Like the Great Depression of 1929-1939 and the Great Recession of 2008-2010, the global economic crisis associated with COVID-19 is called the Great Lockdown. Now is the time to think of what history would say about this crisis, either “The Great Reversal” or “The Great Reset”. The Managing Director of the International Monetary Fund (IMF), Ms. Kristalina Georgieva gave a speech at the World Economic Forum, calling for an urgent need for investments in a greener, smarter, and fairer world in the future in the so-called “The Great Reset”.

Within this context, the IMF pointed out various opportunities to shape the recovery. 

On green growth, governments should introduce public and private investment incentives to support low carbon and climate-resilient growth that could lead to job-rich recovery, such as planting mangroves, land restoration, reforestation or insulating buildings. The current low oil prices can be taken as an advantage to eliminate subsidies and introduce carbon prices as an incentive for future investments.

On smarter growth, the big winner of this crisis is the digital economy. However, the digital divide should not widen any further. Therefore, the IMF together with partners such as the World Bank, should encourage investments to reduce the digital divide.

On fairer growth, there is a need to concentrate on investing in people – expanding education and social programs for the most vulnerable people so that inequality would not deepen as what had happen in prior pandemics.

References

IMF. The Great Reset Remarks to World Economic Forum Kristalina Georgieva, Managing Director, IMF June 3, 2020 

World Economic Forum. The Great Reset. 

World Economic Forum. Now is the time for a 'great reset' 03 Jun 2020 Klaus Schwab. 

Contributor: IIYAMA Miyuki (Research Strategy Office)