Like each previous global crisis, the coronavirus pandemic is expected to produce lessons learnt and prompt change. Regionally, the Economic Commission for Latin America and the Caribbean has stressed that a new development model is needed due to the COVID-19 crisis.
The commission called for more redistributive institutions that have greater concern for minorities, women and older persons, and one that takes into account climate change. To have an impact in the new global economy, the region would have to move towards greater regional integration in terms of production, trade and technology.
Locally, last week, a report commissioned by the Chamber of Commerce said new economic strategies are needed in the Cayman Islands to adjust to and capitalise on the ’new normal’ of a post-COVID-19 world.
This should include an updated economic strategy to better prepare the islands for external shocks, and to diversify and create a more substantive domestic economy that embraces technology.
As companies are thinking about shortening their supply chains, a greater emphasis on local production could also lead to discussions about enhancing local agriculture, the report noted.
At a virtual seminar held Monday on how regional organisations are responding to the crisis, Alicia Bárcena, executive secretary of the United Nations regional commission, said, “The world of the future is going to be completely different.”
While globalisation would not be rolled back, changes will result in a more regionalised global economy.
“Companies are recalculating; there is a reorganisation of economic geography to depend less on imported manufactured goods. We will have to turn again to regionalisation and to regional integration, since the global chains will surely be organised around three poles: the Americas, Europe and Asia-Pacific,” Bárcena said.
She argued that the COVID-19 pandemic requires a coordinated global response in today’s interconnected world.
She said international cooperation is more urgent on the fiscal side. Many countries in the region are considered to be middle income – some of them in the Caribbean, which are already highly indebted – which means they are not granted low-cost concessional facilities, or low interest rates.
“We are calling for multilateral organisations to make loans at favourable interest rates and to provide relief to highly indebted countries, deferring their debts or forgiving them. Otherwise, the payments will be impossible and fiscal space will be compromised,” the ECLAC executive secretary said.
Last week, ECLAC predicted a historic contraction of regional economic output this year. The 5.3% decline in GDP would be the worst fall in the region since the Great Depression of the 1930s and the crisis of 1914.
In the virtual conference, organised by the Germany-based EU-LAC Foundation, Bárcena also called on the European Commission to pursue a “new green deal”, as the Latin America and Caribbean region had been doing, so that both can converge towards a more democratic, equal and sustainable world.
The United Nations official said it was necessary to forge a much more solid concept of cooperation with Europe.
“We already have it, but it needs to be reinforced. We must go beyond this because there is going to be a reconfiguration of trade. The question is how do we ensure that a market of 650 million inhabitants such as ours can have an important role and better collaboration on technological and digital matters, in fact, on all matters,” Bárcena said.