Page 46 - COVID-19: The Great Reset

In the post-pandemic era, according to current projections, the
new economic “normal” may be characterized by much lower

growth than in past decades. As the recovery begins, quarter-to-
quarter GDP growth may look impressive (because it will start
from a very low basis), but it may take years before the overall
size of most nations’ economy returns to their pre-pandemic level.

This is also due to the fact that the severity of the economic shock
inflicted by the coronavirus will conflate with a long-term trend:
declining populations in many countries and ageing
(demographics is “destiny” and a crucial driver of GDP growth).

Under such conditions, when lower economic growth seems
almost certain, many people may wonder whether “obsessing”
about growth is even useful, concluding that it doesn’t make
sense to chase a target of ever-higher GDP growth.

The deep disruption caused by COVID-19 globally has offered

societies an enforced pause to reflect on what is truly of value.
With the economic emergency responses to the pandemic now in
place, the opportunity can be seized to make the kind of

institutional changes and policy choices that will put economies on
a new path towards a fairer, greener future. The history of radical
rethinking in the years following World War II, which included the
establishment of the Bretton Woods institutions, the United
Nations, the EU and the expansion of welfare states, shows the

magnitude of the shifts possible.

This raises two questions: 1) What should the new compass
for tracking progress be? and 2) What will the new drivers of an
economy that is inclusive and sustainable be?

In relation to the first question, changing course will require a
shift in the mindset of world leaders to place greater focus and
priority on the well-being of all citizens and the planet. Historically,
national statistics were amassed principally to furnish
governments with a better understanding of the available

resources for taxation and waging war. As democracies grew
stronger, in the 1930s the remit of national statistics was extended
to capture the economic welfare of the population, [34] yet distilled

into the form of GDP. Economic welfare became equivalent to

45