The COVID-19 (coronavirus) pandemiccrisis combines the worst characteristics of previouscrises. It features a simultaneous supply and demand shock;domestic, regional, and global scope; a projected longduration; and a high degree of uncertainty. What can beexpected for recovery from the pandemic crisis across theworld? This brief first assesses the projections of economicactivity in 2020 and 2021 and the domestic and internationalconditions that will constrain and drive a possiblerecovery. It then discusses the potential shapes of therecovery (or lack thereof) for specific country conditions.Finally, it explores the need to balance short-term andlong-term concerns, arguing in favor of policies that focuson sustained recovery, rather than quick but debt-fueled andshort-lived gains. Drawing on the lessons from past crises,the brief concludes that sustained economic recovery ispossible only when the underlying causes are addressed andthe foundations of growth are protected. For the pandemiccrisis, this implies mitigating the spread of the disease tomanageable levels while keeping the economy sufficientlyactive. In the short term, economic policy should focus onpreventing further poverty, averting unnecessary businessclosures, and avoiding lasting damage to human capital andproductivity. In the long term, policy reform should addressthe structural vulnerabilities that the pandemic crisis hasexposed. This includes reforms to expand labor and businessformalization; to improve the coverage and adequacy ofsocial protection; to extend financial inclusion to elderly,rural, and poor people; to promote digital transformationacross society; and, most basically, to improve access toand quality of public health care.
PDF
download
878987797
028-85220240
