The New York Times predicted that the Corona pandemic will become a catalyst for reforming the global economic system, after discussions have begun about the failures of this system before the outbreak of the epidemic, the most important of which is that capitalism and companies have become parasites on the planet.
In an article by Dr. Dambisa Moyo, an economist and author of "How the West Lost: 50 Years of Economic Foolishness, and the Clear Choices Awaiting Us" - that the debates unleashed by the epidemic have so far been dominated by thinking about what the world will look like, after the grip has subsided A pandemic to societies such as: Do we travel less? Will we work from home more? Will the standards in schools and public events change widely for years?
But - as Moyo says - the epidemic not only gives us an opportunity to rethink the best way to live and work, but rather provides us with an opportunity to reconsider the way the structures of our global economic system work.
3 things
The writer says that there are 3 things that rich countries must do immediately after the end of the pandemic, namely reforming their monetary policies, the forms of private investment that stimulate them, and the fight against monopoly. He called on these countries not to wait for companies to change on their own.
He explained that the current situation in central banks - which prevailed for 4 decades - encouraged companies, especially the largest publicly traded companies, to focus on short-term financial gains and stock prices at the expense of seeking long-term investments that would reap more mutual rewards on a large scale. The multiplication of the earnings of those who already own a lot of capital has resulted in uneven income accumulated and low wages for citizens in dozens of countries.
He added in the same direction that monetary policies have so far rewarded holders of financial assets more than those who have stock in real assets, such as land, factories, and employment, because the strongest central banks in the world have prioritized controlling inflation rather than expanding industrial capacity and employment, in what is called " The real economy. "
Fast returns and productive investments
The writer pointed out that it is not surprising that investors - who for years viewed slow global growth - were looking for quick financial returns instead of productive long-term investments, but were sometimes risky.
Nor is it surprising - as Dr. Moyo says - that companies, over the past decade, guided by shareholder demands, have focused on delivering fast, predictable returns to investors rather than investing in infrastructures with a longer horizon, such as research, plants and machines that will ultimately lead to innovation And drive economic growth.
Moyo concluded his article by saying that while many governments seem guided by nationalism, it is difficult to envision effective cross-border cooperation. However, past exploits in global cooperation, such as the creation of the new world order of the Bretton Woods system after World War II, provide examples that real leaders ultimately capture the moment even amidst enormous challenges.