A year ago, as the global economy was melting down, I highlighted the silver lining that could emerge from the unprecedented upheaval sweeping nations and upending billions of lives and livelihoods: the opportunity to remedy economic distortions that for decades have fuelled rising wealth and income inequality.
As the world marks the one-year anniversary of the global coronavirus pandemic, calls are growing to seize that opportunity now.
The pandemic is not over. But the global economy is recovering – albeit very unevenly. The Organisation for Economic Co-operation and Development (OECD) this week boosted its forecast for global growth this year to 5.6 percent, citing vaccine roll-outs and trillions of dollars in government fiscal stimulus working in tandem to nurse economies back to health.
But what was a “healthy” pre-pandemic economy for some was decidedly not for others, nor was it sustainable for humanity as a whole.
If COVID-19 has taught us anything, it’s that long-festering economic imbalances – rooted in systemic racism, sexism, bigotry, corruption and greed – exacerbated the spread of COVID-19. Now inequalities are deepening within and between nations as some bounce back from COVID fallout while others fall further behind.
In the United States, growth-supporting low interest rates have swelled asset values like housing and stocks, making the rich even richer. Meanwhile, unemployed Americans who lost their jobs to coronavirus restrictions are queuing at food banks and staring down the barrel of an unprecedented evictions crisis.
More help for them is imminent after the US Congress passed President Joe Biden’s $1.9 trillion stimulus package on Wednesday. But that aid is COVID-19 relief – not a cure for the economy’s ills.
Eliminating the scourge of deepening inequality takes political will and personal sacrifice. Levelling a playing field ultimately means those who’ve benefitted most from imbalances in the economic ecosystem will have to make do with less in order to give those without more.
The financial crisis of 2008 prompted the loudest voices in the global economy – the Davos crowd of billionaires, corporate titans and frequently quoted thought leaders – to pay lip service to fixing the broken parts of global capitalism. But their words never translated into meaningful action (notwithstanding some prepper-minded elites who built luxury bunkers to ride out an apocalypse).
But the global economy is not only made up of elites. Every person on the planet is part of it. And the pandemic has seen more and more of them pull together to pressure corporations and governments to do more.
Last year, the economy routinely ranked as the number-one issue with American voters – a majority of whom cast their votes for President Biden, who promised not only to rebuild the US economy, but to make it more just, sustainable and equitable in the process.
Thousands of people protested last year and launched online campaigns in support of Black Lives Matter and its call to level the economic and financial playing field for people of colour.
Corporations initially responded by finally retiring racist brands like Aunt Jemima, and promising to redouble efforts to catalyse more diversity and inclusion.
This week, Goldman Sachs said it will invest $10bn over the next decade to shore up the economic standing of Black women. Last fall, JPMorgan Chase said it would commit $30bn over five years to promote racial equity.
Such gestures are long overdue and welcome. But they are not enough. Powerful change requires new laws to be passed within nations, and new, enforceable agreements to be struck between them.
On that front, the picture is less encouraging.
The lack of a social safety net for growing legions of gig workers was, for example, laid bare by the pandemic, forcing governments to throw them temporary lifelines. A more permanent fix is needed.
But when faced with the prospect of losing the convenience of summoning an Uber or Lyft at will, Californians overwhelmingly voted in November to allow app-based ride-hailing and delivery companies to keep classifying drivers as “independent contractors” with some benefits, rather than “employees” entitled to superior benefits.
On a global scale, the OECD, World Bank, United Nations, International Monetary Fund and a slew of rights organisations and economists are calling on richer nations to do more to help poorer nations rebound from COVID, but so far there’s more talk than action.
Many ideas are being floated, such as waiving intellectual property protections for COVID-19 vaccines so more countries can produce them, redressing stunning inoculation disparities and accelerating the global vaccination drive.
Debt forgiveness – as in eliminating it rather than suspending repayments – is being advocated as a way to help heavily indebted poorer nations, which have been knocked to the ground by COVID, avoid seeing a decade of progress on reducing poverty wiped out.
Sovereign debt default reform has also come out of hibernation as a way to help end the practice of so-called “vulture funds” swooping down and buying up distressed sovereign debt for pennies on the dollar, only to turn around and demand repayments from countries that are so broke they can’t even afford basic safety nets and health services for their people.
These are big, bold multilateral measures. Most of the proposals pre-date COVID, but were unable to find traction before the pandemic. They will likely meet plenty of resistance now.
But the global economy is a tapestry that unites all of humanity and when every nation bounces back strongly, it creates a more robust recovery for all.