“Economic recovery will depend to a great extent on ending the health crisis. The truth is that right now nobody really knows how that will go,” said Naim during a virtual development forum on “The New Normal to the New Reality,” held by CMPC Companies.
He predicted that, “We will have vaccines sooner than the whole world imagined. The problem won’t be their production, but rather producing them in large enough quantities on the level of hundreds of millions of doses. The second thing will be the distribution challenge. This will impact the economic restart.”
He said that the upcoming debate will not be who will create the COVID-19 vaccines, but who will get them. “The next competition and resulting headlines will be the competitive race over who will get the vaccines as well as how and when. Health inequalities will be made clear at the global level.”
In the virtual forum lead by CMPC General Manager Francisco Ruiz-Tagle in which around one thousand people participated via Webex and through live streaming, the established analyst warned that the most serious economic crisis is coming to Latin America.
He said that this means, “It is possible that this will be a lost decade in terms of growth. The new middle class will experience extensive growth slowdown. We have to pay attention because there may be a perfect storm in which democracies may disappear.”
“I have a bad feeling about the recovery for developing nations. I think they will undergo an extended crisis that is more difficult, painful and harder to leave behind than what was expected. However, depending upon the availability and access to vaccines, the United States and other countries could begin to recover,” he added.
Moises Naím said that another one of the biggest backward steps the world has taken as a result of this pandemic is the fight against climate change. “The reality is that unfortunately the pandemic has entirely distracted us from climate change because governments, organizations, and companies have put all of their efforts and budgets into beating this health crisis,” he said.
“This pandemic could be a rehearsal for something larger that may come with climate change (…) While we continue doing less of what needs to get done, we will continue down a collision course with respect to the negative consequences that global warming might bring.”
He candidly added that, “Climate change will not get solved if China and the United States do not come to an agreement.”
The role of companies
Part of the debate during the meeting also looked at the role that companies have to play in this context and after the health crisis.
Ruiz-Tagle stated that, “At CMPC we believe it’s time to get involved in making the changes that this world needs.” As companies we play an important role in this matter, and we can’t exit this pandemic behaving as we had been. We have to take on the challenging of creating the conditions for this to be a time for change.”
That is why he added that innovation is one of the characteristics that companies and the private sector need to pursue in order to build a better future. “We need to boost innovation, attract and keep talent, better understand and connect to an empowered and maybe even more aware consumer. I am also referring to the need to address demands for transparency, handling the mistakes that companies have made and getting used to proper inspections not only from organizations, but coming from public opinion in general.”
Naím also added that another key role for companies is to help strengthen the political system of nations, namely democracy. “Democracy is under pressure. It’s under attack because basically it has a performance problem. It is not producing the social and economic results that people need.”
He suggested that, “Companies should take on a civic education role, which should not only begin in schools, since we must have an open debate around defending democracy, how it works, and how to protect it.”
In his view, “Political parties have done everything in their power to eliminate their own credibility along with the support and sympathy of the people. These must be recovered. I don’t think there is democracy without political parties, rather I think democracy needs many stronger parties capable of winning elections and governing well.”
This is why he emphatically stated that, “Capitalism and democracy both need to be adjusted to the 21st century”.
“Today’s current form of capitalism is showing us enormous volatility with a propensity toward highly catastrophic impacts because periodically another country or industry goes into crisis mode,” stated the international analyst.
He added that he is not a proponent of a total overhaul of capitalism, “In which everything gets tossed overboard and a new thing gets brought in that hasn’t even been defined. I think we have to fix the defects that are making capitalism function incorrectly, meaning that democracy pays the consequences.”
Lastly, he stated that we must keep in mind that just as the pandemic has accelerated and slowed down different problems around the world, it has helped strengthen other aspects that were under development such as the digital revolution.
“The digital revolution has become extremely important around the world. It had already been apparent in e-commerce, but we are seeing more progress around remote work, online education and digital living in general,” added Moises Naím.