The coronavirus pandemic has prepared the ground for tremendous changes in the global order since World War II. While policymakers, markets, investors, and businesses are all still coping up with the impact and aggravation of the massive economic fallout, the focus is increasingly turning towards the post-pandemic economy building strategy.
Although uncertainty reigns in the current scenario, a crucial aspect remains to be the resurgence of economic activity in the post-pandemic world. The crisis is set to catalyse colossal changes and will require the world to embrace agile methodology to cope up with the new order. The upcoming days will witness nations gearing towards reopening economic activities – a key metric to position themselves to take advantage of the post-pandemic ecosystem.
The current situation is indeed reminiscent of a real-time revolution of an aggressive digital world that has been extolled over the past couple of years. As the world awaits the lockdown to be lifted and reassess exit strategies, the contagion is set to change the existing status quo – bringing in a renaissance moment for humankind.
The Exit Strategy – What Will The Post-Coronavirus World Look Like?
The contagion induced crisis has pushed the world to rethink and analyse the strategies and challenged the norm of conducting businesses, triggering a global recession like never seen before. As the world navigates through the uncharted territories of a pandemic infected economy, what will the post-coronavirus world look like?
As per the International Monetary Fund (IMF), the coronavirus-induced recession will be far worse than the global financial crisis and revised its global GDP growth estimate from 3.3% to a contraction of 3%, something not seen since the Great Depression during the 1930s. The staggering facts are a validation that the upcoming days will require nations to adapt meticulous strategies and flexible policy frameworks to ace the race in the post-coronavirus world. As the world turns its focus on the exit strategy, the question of how to rebuild a healthier and robust economic future needs to be assessed.
The post-pandemic world may become more closed off and nationalistic than before. However, without combined efforts, the ascent to reviving the global economy may become challenging. Once countries start reopening economic activities, the first key factor of the exit strategy is enabling extensive testing to infuse confidence amongst people and investing ample fiscal stimulus to create a self resilient nation.
For nations that have been able to weather the pandemic storm tactfully, the pressure to reopen economic activities have been intense – from business groups witnessing entire industries laid barren, to citizens getting desperate to get back to work and reestablish some normalcy in their lives. The countries that have and are preparing to ease restrictions had something in common – they were among the first to implement stringent lockdowns and rapidly scaled up their testing capabilities. Case in point Germany – Europe’s largest economy which has eased its restriction norms to revive the economy. The country is expected to undergo its greatest postwar recession this year, although it appears to be recovering quicker from the pandemic than its other European counterparts, indicating a faster lockdown exit. As per a survey of around 9000 German companies conducted by the Ifo Institute for Economic Research, Munich, the business sentiment appears to show signs of recovery after a catastrophic few months. Its primary business index rose to 79.5 in May — up from a record low of 74.3 in April.
On the domestic front, India has entered Lockdown 4.0 and is currently experiencing its 4th recession since Independence – probably the worst till date post the liberalisation. As per rating agency CRISIL, the great lockdown is expected to shrink the nation’s economy 5% in the current fiscal. Considering the latest policy tweaks from the government and the announcement of financial stimulus targeting the MSME sector indicates that the nation is heading towards a self-resilient economy. The government ought to play a significant role in kickstarting the economy by reverting to greater inward-orientation. Schemes like “Make in India” is expected to gain higher traction as the nation moves towards self-resilience.
Heading towards uncertain circumstances, the road to recovery may seem like an unfathomable task, as stringent lockdowns and social distancing norms have significantly impacted the usual course of livelihood. For businesses, the post-coronavirus world will be filled with trivial challenges as they will require to append to the new trade culture and embrace hybrid work from home routine to stay afloat. The need to leverage the crisis management team to mobilise response time amidst crisis will help in transitioning businesses to the next level. The impact of the contagion is far-reaching than expected, and businesses who strategise and capitalise on the opportunity for event-driven transformation will thrive.
Additionally, India’s push towards the ‘Make in India’ programme is expected to boost the MSME sector; however, increased focus on raising the consumption pattern should be the modus operandi. The post-COVID era will witness an upheaval in foreign direct investment (FDI) flows in the manufacturing sector. Many companies will look out for safe havens outside China and relocate their manufacturing plant. For India, it appears to be a golden opportunity to be seized. India could thus emerge as the new growth engine. The focus, however, should be on stabilising industries to adhere to the demand. For the days to come, agility, scalability, and automation will be the buzz words for the post-pandemic era, and those who adapt to the new norms will emerge as the winners.