WEF report shines light on world economy amidst COVID-19

World Economic Forum’s Annual Global Competitiveness Report has been released earlier in the day which had been delayed due to the ongoing coronavirus pandemic.

The report examines recovery from COVID-19 and how it can build productive, sustainable, and inclusive economic systems

A special edition, published this year, elaborates on the priorities for recovery and revival, and considers the building blocks of a transformation towards new economic systems.

The report assesses the features that helped countries be more effective in managing the pandemic and provide an analysis of which countries are best poised for an economic transformation towards systems that combine “productivity”, “people” and “planet” targets.

Almost one year after the onset of the COVID-19 crisis, the deep economic recession has triggered continues to have profound economic and social consequences.

While no nation has emerged unscathed, this year’s Global Competitiveness Report finds that countries with advanced digital economies and digital skills, robust social safety nets, and previous experience dealing with epidemics have better managed the impact of the pandemic on their economies and citizens.

“The World Economic Forum has long encouraged policymakers to broaden their focus beyond short-term growth to long-term prosperity. This Report makes clear the priorities for making economies more productive, sustainable, and inclusive as we emerge from the crisis. The stakes for transforming our economic systems simply could not be higher,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Amir Jahangir, Chief Executive Officer of Mishal Pakistan and the Country Partner Institute of the Future of Economic Progress System Initiative, World Economic Forum, said, “The success stories from Pakistan in the light of the Global Competitiveness Index 2020 is the performance and strengthening of the institutions, scaleup of digitization both at the public and private sectors.

“the surge for online services and data has increased more than 200 times in CoVID19 (Coronavirus) time period, both at the domestic and international level. CoVID19 has locked down communities and businesses into isolated environments, making the entire world go into Digital Incubation Ecosystems.

The work from home has led to an increase in all levels of digital consumption across all strata of society. The Pakistani businesses have been forced to deploy digital solutions across all segments of the society including, Education, Business Processing, Services, and non-manufacturing, etc. He further said The Government needs to devise a system to use digital technologies for the welfare of the people. Also, tax regimes on technologies that help fight COVID-19 and contribute to data generation should be revisited to create more value for the citizens.”

The Report identified factors that registered the most negative for emerging and developing economies as Pakistan are the Business costs of crime and violence, Judicial independence, Organized Crime, Extent of market dominance and public trust in politicians.

The Report identifies factors that registered the most positive shifts for emerging and developing countries are Government’s responsiveness to change, Efficiency of train services, Venture capital availability, country capacity to attract talent and collaboration within a company.

In recognition of the extraordinary developments in 2020 and of the unified global effort required to tackle the health crisis and its socioeconomic fallout, the Global Competitiveness Index rankings have been suspended for 2020. The 2021 edition will see a return to benchmarking, providing a refreshed framework to guide future economic growth.

The report reveals that countries like Netherlands, New Zealand, Switzerland, Estonia, and the United States with advanced digital economies and digital skills have been more successful at keeping their economies running while their citizens worked from home. These countries have performed well on this measure.

In advanced economies, business leaders saw increased market concentration, a marked decline in competition for services, reduced collaboration between companies and fewer available skilled workers in the employment market as the shift to digitally enabled work accelerated. On the positive side, leaders saw greater government response to change, improved collaboration within companies and increased availability of venture capital.

In emerging markets and developing economies, business leaders noted an increase in business costs related to crime and violence, a reduction in judicial independence, a further reduction in competition and growing market dominance, and stagnating trust in politicians. They, too, expressed positive views on government response to change, collaboration within companies, and venture capital availability. They also noted an increase in the capacity to attract talent, potentially facilitated by the more digital labor market.

“During this time of profound uncertainty, the health crisis and economic downturn have forced a fundamental rethink of growth and its relationship to outcomes for people and planet. Policy-makers have a remarkable opportunity to seize this moment and shape new economic systems that are highly productive while growing shared prosperity and environmental sustainability,” said Saadia Zahidi, Managing Director, World Economic Forum.