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While the climate crisis has virtually disappeared from media and the focus is on the pandemic, residents of locked down cities around the world cannot help but notice cars are no longer pumping out exhaust, planes are grounded and industrial smog is no longer choking them.
From the pandemic, “we’ve learnt about the enormous fragility of society and an economy that neglects the environment,” said Stern. Disturbing the relationship between wild animals, domestic animals and humans creates conditions where viruses can come into existence and allows their transmission.
However, Guriev argues that many developing countries are more aware of the need to fight extreme poverty today than of the climate crisis. In this context, the current extremely low oil prices “point to the wrong solution," he says.
And it is developing countries that are set to be worst hit by the pandemic. Erik Berglof, director of the Institute of Global Affairs at LSE and professor of economics, stresses that unlike their counterparts in the developed world, developing countries will not be able to spend their way out of the crisis with huge stimulus packages.
“The crisis we are facing is a medical and economic emergency. In many EBRD countries and across the developing world, the economic crisis hit before the virus, which had not really taken hold at the time. They were hit by a collapse in commodity prices, falling remittances and capital flight, all before they even had to deal with the medical emergency, which of course impairs their capacity to address it.”
The economists are united on the need to learn from the lessons of the Great Recession and its aftermath. “We must rule out a step back into austerity from the beginning. That was a big mistake after 2008-10,” said Stern, stressing that austerity won’t help countries exit the economic consequences of the lockdown.
“The biggest risk is that we go into a deep slump. The political, economic and health impact would be devastating.”
2.6​ ​ING: How a post-Covid world could look
Low interest rates for even longer or maybe even forever, and ballooning government balance sheets will shape the post Covid-19 era. But that's not all. The health crisis may have fundamentally altered the structure of our economy.
End of the world as we know it?​. There will be an aftermath to the economic emergency measures. Low interest rates for even longer or maybe even forever and ballooning government balance sheets will definitely shape the post Covid-19 era. In the eurozone, heated discussions about the adverse effects of the ECB’s unconventional measures, as well as tensions over debt sustainability and the right macro policy prescription, are likely to return with a vengeance. But there is more. Based on recent experiences during the Covid-19 crisis, more structural changes also look likely.
For some, getting sick means going on paid leave and retaining access to high quality healthcare services. For others, especially those with part-time contracts, it means either losing their job or having no or limited access to healthcare services. However, it wouldn’t be surprising to see higher wages for healthcare workers, as demand for their services peaks and supply shrinks, not least because of lower cross-country mobility as a result of lockdown measures. The crisis has (at least temporarily) redefined the term systemic-relevant employees. Gig economy workers could be hit hard, though.
10​ TURKEY Country Report​ May 2020 ​ ​www.intellinews.com