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EMEA sets out Covid-19 economic resilience foundations

According to the economists at the Euro-Mediterranean Economists’ Association, early warning, crisis management and stimulus are the three crucial pillars on which to base any response to a pandemic-induced economic crisis. Version française

EMEA sets out Covid-19 economic resilience foundations

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(photo : EMEA)
(photo : EMEA)
Early warning, crisis management and stimulus; according to the Euro-Mediterranean Economists’ Association (EMEA), these are the three essential pillars that need to be put in place in any resilience package designed to mitigate severe economic disruption like that seen in the wake of the Covid-19 pandemic. As the Mediterranean economists had already pointed out in a report in April 2020, “Countries with a resilient system and which have consequently managed to resist vulnerabilities over time, have been better able to react, manage and recover”. This transparent, responsible, inclusive and sustainable (TRIS) model for development relies on communication by governance that does not seek to hide anything. This prerequisite creates a climate of trust between governments, governments and the people and among the people.
“In the case of pandemics like Covid-19, transparency and providing information in a timely manner -globally, nationally and regionally- reduce uncertainty, suspicion and the spread of fake news. It makes political responses more efficient,” underlines Rym Ayadi.
In a guidance document*, the EMEA president and director of the EMNES (Euro-Mediterranean Network for Economic Studies), suggests putting in place a global early warning system (GEWS) based on a worldwide political approach, coordinated by the WHO for example, with an implementation at national and regional levels.

Strategic, collective vision and decisive common action

To facilitate the rapid allocation of funds in the event of a crisis, a pre-defined global crisis recovery system (GCRS) would be set in motion. This would incorporate, in particular, wide-ranging investment schemes, open to private-sector co-financing, to strengthen health systems. It would also include support mechanisms specifically targeting countries, sectors and the most vulnerable populations.
Lastly, the third pillar would be a global crisis recovery fund (GCRF) that would provide liquidities in the longer term to fuel the economy’s restart. The IMF and World Bank would provide a partial guarantee (between 40 and 60%) to help government issue long-term bonds of up to 50 years, with interest rates of no more than 1%, to finance the recovery plans, on the lines of the EU’s SURE instrument.
“A global systemic crisis needs to be addressed through coordinated political measures and an altruistic approach that reduces uncertainty and deals with the emerging threats. This opens the way to creating resilience within the global system. We need a collective, strategic vision backed up by joint decisive action for humanity to regain its health, security, economic stability and prosperity,” says Rym Ayadi.
* Proposal for a three-pillar resilience framework to face external shocks : The case of Covid-19 pandemic - Rym Ayadi

Thursday, February 11th 2021

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