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By Laurie Goering
LONDON, June 3 (Thomson Reuters Foundation) – As protests over racial injustice sweep the United States and a virus-driven global downturn threatens to hike inequality, spending to restart economies must focus on creating a “greener, smarter and fairer world”, top public figures urged Wednesday.
About 170 nations will see their economies shrink this year, bringing more debt, deficits and “a very high risk” of greater poverty and economic disparity, said Kristalina Georgieva, managing director of the International Monetary Fund (IMF).
“We know that this pandemic, if left to its own devices, is going to deepen inequality,” she told an online event organised by the World Economic Forum (WEF).
But if stimulus spending – which the United Nations says could amount to 10% of global GDP – helps strengthen “the social fabric of our societies” and protect vulnerable people, it could result in “a better world for all”, she said.
The money might be invested in expanding social programmes, improving education, creating low-carbon jobs and reducing climate-change risks, which hit the poor hardest, she said.
Britain’s Prince Charles said the pandemic – and financial stimulus to battle it – offered a rare opportunity to wrest the world’s economy onto a more sustainable path.
“We have a golden opportunity to seize something good from this crisis. Its unprecedented shockwaves may well make people more receptive to big visions of change,” he added.
But, as climate change and other threats to stability grow globally, there is only a “rapidly shrinking window of opportunity to rethink”, he added. “It’s an opportunity we have never had before and may never have again,” he warned.
The WEF and partner organisations on Wednesday proposed a “Great Reset” initiative to ensure the pandemic recovery puts economies onto a more sustainable and fairer path.
