors will have to be more nimble than ever before,” he said, warning that when it comes to negotiating trade deals “the swift cannot wait for the slow”.
While the challenges of the pandemic vary dramatically between nations, “a quick recovery will benefit all,” said HM Marshal, as he called for international organisations and nation-states to come together.
Leading the charge in this effort has been the Lord Mayor, who has been virtually travelling the world over the past weeks listening to the concerns of international economic partners and seeking to reinforce existing relationships. The City of London Corporation has been prioritising relaunching a “strong and full” UK economy while supporting key businesses in the Square Mile (99 per cent of which are SMEs) and sustaining the UK’s long-term competitiveness. The Lord Mayor also highlighted the work being done by the City on its recapitalisation project and how the UK can lead the way on green development.
Opportunities on the horizon
The new normal will not, and should not, reflect the world we recognised four months ago.
In the short term, this is a harsh reality that will bring tough and challenging times. However, in the long term, it represents an opportunity for change and betterment in many economies. The challenge around the world is getting economies moving again against the backdrop of Covid as a constant in everyday life.
Throughout 2020 and beyond, the rethinking of supply chains, adaptation to new markets and adjusting to new economic models will all present significant challenges. As happened in 2007- 2008, economic models are being questioned and financial best practice rewritten. “With interest rates ranging from negligible to negative, we are all going to have to learn to think quite differently,” said HM Marshal.
However, the world economy is not asleep. There are reports of tremendous progress already being made with effective adaptation underway. “Covid-19 has affected almost every part of the world and the world has responded by working closer together, from further away,” said the Lord Mayor, praising the “global thinking” of scientific, diplomatic and business communities in their response to the crisis.
Turning to the longer term, the Lord Mayor posed an important question to delegates on the call: “How can we take what we have learned throughout this pandemic and use it to build better international relations? ”
As the UK and other countries around the world begin to slowly reopen their economies, this is a question that warrants comprehensive thought from an international spectrum of stakeholders – and decisive action.
One of the ways in which rapid change has already been implemented is through the innovative use of technology for day-to-day communications on a scale never seen before. “One day last week, I started off the morning in Mumbai, went to Beijing, then to Melbourne, and came back to the UK for lunch – without jet lag,” said the Lord Mayor, impressed with the ease and normality of this new way of working.
Considering the financial services sector, the Lord Mayor reflected on the “remarkable consistency” of work that has been done remotely over the course of the pandemic, with no marked drop in productivity. While working from home has been enthusiastically incorporated into the lives of so many, there are those who have concerns about vast portions of the workforce staying away from the office for so long. In London, as these concerns are balanced with the constant threat to public health, plans are slowly being drawn up to get people back to the office.
The recovery “must be green” emphasised the Lord Mayor, reflecting on recent discussions within businesses across The City. This includes investing in sustainable infrastructure and prioritising environmentally-friendly policies in finance. One such advancement on this comes from the City of London Corporation and UK Government which have co-launched the Green Finance Institute to provide solutions for a low-carbon economy.
Of the many international responses to the speakers (most of which are protected by Chatham House Rule), Inger Andersen, Under-Secretary-General of the United Nations and Executive Director of the UN Environment Programme, offered her support for the predominant theme: building back better. For her, this means building forward and increasing resilience for the future in economic and environmental policies. While broadly encouraging investment to create jobs, she urged the international community to focus on green growth, creating jobs in sectors that specifically support environmental policies.
Ms Andersen also reflected on recent figures from the International Monetary Fund (IMF) which predicts a 4.9 per cent economic contraction for 2020, a higher rate than expected and one which will disproportionately impact nations that have experienced more damaging outcomes from the pandemic. The struggles of nations with weaker economies that cannot support their healthcare sectors should be a global concern, Ms Andersen suggested, due to the impact that a prolonged pandemic will have, weakening global stability and international resilience to the climate, nature and pollution crises.
One step forward
Over the coming months, the World Economic Series will seek to create “a more international context for public policy discussion,” outlined series Chair Rt Hon Stephen Dorrell. There has been a tendency to “retreat into a national viewpoint,” he added, stressing that the series will place exceptional focus on international collaboration and diplomacy, analysing how domestic economies are “getting themselves moving” as well as how world trade and investment can be reinvigorated.
The United Nations and other international organisations have an extremely important role to play over the coming months and years. There is a tremendous amount of work to do to “build back better” and individual nations cannot make progress in isolation. However, as HM Marshal warned: “There is no world crisis so bad, that a little effort from diplomats, helped by politicians, economists and the like, can’t make much worse. ”
The mistakes of the past must be recognised and strategies carefully considered to ensure that the global recovery is as swift and as stable as possible. The World Economic Series sets out a roadmap to facilitate this and help take the first step towards rebooting the world economy.
Report by Dan Male, Senior Editor, Public Policy Projects
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